There is no doubt that Gucci has had monumental success in recent years. Under the direction of Gucci’s CEO Marco Bizzarri and the creative director Alessandro Michele the brand has witnessed enormous growth, particularly in its appeal towards millennials. Since Michele became creative director in 2015, increase by as much as 37% per quarter was witnessed. While this has slowed down recently, Gucci has continued to cement its place within the market. It is estimated that in 2020 the company is set to make over AUD16 billion.
If the brand succeeds in reaching this figure, it will become a contender to become the largest luxury brand in the world. Currently, this title is held by Louis Vuitton, who have consistently maintained their position for several consecutive years. Louis Vuitton has an estimated brand valuation of $47 billion and has a target of 14 per cent continued growth.
In 2019, Chanel claimed second place with growth by 11 per cent and an estimated brand valuation of over $32 billion. In third place, Hermes had a brand valuation of over $26 billion and a growth rate of 9 per cent. Gucci came in at an impressive fourth place within the luxury fashion industry last year and have consistently held the title of the fastest-growing luxury brand.
While it is a highly ambitious task to become the world’s most successful luxury brand, with high growth rates, it is not unreasonable to expect that Gucci can one day exceed its competitors. If they continue to remain focused on their distribution channel and marketing platforms, there is no doubt they can meet this expectation in the coming years.
With celebrity endorsements set for 2020 to include the likes of Jared Leto and Lana Del Rey once more for their Gucci Guilty Love promotion, there is high anticipation for its consumer response. The pair previously collaborated with the brand on their Gucci Forever Guilty ‘Pour Femme’ and ‘Pour Homme’ campaign, along with Courtney Love. In the campaign, a retro-inspired theme was designed, and Del Rey and Leto’s characters were portrayed as whimsical and imaginative reflecting Gucci’s ultimate goal of representing aspiration, desire and ambition to obtain the lifestyle of class and style depicted.
Gucci’s pricing strategy has proven effective by pricing many staple items at entry-level designer price points. In doing this, millennials have access to goods such as some belts, handbags, jewellery and accessories. In an age of Instagram influencers and social media bloggers, consumers are increasingly exposed to materialistic ideals. By creating the available opportunity for consumers to own even one Gucci item, the brand maintains its luxury aspirational standpoint in the minds of consumers, while also benefitting from sales of a new group. The Gucci belt, with its classic and timeless qualities, is a piece that consumers decided to invest in throughout 2019. In Australia, entry-level belt prices start at $490 and can reach up to over $1600. Celebrities such as Chrissy Teigan, Kendall Jenner, Rosie Huntington-Whiteley, Miranda Kerr, the Olsen twins, Jennifer Aniston and Justin Theroux have all been photographed wearing the belt. There is no shortage of celebrity influence on Gucci’s consumers, particularly when it comes to this product.
Gucci’s marketing strategy is heavily dependent on social media and digital presence. With social influencers on platforms such as Instagram, Facebook, Twitter and YouTube, the company has focused on promoting its likeability among millennials through this media channel. Gucci has used these ‘influencers’ as a cost-effective marketing method. In this sense, Gucci has achieved an image of brand style, and desirability in the views of consumers, with limited efforts, used to spread brand awareness.
The brand focuses on maximising its eCommerce potential by providing an easy to navigate website and services such as free express shipping for online orders. With excellent in-store service and customer support, Gucci’s distribution channels have contributed to its overall success. Additionally to its online service and independent physical locations, Gucci can be found in department stores, such as in David Jones in Australia. The firm has also created an app for its customers to browse, and an email subscription service to notify consumers when new products are launched and available. Through multiple distribution channels, consumers can easily access the brand in any form. A holistic approach has lead to overall positive customer experience on all platforms.
Through market analysis, the design process has been able to cater to its biggest consumers in the creative production progression. The brand has increased designs and styles that Asia consumers have favoured. It has also continued to produce classic pieces consumers adore in geographical regions like Western Europe. This is representative of 34% of the company’s sales coming from Asia, followed by 21% of sales coming from Western Europe. North America also has a significant share in contributing to Gucci’s revenue, generating around 20%. The North American market, like Western Europe, mostly favours classic pieces, such as the ‘Soho Crossbody Camera Bag’, or the ‘Marmont Mini Crossbody Bag’.
By positioning itself globally as a luxury brand and creating a sense of excitement and delight within the fashion industry, Gucci has given other luxury fashion companies a run for their money. High media interest and visibility have given the company the push it needed. If Gucci continues to produce products its consumers are interested in and remain focused on its holistic approach in its services and marketing programs, it will continue to succeed. There is no reason why they cannot become the largest and most successful luxury brand in the world. Under the creative genius and business savvy direction of both Marco Bizzarri and Alessandro Michele, competing companies need to keep an eye on them. It will be interesting to see if Gucci can meet or even further exceed the predictions posed for 2020. Consumers will need to keep their eye out for new and exciting product launches and campaigns this year, as Gucci will be one to watch in the fashion industry!