Gucci: Staying Relevant in Luxury Over a Century

Charline S.

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Gucci: Staying Relevant in Luxury Over a Century

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Themes

Gucci, luxury sector, LVMH Moët Hennessy Louis Vuitton, marketing, luxury purchases, luxury goods, Marco Bizzarri, Alessandro Michele, luxury brand, fashion, luxury, merchandizing, high-end cosmetics, high-end products, product line, Italian company

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Abstract

Gucci is an Italian company specialized in fashion and luxury. It belongs to the personal luxury goods industry, which is the second-highest revenue-generating category (51.4% growth segment). Founded by Guccio Gucci in 1921, the brand is now led by Marco Bizzarri, its CEO, but greatly assisted by Alessandro Michele, its creative director. Indeed, the duo managed to boost Gucci's sales, in 2019 the luxury brand reached 10.7 billion dollars in revenues.
The dynamic Asian market, which accounts for 35 percent of sales, is the largest continental market, and most importantly, accounts for 70 percent of growth, explains this rise. In this area, we've also seen the rise of e-commerce. Despite the fact that physical retailers account for 88 percent of sales, the digital share is increasing. In addition to sales, a survey found that 75% of luxury purchases are completed after consumers inquire about the product online.

Why are consumers willing to pay a significant premium to own luxury products? What are the key drivers of luxury consumption?
How do the target segment and brand image of Gucci differ from its key competitors? Evaluate Gucci's brand repositioning strategy over the years.

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[...] In the motivations of luxury customers, there is a significant communal dimension; showing off and sticking out, creating one's image, and societal regard are frequent reasons for choosing. As a result, quality and, by extension, durability, exclusivity, social, emotional, and hedonic needs are the primary determinants of choice. How do the target segment and brand image of Gucci differ from its key competitors? Evaluate Gucci's brand repositioning strategy over the years. Gucci repositioned itself by focusing on states of mind, tastes, and personalities rather than on age groups. Internally, there was a significant shift in how they regarded and defined the borders of the luxury sector. [...]

[...] As a result, the Italian luxury brand provides a greater range of ready-to-wear items to its clients, allowing them to better navigate fashion trends between classics (70 percent) and seasonal or contemporary things (30 percent). They also promote openness by adjusting their message by featuring models who do not necessarily have a typical physique and in situations that are sometimes odd, even mysterious. With these strategic decisions, the company seeks to move away from market clichés and classicism. It seeks to set itself apart by establishing a modern, avant-garde, and iconoclastic image in order to attract and excite new audiences. [...]

[...] This is when public relations come in handy. Following in the footsteps of LVMH, which aided in the fight against COVID-19 by donating its hydroalcoholic gel manufacturing capacity to the French government with no intention of advertising. Gucci should make better use of their public relations capabilities to promote brand goodwill in terms of social effect. This remarkable initiative by LVMH has generated a lot of discussion and raised public sympathy for the firm and its brands by highlighting the company's social responsibilities. [...]

[...] Gucci: Staying Relevant in Luxury Over a Century Gucci is an Italian company specialized in fashion and luxury. It belongs to the personal luxury goods industry, which is the second-highest revenue-generating category (51.4% growth segment). Founded by Guccio Gucci in 1921, the brand is now led by Marco Bizzarri, its CEO but greatly assisted by Alessandro Michele, its creative director. Indeed, the duo managed to boost Gucci's sales, in 2019 the luxury brand reached 10.7 billion dollars in revenues. The dynamic Asian market, which accounts for 35 percent of sales, is the largest continental market, and most importantly, accounts for 70 percent of growth, explains this rise. [...]

[...] Gucci has made a name for itself in this industry by being avant-garde, and it must maintain its position. Their revitalized consumer base and future are based on these digital mediums. The Chinese market, which reopened earlier than the others, exemplifies this sense of fresh delight. Consumers are likely to turn to valuable things since sales have increased there, with shopping frenzy having returned after months of deprivation and hence savings. The usage of influencers appears to be a good way to reach generations Y and the two future generations that will lead the fashion world. [...]

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