2019 - 2020 -Luming Chen -Portfolio
FA S H I O N M A N A G E M E N T
CASE STUDY ON GUCCI’S REBRANDING TRANSFORMATION This project is a case study of Gucci's successful brand transformation in recent years. The content includes the historical development of Gucci and the economic impact of two latest creative directors (Frida Giannini and Alessandro Michele). It also discusses Gucci’s movement by Alessandro Michele that combines its existing strengths with market trends (such as sustainable development) to develop product and marketing strategies primarily based on changes in target customers. This case study is a comprehensive research and analysis of Gucci's transformation and restatement.
11
2019 - 2020 -Luming Chen -Portfolio
T he House of Gucci, better known simply as Gucci. Gucci pronunciations is an Italian luxur y brand of fashion and leather goods, as a part of the Gucci Group, which is owned by the French holding company kerning. Kering first invested in the luxury business in 1999 when it bought a 42% stake in Gucci Group NV. 2001 was accompanied by more luxury acquisitions: Gucci Group bought Bottega Veneta and Balenciaga, and signed deals with Stella McCartney and Alexander McQueen. Kering increased its capital injection into Gucci Group between 2001 and 2004.
Gucci was founded by Guccio Gucci in Florence in 1921. Guccio Gucci was an Italian businessman and fashion designer, the founder of The Fashion House of Gucci.
FA S H I O N M A N A G E M E N T
Basic introduction to GUCCI
Originally, as a small family-owned leather saddlery shop. He began selling leather bags to horsemen in the 1920s. As a young man, he rapidly built a reputation for quality, hiring the best craftsmen he could find to work in his atelier. In 1938, Gucci expanded his business to Rome. Soon his one-man business turned into a family business, when his sons Aldo, Vasco, Ugo and Rodolfo, former actor, joined the company.In 1951, Gucci opened their store in Milan and two years later, the company expanded overseas with the opening of the Manhattan store. Â
12
2015 Q1-Q4 performance analysis
Comparison of GUCCI performance from 2015 to 2018 (led by Alessandro Michele) :
Portfolio
--
Luming Chen
--
2019 - 2020
Comparison of GUCCI performance from 2012 to 2014 (led by Frida Fiannini)
FA S H I O N M A N A G E M E N T
the economic impact of two latest creative directors on Gucci(2012-2018)
2013: Starting from 2013, the Revenue of 2013 has decreased by 2.1% compared with that of 2012, and the growth of Recurring operating income has slowed down significantly (from +18.9% to +0.5%). 2014: Compared with 2013, Revenue decreased by -1.8% year-on-year and Recurring operating income decreased by 6.7% year-on-year. From 2013 to 2014, this is arguably one of the most significant crises that GUCCI faced.
Gucci began a major transformation process in 2015, aimed at giving the brand new impetus.
Gucci posted €3,898 million in revenue in 2015, up 11.5% year-on-year as reported.
In 2015 Q1, Comparable sales fell 7.9% in the three months to March 31.
Gucci’s recurring operating income for 2015 came in at €1,032 million, down by a contained 2.2%
In 2015 Q2, Comparable sales up 4.6% in the three months.
year on year as reported.
In 2015 Q3, down 0.4 percent on a comparable basis.
In 2016, GUCCI revenue up 12.3% year-on-year as reported. Typically, growth rate in the luxury
Gucci’s organic sales growth reached 4.8% in the fourth quarter, a significant improvement from the 0.4%
sector is in the single digits, so GUCCI’s performance in a Luxury goods industry that loses money
decline in the third quarter and higher than the market expectation of 2-3% .
every year has been frighteningly strong.
Gucci significantly rebounded in the fourth quarter, the performance of Q1 to Q3 is volatile, Q1 - Q3 is the
In 2017 and 2018, the revenue growth rate of GUCCI is faster than before. The year-on-year increase
transition period.（Alessandro Michele became the chief creative director in January 2015 )
of revenue is 41.9%(2016-2017) and 33.4%(2017-2018) respectively, and the year-on-year growth of Recurring operating income is 69.1%(2016-2017) and 54.2%(2017-2018) respectively.
13
Global revenue share of Gucci from 2012 to 2018, by product category:
Portfolio
--
Luming Chen
--
2019 - 2020
Share price of Gucci from 2000 to 2019
FA S H I O N M A N A G E M E N T
This statistic depicts the global revenue of the Kering Group from 2012 to 2018, by brand:
Overall, the change was little. Summary of important Financial information: from the above chart, we can see that Gucci has always been very important to Kering, and its revenue accounts for a large proportion. But Gucci has low revenue from 2012 to 2014, it is possible to say that it has decreased in popularity from 2012 to 2014. After 2015 (after Michele took over), the revenue of Gucci accounted for almost half of the Kering revenue (63% in 2018). Also, Kering‘s revenue has been increasing after 2015, from the data, it can be said that Gucci has driven part of Kering’s revenue growth.
The main product of GUCCI is Leather Goods. From 2012 to 2018, we can see from the figure that the revenue proportion of Leather Goods has been relatively stable and accounted for the majority, remaining at about 58%. This proves that GUCCI can stand firm with its main products in the fierce market competition. The foundation of the enterprise is also solid, when the wind blows, also can ensure a certain amount of income.
From 2006 to January 2015, the share price of Kering was relatively depressed and the whole graphic trend was concave (from 2006 to January 2015, Frida Giannini was the creative director of Gucci). Gucci's business performance, to some extent, influences the share price of Kering. From 2015 to January 2019, Kering's share price went up significantly, thanks in part to Gucci.
In terms of the proportion of GUCCI in Kering revenue, from 2015 to 2018, GUCCI was very popular in the market. 14
Analysis of consumer components
Millennials are much more numerous than boomers (92 million vs. 77 million)
--
2019 - 2020
Gucci has always been important to Kering, both during the Frida period and the Alessandro period. Gucci‘s performance directly influences Kering’s performance. It‘s just that Frida’s Gucci brought Kering a bad influence, while Alessandro‘s Gucci brought Kering to a new level。
Millennials hedonic consumption over utilitarian consumption, they are more willing to invest of fashion and other lifestyle preferences.
Changes in financial statements from Frida to Michele: From 2013 to the second quarter of 2015, Gucci's performance is not very good, including the continuous decline of sales in 2013 and 2014. it is decreased in popularity from 2012 to 2014. Kering's first quarter earnings release in 2015 shows that Gucci's performance is still declining, which should be a transitional period from Frida to Alessandro. Kering released its third quarter financial results in 2015, and we can see the rebound of Gucci's sales. Alessandro's design successfully brought Gucci back to its normal track. In the fourth quarter of 2015, Gucci's sales increased significantly, ending the transition period. From 2015 to 2018, we can see from Kering's financial statements and share price that Gucci has been on an upward trend. It also represents Alessandro's success.
The 40-50 generation is already saturated with purchasing power. Gucci is looking at a younger market and will have good sales. Young people‘s spending power is soaring and they have more “Right of Speech” in fashion consumption. GucciI’s financial statements show that millennials buy half of its products.
From 2015 to 2018, Gucci’s revenue increases from a low base to a significant rise. No one can argue that Gucci has been the steering wheel of the luxury industry for three years.
Portfolio
--
Luming Chen
Consumer components 1: Millennials
FA S H I O N M A N A G E M E N T
Summarize the influences of the two creative directors on Gucci
Reasons of Revenue decline of Gucci in Frida Giannini’s period according to Consumer components: 1. Unclear positioning of itself. Frida Giannini avoids the well-known sexiness of Gucci in its design and chooses a more conservative design, which is unacceptable to the original consumer. 2. In the past, consumer target was a more mature group of people, but now consumers are gradually biased towards generation Z and millennials.
15
Consumers focus on innovation (No matter in design, technology, or marketing), but they put less attention to brand history and customer loyalty is not high.
Consumer components 3: Digital Pay attention to digitalization, shopping can be used online and offline at the same time. consumer habits have changed, with many choosing to gather information online before going to a physical store, especially for luxury goods. Big data is also very important in this era, in order to meet the needs of artificial intelligence, data collection and data quality become important.
2019 - 2020
>Innovation “creativity� is a good starting point to impress customers. Not only should products keep pace with the times and bring forth the new, but marketing methods also need to keep up with the trend of continuous evolution.
At the same time, Gucci is investing in websites and e-commerce channels. In the future, customers in London, Sanyo, Dubai, Los Angeles, Madrid, Miami, Milan, Paris, Sao Paulo and Tokyo will be able to purchase Gucci products through the Farfetch App and website and receive the goods within
FA S H I O N M A N A G E M E N T
Consumer components 2 : Innovation and individuality
90 minutes. This not only expands Gucci's online sales channel, but also uses Farfetch's technology to help Gucci collect more consumer information in offline stores.
allows users to remotely try on Gucci Ace sneakers from their phones. Users can select their favorite Ace sneakers, point the phone camera at their feet, and the "try on" effect is displayed. Users can also share photos of themselves trying on Ace via email or social media.
--
>Personalized modification service Not only good quality, differentiation has become the key to win in the luxury market, consumers do not
Portfolio
Luming Chen
--
For example, Gucci recently updated the IOS mobile client version. The new version supports AR and
want to have the same products with others, but also want to show their own personality through fashion. In response, gucci has launched a customized (DIY) service. Creative director Alessandro Michele, because of his rebellious lifestyle, also wants people to be brave enough to express themselves through clothing. Therefore, gucci personalized ordering service provides a variety of printing, embroidery, lettering, color for people to design and mix. Among them, the design space of the bag's personalized service is very large, with more than 10,000 kinds of totem, ornaments and materials for people to match and design.
16
Nowadays, brands no longer blindly send information to customers unilaterally, and enterprises pay more and more attention to listening to consumers' needs and
Consumer components 5: brand value= consumer core value 1.
It is also very important that brand beliefs conform to consumers beliefs.
2.
For example, today's young consumers are very concerned about social
Profile of two creative directors
and environmental issues, and the views of generation Z and millennials
understanding their preferences.
are crucial, because these groups together represent about $350 billion of
> Cultural exhibitions: GUCCI has hosted a number of global cultural exhibitions, and "No loner/Not yet" exhibition in Shanghai Minsheng modern art museum in 2015.
More and more of them support their beliefs with their shopping habits, preferring brands that are consistent with their values. In response, brands
the following examples are two of the biggest in China.
incorporate social and environmental themes into their products and services. 4.
From 2016 to 2018, the number of times the word “feminist” appeared on home pages and newsletters increased more than fivefold, according to data
--
2019 - 2020
consumption power in the United States alone. 3.
collection of more than 2,000 fashion retailers. Many brands and retailers
Luming Chen
have joined in, including Levi's and Nike. Gucci also backed "March for Our Lives" which was a student-led demonstrations calling for tighter gun control.
1.
Since 2015, Gucci has been led by the tandem of the brand’s Creative Director, Alessandro Michele, and its CEO, Marco Bizzarri.
-Portfolio
FA S H I O N M A N A G E M E N T
Consumer component 4: Interaction between brands and consumers
In 2018, “The Artist is Present” exhibition invited Morizio Cattelan, one of The most influential artists, as its curator.
2.
Alessandro Michele was born on November 25, 1972 in Rome where he grew up with an instinctive appreciation of the visual thanks to his mother’s love of cinema and his father’s interest in sculpture.
3.
After studying costume design at Rome’s Academy of Costume and Fashion he joined the Italian knitwear brand Les Copains. Then, working under Karl Lagerfeld and Silvia Venturini Fendi at Fendi in the late 1990s.
4.
Tom Ford poached him to design bags for Gucci in 2002, where he has been working ever since, becoming associate designer to Frida Giannini in 2011 and Creative Director of Richard Ginori in 2014.
5.
Today, he is responsible for all of Gucci's collections, product categories and the company's global brand image, creating a compelling new story for Gucci.
17
6. Changes in Brand identity
Changes in product management
A. Product range > FRIDA’s period
Focused on bags and clothes, also developed makeup series. but Only in 2014 did former creative director Frida Giannini launch a makeup line with Pat McGrath, but compared to Pat McGrath's now hugely popular personal brand, GUCCI's makeup line is for what can be described as "silence" in the market: most people don't know it exists. In the period of Frida, more attention was paid to tailoring, careful use of colors, minimalist, normcore style, and the style of design was too conservative. The product design was without the Gucci logo, people would not recognize Gucci clothes.
Portfolio
--
Luming Chen
--
2019 - 2020
mainly for business people.
FA S H I O N M A N A G E M E N T
6. Changes in Target customer profile
> Alessandro Michele’s Guccy era
Compared with the past, more attention is paid to the development of all the series. Products range from furniture to accessories to makeup. not limited to bags and clothes. In September 2018, GUCCI BEAUTY, created by the brand's creative director Alessandro Michele, began an Instagram account with 42 portraits of art from different eras and races -even detailing each painting as if it were a museum exhibition.
18
>FRIDA’s period She didn‘t work with artists when she was designing for Gucci, but sometimes
C. Visual style >FRIDA’s period
Clean and simple.
she gets her inspiration from artists. “I did a collection that was very Russian,
teamed up with GUCCI to launch its new Bamboo watch and
she says in BAZZAR.
jewelry series. · The highlight of the collection is the use of sustainable,
--
2019 - 2020
>Alessandro Michele’s Guccy era
renewable materials such as bamboo knobs, palm nuts or plant
He loves joint cooperation with niche artists, such as the series of graffiti and
ivory (an alternative to animal ivory). Gucci watches and jewelry
Unskilled Worker, and a limited collaboration with Japanese artist Yuko Higuchib,
are helping to restore ecology in northwest China’s Ningxia’s Hui autonomous region, one of the most ecologically devastated regions in China, where desertification is on the rise.
>Alessandro Michele’s Guccy era
· A portion of the profit from the watch and bracelet will be
Michele pays attention to the subjective inner world, and carries out the design with passionate, bold,
desertification areas in Ningxia.
Luming Chen
Michele’s Visual style : romanticism and wunderkammer.
--
>FRIDA’s period · During Frida’s period, Bingbing Li’s charity brand, L.O.V.E, has
inspired by the artists in Russia in the '20s and '30s who left and went to Paris,”
Portfolio
D. Product ethics
FA S H I O N M A N A G E M E N T
B. Collaborate with other artists
donated to a public environmental protection project to help
magnificent imagination and exaggerated techniques. In Alessandro Michele's collection, we see a variety of post-modern combinations from different time and space. There are mystical animal motifs, iconic rock 'n' roll costumes, Oriental elements, street style and, most importantly, Italian handicraft heritage. These seemingly "irrelevant" parts were put together in Michele's mind to form a profound aesthetic system.
>Alessandro Michele’s Guccy era · In 2019, kering group launched the most comprehensive "animal welfare guide" to date for the luxury and fashion industry. · Gucci, as a representative, announced in October 2017 that it would give up fur products. The animals affected by the “no fur” policy include mink, hyena, raccoon, fox and rabbit and so on. · Kering's animal welfare guidelines cover all aspects of its supply chain, including how to treat animals commonly used in the fashion and textile industries, a ban on intensive farming, and a ban on antibiotic treatment other than for therapeutic purposes. · In the future, the group will apply the guidelines to 82 farms in more than 60 countries. 19
• Gucci has beaten Luxury brands such as Chanel and Burberry to become the most successful Luxury brand in Luxury marketing in 2017, according to the data released by Luxury Daily, driving
The following marketing strategies are prominent and worthy of discussion in Gucci‘s transformation (online and offline): Online I . Digital Creative Project • Gucci's digital creative projects are very intensive and emphasize individualism and emotion. Gucci held digital creative projects in February, march, may, July, September, October and December 2017 and January, February, march and May 2018 respectively.
--
• One of the most representative and discussed projects was Gucci’s Meme project #TFWGucci launched in March 2017 with the theme of the new watch series, encouraging creators around the
Portfolio
Luming Chen
--
2019 - 2020
parent Kering group to a strong third quarter in 2017 with double-digit revenue growth of 10.5%.
world to create Meme for the new watch series. • Project name #TFWGucci means “when... I wear Gucci watches. The first prize work received more
Jared leto II. Brand Spokesperson
Brand spokesperson is also an important part to express brand concept. · Yuchun Li and Jared Leto are two important spokespersons of Gucci. Gucci attaches great importance to the characteristics of spokespersons. · The characteristics of the spokesperson must be consistent with Gucci, such as diversity, sex appeal and advancing fashion sense , Gucci has the feelings and romantic aesthetics of the Renaissance.
FA S H I O N M A N A G E M E N T
Marketing Strategies of Gucci under Alessandro Michele
Yuchun Li · Yuchun Li’s personal positioning is extremely in line with the style of GUCCY. She is the first female star to dress in genderless style in China and one of the most successful stars to style herself in unisex. · In addition, Yuchun Li is a star who loves public welfare and charity. She is the lifelong spokesperson of the maize love fund. She has also been awarded by the world wide fund for nature (WWF) for three consecutive years, serving as the promotion ambassador. Gucci is also a brand that pays great attention to public welfare and charity, which happens to coincide with Yuchun Li.
· He reflects a Gucci male's characteristics: varied and diverse, or ornate or classical.
III. Gucci's campaign Every time, once Gucci's blockbusters are announced, it creates a new buzz on social media. For example, the "camera-free" spring/summer 2018 campaign, released in 2018, caused a sensation.
than 2 million likes.
20
> Analysis of Gucci’s Pros and Cons (Before and After)
I . Gucci offline cultural exhibition: · GUCCI has done a lot of cultural exhibitions all over the world. The following are one of them, Gucci makes customers
Before: Frida Giannini’s period
· Theme in 2019 “Camp: Notes on Fashion” coincides with the style of Gucci, one of the biggest sponsors. The MET Gala event brought a lot of attention to Gucci. The money spent by brands and designers during the Met Gala is not only a goodwill contribution to the fashion exhibition, but more importantly, the purpose is to improve the status and influence of brands in the market. A post on Gucci's official Instagram about the Met Gala has garnered more than 800,000 thumb up.
2019 - 2020
fascinated by cultural exhibitions. · "The Gucci 4 Rooms" exhibition in Ginza, Tokyo : Alessandro Michele, creative director of Gucci, invited four well-known designers to incorporate Gucci brand elements into four installation Spaces with Different themes, making it look more like an unusual Installation art exhibition.
II . Gucci sponsored the 2019 MET Gala
FA S H I O N M A N A G E M E N T
Offline
Portfolio
--
Luming Chen
--
After: Alessandro Michele’s period
III . Gucci show location · Each time the location of the GUCCI runway is very unique, which can arouse the public's attention and heated discussion · Gucci's spring 2019 ready-to-wear show was held at the Alyscamps cemetery in Arles, France in May 30, 2018. This time Alessandro Michele took us to ancient Roman France, much older than the Renaissance. When Gucci released the venue, Gucci was once again hotly discussed.
6. Project Summary · The success of Gucci's transformation can be seen from Kering's and Gucci's financial statements and various related forms. · The main reasons for Gucci‘s successful transformation are as follows: · the success of brand positioning, target consumer tends to be younger, correctly understands the needs of the main fashion and luxury consumers, and the brand values are the same as that of consumers and so forth. Also, reasonable upgrading and development of new product lines have made certain contributions to enriching the needs and consumption trends of target customer groups. · The successful transformation of Gucci also cannot leave the marketing strategies such as culture exhibition, because Gucci products are now more like a work of art, and more importantly, a large part of Gucci‘s customer base is cultural exhibition lovers, and Gucci’s every exhibition attracts a new wave of attention and 21 discussion, brought a lot of customers flow for Gucci.