Gucci, Digital Advertising & Strategy Case Study | G & Co. | Retail Consulting Firm Focusing on Fashion, Apparel, Luxury and Consumer Goods (2024)
With modern times come modern ways of doing things. The world of advertising is unlike the billboards and all-encompassing TV ads. Now, advertising is defined by its personalized touch in reaching segmented audiences that can resonate with a brand more than anyone else. And Gucci is no exception to that approach.
Gucci parent company Kering Group—the owner of Bottega Veneta, Yves Saint Laurent, Balenciaga, Brioni, Stella McCartney, and other fashion houses—has seen enviable growth in the last few years, reporting in 2017 its first three quarter revenues up over 26% on a reported basis compared to 2016. But Gucci has been the forefront and the crown jewel of the Kering group. With Gucci’s earnings composing Kering’s 39% of corporate revenues and posting a 44.5% growth in 2017, it’s safe to say the Italian luxury fashion brand is enjoying a period of prosperity.
What’s contributing to that growth?
According to Kering chairman and CEO Francois-Henri Pinault, half of Gucci’s sales come from millennials, a generation consisting of 35-year olds and younger. That has been a challenging demographic to reach for luxury brands. What this shows from Gucci is that the attractiveness of the brand’s couture resonates with younger demographics than for the proverbial older generation.
And while the couture does explain why the brand seems to bode well with a younger consumer, it would be imprudent not to look at Gucci’s advertising strategy. In seeking and attracting the millennial consumer’s attention and dollars, we can accredit Gucci’s success to its well-executed advertising and marketing strategies, which had gone concurrently with a digital rollout. In recent years, Gucci has integrated both a strong digital approach with its in-store dominance for an omnichannel strategy that will be definitive for luxury brands’ success in the coming years.
Gucci’s omnichannel strategy is a signal that it is going all-in for the demographic that’s visibly championed the luxury brand. Because 98% of today’s luxury consumers can be found online, it will be more important than ever before to tie the success of a luxury brand like Gucci to its eCommerce strategy, social media approach, marketing strategy, and mobile functionalities with its offline capabilities. The result of that means one holistic user experience that is both unique and compelling to modern consumers no matter where they choose to interact with a brand. Sure enough, Gucci’s digital strategy has become holistic in reach and followed in a surge of new luxury converts in addition to longtime patrons.
It would be criminal to count only Gucci’s digital strategy as the sole reason for its success in recent years. Of course, while helpful, Gucci’s digital approach is only a fraction of the brand’s prosperous growth in revenue and label recognition. Indeed, at the forefront of Gucci’s advertising and marketing strategy is the team that’s directly responsible for the luxury brand’s success: Marco Bizzarri and Alessandro Michele, the CEO and creative director of Gucci, respectively.
The pair has spearheaded the brand’s various fortifying strengths over the last few years; Bizzarri in business and Michele in the creative center. Since late 2014, when Bizzarri’s helm as the Gucci chief executive began, the question over who would fill the creative director position loomed over him and the brand’s future.
Bizzarri would ultimately go with the 12-year Gucci veteran in Alessandro Michele, who had been with the company since working under Tom Ford and had been an associate designer to the now-former creative director, Frida Giannini. Bizzarri made the decision after determining he needed someone that could deliver on his vision of creating a culture of “respect and joy, fostering creativity,” adding, “intuition and instinct are more important than rationality.” For the luxury space, where emotion and experiences eclipse rationality, there could not have been a better choice to lead the new direction than Alessandro Michele.
The two set their roles and responsibilities, Bizzarri taking care of the business side, and Michele to lead the brand’s creative development. Bizzarri does not discuss sales or budgets with Michele, which gives him the creative freedom to express the brand how he believes is best. As to why Bizzarri had done this, the Gucci CEO stated, “You cannot put limits or constraints on creativity.” From there on, the two began a period of covetable growth, and creativity was now the central focus of the Gucci brand.
The first thing both Bizzarri and Michele agreed on was to take Gucci to a new stage in the brand’s history. No longer would Gucci be beholden to its past success and continue on the same track. One thing was of high importance: innovating the way forward.
The biggest challenge in having been presented with this new opportunity as the new CEO of a luxury brand and a new creative director’s appointment was to stand still, says Bizzarri. But that was not the answer. “We have to empower talents, we cannot always tell people what to do, and there’s no limits to growth if you are exposed to innovation.”
First to happen as part of this new, innovative approach to Gucci’s marketing strategy was the shift of the face of the brand. The iconic celebrities of Gucci’s past, such as Elizabeth Taylor, Grace Kelly, Jackie Kennedy, would now be succeeded by the modern-day style icons that would resonate withthe increasingly younger luxury demographic: Harry Styles, Rihanna, Lady Gaga, Beyoncé, and Salma Hayek.
And though the Bizzarri-Michele team phased out Gucci’s storied successes in search for new ones better framed for today’s generation of luxury consumers, the resurrection of the GG logo preceded its prominent placing on its new handbags and accessories, with it also restoring the Dionysus buckle for part of its new shoes and bag lines. As a result, six out of seven of Gucci’s best-selling and high-margin accessories have been created by Michele.
The GG logo comeback doesn’t stop there. With free rein, Michele asked graffiti artist GucciGhost to collaborate with the brand for its fall collection. It’s difficult to imagine any other luxury brand would give this much creative freedom as part of its way forward, much less allowing its logo to be redressed. “But such is the way with Gucci, and it demonstrates the embrace of the changing times and need to appeal to today’s luxury consumer,” says Manuel Gonzalez, head of the luxury digital agency G & Co. “As an advertising agency, we commend Gucci’s willingness to adapt and allow consumers to enjoy the brand as they do. It’s user-generated content and collaborations with some of the biggest icons of today’s world that can excite younger consumers.”
Of course, the digitally savvy Kering group knows Gucci’s advertising strategy goes further by investing in its digital innovation and infrastructure. As an early adopter of eCommerce, the Italian luxury brand knows far too well that the millennial demographic that has surged their market share is always online—again, with 98% of affluent consumers stating they use the internet on a daily basis. This segment of the market desires an authentic experience in a digital medium and, as a result, expects a sincere relation with brands online, especially with luxury brands; if consumers are spending considerable amounts of money on luxury wares, the experience should be just as luxurious.
It’s precisely that rationale that has seen Gucci invest heavily in its online strategy and infrastructure. Gucci had redesigned their eCommerce site for the first time in 13 years to signal their intention to meet new consumer expectations. New additions to the site included a find in-store option feature, an excellent product information, gift wrapping features, an expanded customer service through phone and e-mail, and a generous shipping and return policy that has since been recently augmented to consider the pandemic-induced disruptions.
Of course, these leaps in Gucci’s digital transformation are helped in part because of their early adoption of the online world. And while the rest of the luxury world has lost valuable time catching up with the shifting trends in a more digitally-centric world, Gucci has been able to rally loyal customers and uphold its lustrous image through its proactive implementation of its digital strategy while retaining the quintessential aura of exclusivity luxury brands have.
At the same time, Gucci has benefited enormously from the hip hop culture that has promoted the luxury brand for years. From Kanye West dubbing the new phrase to turn “What’s good?” to “What’s Gucci?” to the 2017 rap hit Gucci Gang visibly flaunting the brand, it’s clear the Kering subsidiary is an admirable luxury house.
Not surprisingly, this dominance over hip hop culture has also spurred Gucci’s popularity with younger consumers even more than before. In the first half of 2018, Gucci broke record sales, most of which came from consumers under 35. “What this means for Gucci is that its combination of an excellent online experience, admirable consumer affinity, and embrace for innovation has led to the kind of growth that surely translates to success in the years ahead,” says Juan Manuel Gonzalez, founder of UI/UX and luxury marketing agency G & Co.
As big as an emphasis as Gucci has put on their online strategy, there’s certainly no denying the luxury brand is reshaping its image for the new age. As of 2017, Gucci had remodeled over a quarter of its boutiques to integrate the in-store shopping experience with its cutting edge digital platform.
On the more corporate side, Gucci added a 37,000 square foot manufacturing facility in Italy named the Gucci ArtLab to meet the growing demand and produce leather goods in a more sustainable manner—all while staying true to its promise of banning the use of fur in its products. As part of Michele’s long-term creative vision, the Gucci ArtLab serves to house innovative and artisticexpression to nurture the brand’s embrace of bold ideas, much like the ones that have elevated Gucci to where it is today.
It’s impressive, to say the least, the kind of success the Bizzarri-Michele team has demonstrated. Gucci’s hands-off management approach and understanding that the creative side is never to be capped, along with the digital transformation that’s captured the attention of the growing millennial segment in luxury, has led to the sort of admirable expansion of the Gucci brand name that seems to only herald greater growth ahead. We’re excited to see what more there is to come from Gucci’s advertising strategy.
How much does Gucci spend on digital marketing and advertising?
The most recent annual figures for Gucci’s advertising spend is roughly $567 million, an estimated 11% of Gucci’s revenue.
What did Gucci do for a digital transformation?
Gucci’s digital transformation is unique in that it was one of the first brands to embrace eCommerce in the early 2000s. Thanks to Kering’s early conviction that the online medium would ultimately become necessary, and the bold leadership at Gucci, the luxury brand has gone further to encompass features such as a “find in-store” feature, descriptive product information, gift wrapping features, and customer service through phone and email—all components of a strong online strategy that is certain to give Gucci the edge over its competition.
What is Gucci’s digital strategy?
Gucci’s digital strategy recognizes who their target audience is, knowing where they spend their time and meeting them where they are to engage them.
Given that Gucci’s social media exposure includes inviting artists like GucciGhost to recreate their patterns as part of their advertising strategy, we can only assume that the luxury brand’s efforts to reach out to their younger audience are certainly working.
Kering, the parent company to Gucci, has shifted its communication budget to 40% digital, up from 20% just four years ago. This can only mean that Gucci sees greater returns for investing in its digital marketing strategy. As a luxury marketing agency, we commend this approach and are confident it will mean even more growth in Gucci’s long-term vision.
What is Gucci’s customer experience (CX)?
No matter the medium, Gucci has taken an approach of “brand first, channel second” for its customer experience. That philosophy is essentially what has propelled the brand to invest in its omnichannel strategy to more fully engage shoppers either in-person or online. The consistency with which Gucci has tried and excellently carried out is part of the reason why it has stood out for consumers and only accelerated the brand’s digital presence.
Who is Gucci’s target market/customer?
Half of Gucci’s sales are attributed to consumers 35 years old and younger, meaning their target market is the millennial and Generation Z consumers who are typically more online savvy than most other consumers. Gucci’s target customers are those who value self-expression and want a brand that values creativity and innovation.
What is luxury brand digital marketing, how is it different?
Because of the brand positioning, a luxury brand’s digital strategy will have to look different than any other brand’s in terms of how it engages with customers, showcases its products, and communicates its value.
Instead of the push promotion strategy, luxury brands need to pull consumer interest through relevant and engaging content. How a luxury brand chooses to pull that interest is for them to choose.
Have a question about luxury digital marketing? Shoot us an email at hello@g-co.agency.
Why is UI/UX important for luxury brand eCommerce stores?
A good user interface (UI) and user experience (UX) is essential for any eCommerce store in that it helps browsers easily navigate a website for the sole purpose of making their customer journey easier to finish. Most importantly, an eCommerce store is a window into a brand’s image; the first impression a browser makes when coming across a shop can easily determine whether or not they will continue browsing and ultimately purchase something.
Why is eCommerce important for any luxury business?
In the rapidly changing world we live in, it’s important now more than ever for brands to adapt to evolving consumer needs. And that includes meeting them where they are. As an advertising agency and eCommerce shop, we know the value in a consumer-centric strategy to help luxury brands excel for the future.
How is eCommerce different for luxury and non luxury brands?
It’s not enough for luxury brands to have a branded site just to check the box off on eCommerce. Consumers today want an experience that matches the quality of a luxury product they purchase. That’s why luxury brands place a great emphasis on tailoring their approach to play on consumer sentiment and meet the mark of exclusivity.
According to the Business of Fashion, Gucci's strategy is about finding the right balance between fashion-oriented products and classic, staple pieces. The Italian company stays true to its brand heritage — producing timeless, always-in-style articles — while adapting key pieces to keep up with the latest trends.
Augmented reality is a technology that allows you to see things that you can't see. Shoppers can purchase a pair of digital sneakers called the Gucci Virtual 25. through the Gucci Sneaker Garage on the Gucci app and wear them using augmented reality in the Gucci app and partner apps like Roblox and VRChat.(Zhang 2021)
Gucci's USP, so to speak, is their unique craftsmanship. Going by the records, the top three Gucci items explored by shoppers online are flip-flops, shoes, and belts. With a brand value of $ 12.7 billion, Gucci is one of the richest brands in the fashion world.
Those who are rich or (upper) middle class enjoy the lifestyle represented by Gucci. Gucci is suitable for those who want to be considered fashionable and luxurious.
The main competitive advantages of Gucci are top quality and exclusive products, global brand recognition and customer loyalty. Gucci has an advantage of distinction, where the ability of consumers to pay is greater, resulting in higher prices compared to other brands.
Gucci's digital marketing platform and approach is one of the finest in the business, and the brand is overturning the present luxury industry by actively researching new business opportunities and launching unique digital products.
Today, Gucci is now using artificial intelligence (AI), data and analytics to stay ahead of the competition. Gucci is using AI to help it understand consumer trends and preferences, as well as identify new product opportunities.
Surrounding ourselves with people who have different ideas and ways of expressing themselves is at the core of Gucci's ethos, fostering a positive, open and fair workplace. We believe this is the best way to address some of the most important issues in our society today.
Inclusion at Gucci means creating and ensuring a sense of belonging where each individual is valued and treated equitably, allowing everyone to contribute, thrive and develop as who they are.
Strategic objectives are statements that indicate what is critical or important in your organizational strategy. In other words, they're goals you're trying to achieve in a certain period of time—typically 3-5 years. Your objectives link out to your measures and initiatives.
Weaknesses. Dependency on the luxury market: Gucci's business model relies heavily on the luxury market, making it susceptible to economic fluctuations and changing consumer preferences. Economic downturns or reduced consumer spending on luxury goods can negatively impact Gucci's sales and profitability.
Gucci's competitors and similar companies include Prada, CHANEL, Christian Dior and Armani. Gucci is a luxury fashion brand, manufacturing and distributing leather goods, shoes, ready-to-wear, silks, timepieces and fine jewelry. Italian luxury fashion house since 1913.
Gucci's success can be attributed to its focus on creating a strong brand identity, creating a unique customer experience, and investing in digital marketing. Through these strategies, Gucci has been able to create a strong, positive image that resonates with customers around the world.
For Resort 2016, Michele introduced what would become a signature slogan for the house, L'aveugle par amour, seen here on a delicate, semi-sheer dress. The phrase translates from French to mean “blind for love.” Slogan tees—and sloganeering—is nothing too new.
Gucci has always led the way in putting the customer first. Never shy of exploring innovative and non-traditional approaches to reach new demographics, they understand the value of investing in their customer.
Although Gucci's high-end image is built on the two pillars that are typical for most luxury brands, that is, craftsmanship and heritage, what distinguishes the brand from its competitors is its sensual character and the fact that it's based on the Lover brand archetype.
Founded in Florence in 1921, the House is renowned for eclectic and contemporary creations that represent the pinnacle of Italian craftsmanship and are unsurpassed in quality, attention to detail and imaginative design. Today, Gucci is striving to redefine Luxury for the 21st century.
Gucci, through its social impact initiative Gucci Changemakers, is pleased to announce a collaboration with Detroit designer Tommey Walker and his homegrown label DETROIT VS.EVERYBODY on a special line-up of T-shirts with a donation benefiting non- profit organizations.
House of Gucci is also available to purchase on digital for $20 on Vudu and Amazon Prime Video. You can watch the movie on any device with the Amazon Prime Video or Vudu apps, including smart TVs, tablets and smartphones.
As of 2021, Gucci was the fourth most valuable luxury brand worldwide, behind Louis Vuitton, Chanel, and Hermès. In that year, the brand had a value of about 33.8 billion U.S. dollars. It is the largest brand owned by its parent company, the Kering Group.
Gucci is the hottest brand online, again. Its share of search interest continues to decline, however (from 17.5% in 2020 to 15.2% in 2021 and now 14.8% in 2022). ... 1. Gucci.
Here's why Gucci is so expensive: It's committed to sourcing and using only the finest materials, which make its products extremely durable. Every product is handcrafted in Italy or Switzerland, where factory workers make a fair, livable wage, with meticulous attention to detail.
The Hacker Project was created by Balenciaga's creative director Demna Gvasalia and Gucci's Alessandro Michele to pose questions about luxury, authenticity and inspiration. It is at once super-simple and hard to explain.
According to reporting by Rebag, before starting his namesake label, Gucci worked as a porter at the Savoy Hotel in London. Inspired by ritzy hotel guests, he returned home to work for a luggage company, Franzi, and took up leather craftsmanship before launching his own business.
The overall image of the Gucci brand is luxury and high-end fashion. The brand is often associated with quality, sophistication, and prestige. Some attributes that come to mind when considering purchasing from this brand include stylish design, attention to detail, premium materials, and innovative products.
The ten luxury brand values as defined by Danziger are superior performance, craftsmanship, exclusivity, innovation, sense of place & time, sophistication & design aesthetic, creative expression, relevance, heritage, and responsibility.
Gucci employees are invested in their company's goals. They've stated they're also motivated by Gucci's mission, vision, and values. Most employees at Gucci feel most loyal to their boss or manager or direct reports. Lastly, Gucci's employees are proud to work at their company.
It has a policy approved by CanopyStyle to prevent deforestation of ancient and endangered forests in its supply chain, and it reduces chromium and other hazardous chemicals from its leather tanning processes.
Gucci's competitive advantage lies in its unusual high quality, unique products, worldwide brand awareness and customer loyalty. For this reason, Gucci has a differentiation advantage, where customers' willingness to pay is higher, paired with higher costs, compared to a reference offer.
Strategy is comprised of three parts: Vision, Goals, and Initiatives: Vision describes who the customers are, what customers need, and how you plan to deliver a unique offering.
What are Gucci's Major Threats? Perhaps one of the greatest challenges that Gucci has to face and in the form of counterfeit products. With advancements in technology, it has become infinitely easier to imitate products and sell them at a cheaper rate which harms the origins brand.
Gucci is owned by the French holding company Kering, which purchased an $8.8 billion stake in the iconic Italian fashion brand in 2004. Artémis, the investment firm of the Pinault family led by François Pinault, is Kering's leading shareholder and holds a majority share in the company through its parent organization.
Gucci does not stand for anything in particular, as it is simply the name of the Italian luxury fashion brand founded by Guccio Gucci in 1921. The brand has become synonymous with high-fashion, luxury, and quality, and is known for its distinctive designs, iconic branding, and strong presence in the fashion industry.
The Gucci logo is immediately recognized as two letters put together, which makes it a good design. It's a design that has an aesthetic appeal beyond the significance of the two capital Gs. The meaning of the word “Gucci” represents, Excellence, Greatness, Fashionable, and Fine.
The 18-34 age bracket is Gucci's biggest audience on the site. Meanwhile, Gucci has also collaborated with brands that popular with young people, like the North Face.
A retail strategy is the process you use to develop your products or services and sell them to customers. There are multiple elements to this plan, including location, store, merchandise/assortment, visual merchandising, staff, service, mass media and communications, and price.
For Gucci, its digital strategy reflects a brand first, channel second mentality that results in a visually engaging, fully functioning e-commerce store with full product offerings on sale, and a social media strategy that does what it needs to do without overreaching.
Gucci has adopted psychological pricing for its products. High prices are often equated with the best quality and lower prices with substandard goods. The company has used psychological pricing for Gucci's customers who are looking for premium products and premium prices.
Once you've developed your marketing strategy, there is a "Seven P Formula" you should use to continually evaluate and reevaluate your business activities. These seven are: product, price, promotion, place, packaging, positioning and people.
There are 5 components in a retail strategy: scope, goals and objectives, resource deployment, a sustainable competitive advantage, and synergy. These 5 components help bring new customers to a business or help increase how much each customer already purchases.
Surrounding ourselves with people who have different ideas and ways of expressing themselves is at the core of Gucci's ethos, fostering a positive, open and fair workplace. We believe this is the best way to address some of the most important issues in our society today.
The brand claims its “culture of creativity and innovation” (“Letter to Shareholders” 2) to be one of their fundamental characteristics. Other aspects of the brand listed in the self-description are that it is “eclectic, contemporary, [and] romantic” (“About Gucci” par.
Gucci's competitors and similar companies include Prada, CHANEL, Christian Dior and Armani. Gucci is a luxury fashion brand, manufacturing and distributing leather goods, shoes, ready-to-wear, silks, timepieces and fine jewelry. Italian luxury fashion house since 1913.
What is the pricing strategy used by a luxury brand? Luxury labels' pricing strategy is value-based, backed by the superiority of their products and the willingness of their customers to pay. They emphasise quality and durability above all else.
Gucci has a very strong brand identity and they communicate a perception of high-quality craftsmanship along with innovative and bold design. The brand's personality is reflected in their customers who are eclectic, contemporary and romantic.
Price skimming is an incredible pricing strategy available to those offering high-demand products. Luxury brands, like Gucci and Louis Vuitton, command high prices for its highly sought clothing and accessories. These brands are at an advantage in having more leverage in setting high prices that rarely come down.
Introduction: My name is Kareem Mueller DO, I am a vivacious, super, thoughtful, excited, handsome, beautiful, combative person who loves writing and wants to share my knowledge and understanding with you.
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