Gucci

Gucci is a well-known Italian brand created in 1921, owned by the Kering group (YSL,
Bottega Veneta…). Gucci is a brand with a volatile history of spectacular ups and downs and
whose fortune has almost solely depended on the executives in charge of it. It has lived several
failures throughout the years and suffered from the general slowdown of sales in the industry
until 2015 when measures have been taken where the brand was famous for its bold, sexually
provocative and controversial style.

When Marco Bizarre was appointed CEO and Alessandro Michele Creative Director,
the brand was repositioned, a new consistent aesthetic was introduced, the supply chain
improved and the company’s culture turned around. The image of the brand was changed
almost overnight from sleek, glossy and sexual to raw, quirky, progressive, romantic and geeky.
What hasn’t changed in Gucci’s brand strategy is its “Italian-ness”, commitment to
craftsmanship and an extravagant style.

The new Gucci executives focus on making the brand more attractive to a younger
generation. To stay relevant to Millennials, Gucci started highlighting its progressive and
contemporary character, refreshed its logo and made it more prominent on its products, moved
to an Instagram-focused style of communication and started communicating its positive stance
on sexual fluidity. Since 2015, Gucci has experienced its most prosperous period so far, both
in terms of financial performance and brand relevance among fashion influencers.

Gucci has seen its sales slowing down during a few years before the change of strategy
and creative director, however, Gucci wasn’t the only one to struggle in the industry, this is
because some other factors have compounded it.

Nowadays, individuals aren’t as loyal as they could have been to luxury brands. They
are versatile. If they want to buy from small labels, thanks to the internet, they will do it instead
of buying Gucci goods. In addition, the customers had some difficulties to identify the position
of the brand and its universe because of different choices of strategy. Regarding the Keller's
brand equity model we could tell that some parts of the strategy weren’t in accordance with
their existing customer base and brand image that they wanted to reflect. The salience was still
the same, a high-end Italian brand with one of the most recognisable fashion logo, high-quality
craftsmanship and authenticity. When the customer thinks about Gucci, they linked with the
“made in Italy” synonym of art, design and fashion. For the performance, yes, Gucci was and
still is high-quality craftsmanship with a unique design. They offered a top end price range.
However, at one point, Di Marco, CEO at this time, decided to widen its range of prices for
expanding its audience. The brand has lost its high-end image and aura of exclusivity even with
the attempt to regain its loyal high-end consumer base by raising the average price of Gucci
bags. The Veblen effect, which happens when goods are coveted because of the fact that they
are over-priced, has been diminished by it. If we look at the imagery, the brand identity of
Gucci mixed heritage and prestige with a touch of modernity. However, the brand was still
nostalgic of its success by using ancient icons such as Grace Kelly and patterns created for her
in 1966. In addition, the Creative Director, for more than a decade, Frida Giannini, has created
each collection with eclectic styles, moving from an influence to another without a common
thread.
Besides that, Customers were confused about what the style of Gucci was. With the
problem of price, they judged that Gucci wasn’t as prestigious and innovative as other brands.
The consumer feeling was mild. They weren’t as excited about buying Gucci goods and the
social approval wasn’t as high as before. In consequence the brand resonance, the
psychological bond that the consumer has with Gucci was not as great as it is now. Customers
were confused about the artistic path of the brand and its position concerning prices. They were
more inclined to choose another brand or buying less. The sense of belonging to the Gucci
community was not as strong as it is today.

After negative reviews on the collections of the last and stagnation of the sales, Di
Marco and Giannini had to step down in 2014. The newborn duo composed of Marco Bizzarri,
CEO, and Alessandro Michele, the creative director had drastically change the image and
strategy of the brand during the past 3 years. The goal was to keep the prestige of the brand but
with a contemporary, romantic, edgy vibe.
They had completely embedded the fact that for increasing sales now and in the future,
speaking to millennials is a must while preserving their loyal customer base. These digital
natives thrive new experiences, authenticity and are unstable concerning their loyalty. To
seduce them, Gucci increased considerably their presence on social media and tried to make
the purchase mobile friendly. That’s how they have been able to create a strong community
that promotes indirectly the brand (resonance). They used multiple celebrities (Beyoncé,
Rihanna, Gucci Ghost, Dakota Johnson, Jared Leto…) and influencers to promote massively
the renewal of the brand and its iconic logo (brand imagery and salience) These actors help in
the quest of acquiring new customers and expanding brand awareness freely or in exchange of
money.

One ingenious point of Gucci’s strategy has been to develop considerably their e-shop,
fastening their delivery and creating “affordable” products adorned with the newly launched
logo. They, also, have gone beyond the standards by asking the shopping needs of their
customers in order to provide personalized recommendations. This new strategy
of digitalization and this daring and fresh new style seems to be relevant for Gucci. Their sales
keep to increase since 2015 and it is considered as one of the most influent luxury brands.
Moreover, in 2017, according to Kering’s chairman, M Pinault, 50% of Gucci’s sales were
coming from millennials.