Contents
Industry Company Brand Communication Strategy Digital Strategy
Industry The global fashion industry is a result of the modern age. It all started with custommade clothing by dressmakers and tailors. In numbers, in 2017, the value of the global fashion industry was around 3,000 billion dollars and represented 2 percent of the world’s GDP, with a retail value of 339.4 billion dollars.
Fashion Brands’ Levels Concerning fashion industry brands, there are several levels. The materials chosen, pricing and the target consumer are clear characteristics that distinguish each level. In this market, there are value brands, such as Primark, selling low quality products at a low price. There is also the high street massmarket, in which consumers expect quality at a fair price tag, although allowing a slightly superior price for special items. Zara and H&M are examples of this strategy, as they strive at offering high turnover collections. Another level of fashion brands is ready-to-wear. Examples of this are Dior and Chanel, that use trendy elements and develop them into their own concept. Lastly, there is Haute Couture, where brands offer luxury fashion that can be handmade from start to finish and is seen as a dream or a vision.
Outlook After a difficult 2017, a continued recovery is estimated for 2018, with sales forecasted to grow by 3.5 to 4.5 percent in 20181. This is primarily due to the performance of emerging markets, especially across the Asian-Pacific region, Europe and Latin America, with growth rates estimated to range between 5 and 7.5 percent. The industry is now characterized by its fast pace, which is disquieting the system in order to make room for the 3,000 new companies entering the market on a daily basis1. One of the highest growing sectors is the traditional fast fashion-sector, which has increased by more than 20 percent over the last three years
Supply Value Chain The supply chain includes five stages: design, sampling, selection, manufacturing, and distribution. This industry is known for its short product life cycles, volatile and irregular demand, enormous product variety, and extensive and rigid supply processes. Nowadays, the fashion industry has a clear opportunity to change its
modus operandi, while creating value for the world economy, by setting social, environmental, and ethical goals on management’s priorities. Bearing in mind the processes acceleration that fashion companies are witnessing, one of the biggest challenges is the improvement and digitalization of the supply chain.
Flexibility - the goal is to make the shopping experience easy and quick, by using an automated supply chain system, managing its own data and optimizing workflow through a cloud system.
Prediction - brands must adapt to the new consumer buying cycle and develop mechanisms that predict consumers behavior and product’s demand before the entire collection is out to the public.
Quality & Transparency - In 2018 fashion brands will strive at having conscious production processes, from the use of raw materials to the final product. Stella McCartney is an amazing example of how a luxury fashion brand can be ethical and socially responsible.
Company Gucci is one of the world’s leading fashion brands in the luxury segment1. It was founded in 1921, in Florence, by Guccio Gucci and remained fully owned by the company until 1989, when Investcorp purchased 50% of the Gucci Group. Finally, in 1993 the involvement of the Gucci family ended with the transfer of all shares to Investcorp. The Gucci Group is now part of Kering, a French company since 1999. Gucci joined the Kering family in 1999, when the group acquired 42% of its equity. Kering is a global luxury group that possesses a portfolio of luxury brands such as Gucci, Saint Laurent, Bottega Veneta, Alexander McQueen, Balenciaga, among others. These brands activities include fashion, leather goods, jewellery and watches
Leadership - In 2015, Marco Bizzarri was appointed as the new CEO of Gucci, who took on the mission of rebranding the fashion house. One of the first decisions he took was to bring a new creative director, Alessandro Michele, who become apart of the dream duo, along with Bizzarri. Both of them together lead the Gucci boat into success once again, through a revamping that had as a goal to appeal to a younger and broader audience, the millenials. In the last couple of years, the Gucci logo has been spotted everywhere, from swimsuits to sneakers and from socialites to famous rappers. This, resulted in a significant increase in sales across the globe. Therefore, in 2017 Gucci, as one of the most influential luxury brands in the world, generated â‚Ź6.2 billion revenue worldwide
Brand Since being founded in 1921, Gucci has presented several timeless and genuinely iconic trademarks. Gucci’s sons further developed the brand and products that soon started to be the choice of many movie stars and socialites, symbolizing luxury, status, and quality. At this period, Gucci was seen as a fashion label. It created the famous Bamboo bag with the unforgettable green and red stripes and the symbol “GG”, recognizable symbols that last until now. Gucci joined the Kering family in 1999, when the group acquired 42% of its equity. Kering is a global luxury group that possesses a portfolio of luxury brands such as Gucci, Saint Laurent, Bottega Veneta, Alexander McQueen,
Balenciaga, among others. These brands activities include fashion, leather goods, jewellery and watches. However, in the 80’s the brand suffered from deep managerial problems. In fact, it was offering too many items, more than 22,000, and some of them were even jeopardizing the brand’s image.1 For this matter, the editor at the time, Dawn Mello, hired Tom Ford to design a readyto-wear line, and to reduce the number of products to around 7,000, refocusing on building and repositioning a stronger brand. Additionally, the headquarters moved back to Florence, so designers could get in touch with the brand’s roots, reinforcing its authenticity.
During the 90’s, with Tom Ford in charge, the brand was associated with controversial ad campaigns, but also with chic and luxurious collections. There have been numerous creative directors, highlighting Alessandro Michele, that brought more colorful and trendy patterns such as romantic florals, embroidery, among others, to the collections. Gucci’s value comes from the link between the pleasure of sporting the brand and having to spend large sums to acquire the products. There are also functional benefits, as the products high quality. Furthermore, Gucci’s consistency throughout the years, keeping their GG logo the same since 1964, reinforces the timeless appeal of the pieces. Corporate Responsibility is one of the core values of Gucci that defines the brand identity, as it tries to integrate social, environmental, ethical, human rights and consumer concerns into its business operations. Other symbols of the brand’s identity are the GG logo and the horse bite loafers, which are instantly recognizable. This strong identity was built on being of high quality, trendy and from Italian craftsmanship. Moreover, the brand has a highly personal relationship with customers since, when they wear Gucci products, they feel influential, progressive and innovative. However, different directors and designers brought different visions to Gucci.
A great example is the Tom Ford’s sensual campaigns that created an association between Gucci and sex appeal and the perception that people who wore Gucci were sexy and confident. Nowadays, contrasting with that identity, Alessandro Michele focus on more trendy and colorful collections.
“THE SOUL OF GUCCI IS IN THE MADE IN ITALY LABEL. FLORENTINE CULTURE, TUSCAN CRAFTSMANSHIP, THEY ARE SO MUCH A PART OF WHAT GUCCI IS ABOUT.”
- Frida Giannini All its products have the label “Made in Italy”, nevertheless, Gucci is one of the most copied brands in the world. It is also one of the biggest selling brands in Italy, considered by Forbes, in 2017, the 47th most valuable brand in the world.
Strategy - Comunication A communication strategy is the form how a company or brand exposes its product or service in order to attract consumers. In a standard brand, communication efforts are directed to the target consumer exclusively and every consumer reached who is not a part of the target audience will be a waste of money. In luxury, a communication strategy has almost the opposite meaning from the one previously referred.
It is a supreme goal for the brand’s communication team not only to reach the target audience, but to engage the non-consumer with the products and services the brand has to offer. The purpose for this is to raise awareness and also to create familiarity with the brand, as, if anyone fails to recognize it, a part of the brand’s value is lost. This is extremely related with the sociological facet of luxury, which intrinsically correlates one’s possession of luxury items with his/her respective position in society.
On one hand, the fact that a brand is easily recognizable motivates the target consumer to flaunt luxury items and experiences, either they are a Chanel Boy Bag or a weekend getaway in the Versace Mansion. On the other hand, people outside of the target audience that witness others glamorous lifestyle feel inspired by them and aspire to one day be in their shoes, the creating the dream. This way, a brand becomes synonymous with a certain status and lifestyle and the more effective its communication strategy to both consumers and non-consumers, the higher people’s engagement and, thus, the higher the value of that brand.
Gucci is one of the best luxury brands when it comes to communication. Its late success can be attributed, in great part, to the new focus on a clear brand identity. In fact, the brand had been facing a decline in sales before Bizzarri took over as CEO and joined forces with the new creative director, Alessandro Michele, to give a much needed makeover to Gucci’s brand. The GG’s logo, along with the iconic Dionysus buckle, were brought back into the spotlight and started to get featured in most current best selling items, from bags to belts and even shoes and socks.
The Gucci flagship stores are also part of how the brand makes an identity statement and after Alessandro Michele joined the team these too have been given a fresh face. The new Gucci store look has been well thought off by Alessandro to be the embodiment of what it represents nowadays, or, in his own words, “It should be a place of beauty”. When it comes to this year’s advertisement campaign, it followed a similar line as the products makeover, a back to basics approach. Instead of the widely used glossy photographs, the new campaign features surrealist paintings, yet another node to its ultra glamorous and maximalist principles. According to VOGUE, “This is hardly earthshattering news, but Gucci does not do things halfway.”, and that is exactly why the Gucci Museo opened doors in 2011. This museum represents the true essence of Gucci and all its history and heritage, giving the visitor details and information never heard before. Furthermore, it is important to mention that the website received a very interesting feature called Stories, a fantastic gateway to Gucci’s world that enables further exploration of the brand’s other communication tools.
This feature is also a part of Gucci’s digital strategy to be discussed in the following part of this report. All in all, Gucci’s communication strategy has been to focus on revamping the core principles of the brand, to appeal to a larger audience, who not only diverges from the businessman, the previous Gucci target audience, but an audience that is also younger and more trend savvy than ever before.
Through this new communication strategy, Gucci has been able to increase the “aspirational gap” but, at the same time, to provide it’s non-customers with rich points of engagement (such as the app, website and Instagram). This gave everyone a
small glimpse of the Gucci world, to make it one of the most recognizable brands in the luxury market, and at the same time increased the brand’s sense of exclusivity, taking it to a higher aspirational level than ever before.
Digital Strategy With a new creator on board, Gucci turned the page into a new and modern vision, with a refreshed reputation. The brand conducted a massive overhaul and started pursuing a new approach, being currently the leader of the 21st century revolution of fashion and luxury. In the first Investors’ Presentation of 20151, the Kering Group announced a “new momentum” for Gucci. The strategy was to split in two key directions:
1. Revitalize Revitalize and Accelerate. The brand would be Revitalized through its (1) Identity and Creativity (Making it more contemporary and modern but always remembering Gucci’s vision); (2) Communications (spreading a consistent brand image); (3) Store Network (Expansion and adaptation of the network).
2. Accelerate The Acceleration would be conducted by (1) Promoting Store Excellence (the client experience is the main driver of the new Gucci era); (2) Organization. This change included a digital revolution within the brand and has proven its value not only through incredible financials, but also by being selected as #1 brand in 2017 in the L2 Fashion Digital IQ Index
From outdated to digital pioneer
1. Marketing and Communications Gucci implemented major changes in its communication channels, moving deeply into the world of social media and customer engagement.
GucciApp This app was initially created as a purchase channel, however, with Alessandro’s new vision, it became a channel of inspiration, and ultimately an important way to enrich the customer’s experience. The app includes an engaging narrative and tools such as the Photo Booth with exclusive filters for the users, Wallpapers for smartphones, #GUCCIHALLUCIATION which engages the customer in an interactive experience with the Spring/Summer 2018 advertising campaign or the stickers on the Gucci boutique windows and even a game made around a Gucci bag.
“GUCCI is an app featuring the details and inspirations behind creative director Alessandro Michele’s
It was also recently
launched the #GUCCIPLACES1, which collections” invites users to explore andsites offline online and offlineonline multiple of inspiration for the brand across the years, allowing users to check-in once they are at the location and receive a badge as a reward for their visit. This clear mirror of the new marketing strategy: a combination of near 100 years of history with up-to-date technology and user approaches.
#GucciGram Alessandro Michele has invited provocative and contemporary artists to feature Gucci elements in some of their art and share it with their own viewer on Instagram. The goal is to bring art to the users’ screen and at the same time include Gucci in the artists’ provocateur and fresh creations, proving that just as art, Gucci elements can stay true to their essence but at the same time fit perfectly into new contexts and eras.
360º Video Ad For its Pre-fall 2017 campaign, Gucci released a 360º video on its Youtube channel and App, engaging customers with a “throwback to the 60’s” environment, again mixing its heritage with groundbreaking technology.
WeChat Social Shopping the brand has tried to expand its online and offline presence in China, both as a market expansion strategy and a means to fight counterfeit products. Through its “miniplatform” on WeChat, Gucci allows its customers to purchase products through this third party, a chinese social network (5th largest by users).
Omnichannels Gucci.com, an interactive, easy
to use website and built with “all but” purchasing purpose. The brand shares its concept, vision and stories with the user, and at the same time showcases its products available for sale App purchase options Partnerships with e-tailers such
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as Farfetch, increasing the brand’s online presence; Gucci Garden1: a multi-level gallery caring a revolutionary retail experience, in a 14th century palace in florence, that is now available to follow on the brand’s app.; #GUCCIPLACES, #GucciGram, …
Client Experience Product Development Gucci’s digital revolution did not happen only for customer directly related operations. On the production side, the brand has also integrated new processes using technology to ensure sustainability and creativity: Gucci’s Art Lab was created as place for experimentation on different materials and more importantly, to boost and ensure creativity and freshness.
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#GUCCIPLACES, #GucciGram, …
Summing up, Gucci’s digital revolution comes from a major brand restructuring. This pioneer strategy has given this fashion house the title of “game changer” in the luxury fashion environment: a perfect balance between valuable heritage and thrilling new digital tools. The brand realized the importance of expanding the customer’s experience to its main object of use, the smartphone, thus creating a user-friendly and innovative App which consistently delivers the strategy’s vision. New and upcoming artists were invited to include Gucci elements in their art and share it with the digital communities, proving the brand’s adaptability to new times; A travel functionality was added to the app, showcasing past inspiration locations and inviting the user to visit them. All in all, Gucci was able to put itself before its customers and remain a luxury brand, but at the same time to share with them and make them feel a part of the Gucci World.
Content & Design Team Inês Garrido
João Silva
Joana Luís
Mariana Ribeiro dos Santos
Wahid Khan