12 gennaio 2018
FREUD SCHOOL – FREUD INSTITUTE
ITALIAN LUXURY CLOTHING TRIUMPHING AMONG YOUNG PEOPLE
Gucci's success is due to young people. The Italian luxury brand disproves the common thought that "millennials" have little interest in "luxury brands."
Kering shares have risen nearly 86 percent in the past year, buoyed by strong revenue growth for the group, which owns brands such as Gucci, Saint Laurent, Bottega Veneta, and PUMA.
The stock market boom is linked to double-digit revenue growth in recent quarters, with cumulative sales of 11.2 billion euros in the first nine months of 2017, driven precisely by Gucci, which drew 39 percent (4.4 billion) of the total and whose brand was valued at $12.7 billion last year.Tourism School
The most compelling aspect of this jump in sales lies in the fact that 50 percent of it is owed thanks to the so-called "millennials," or young people aged 35 and under. For Yves Saint Laurent, the percentage rises, even, to 65 percent.
A denial, then, to those who claim that the luxury signature would not attract the younger clientele, disinterested in showing off and lacking the means to be able to target them. And the outlook appears reassuring, if Bain & Co calculated a 6 percent increase in global sales in the luxury sector for last year, which rose to 262 billion.
Gucci is getting the best of the market's positive trend, starting with the image whitening of the past and focusing precisely on young people, thanks in part to a very social marketing tacticl.
Today, the Italian luxury brand's designs are worn by celebrities such as Rihann and Brad Bitt. There are 580 Gucci stores worldwide, and they have been totally reinvented by ceo Marco Bizzari and creative director Alessandro Michele, who can be assessed as the real driving force behind the brand's turnaround and relaunch in recent years.
The store was designed to amalgamate the shopping experience with the digital platform, precisely to meet the predilections of younger customers, who are driven by content, emotions and personal connections. Gucci makes great use of social media and, in particular, Instagram with as many as 20.3 million followers to accompany the photos posted. Thanks to this strategy, it has now become the brand to have increased its market share the most in the past 5 years, from 11.8 percent in 2013 to 14.5 percent in 2017. Not everyone receives the same fate. Take another Italian luxury brand, Prada: it went from 10.9% to 7.1% over the same period. And the trend favorable to Gucci and unfavorable to Prada is expected to continue this year, with UBS estimating a sales increase of 8 percent for the Kering group and 3 percent for its rival. Social does not entirely explain the success of brands like Gucci in the changing world.
Another key ingredient is speed. And here, lies perhaps one of the greatest revolutions in high-end fashion. The Bizzarri-Michele "dream team" has been perceptive in understanding that with the spread of so-called "fast fashion," through brands such as Zara and H&M, the pace has accelerated in the market. It is no longer possible for a fashion house to stop only on the presentation of designs related to the fall/winter and spring/summer collections; new designs are needed throughout the year, so it is necessary to reduce the time from conception to production and subsequent presentation to the market.
Partly for this reason, Gucci is opening a new 35,000-square-meter facility in Italy, the so-called Art Lab, where it will produce shoes and leather goods. The goal: to bring production closer to the target market and speed up the time it takes to sell new models. Consider that the average cycle to date to design, produce and then sell a model is 18 months, biblical times for the world of 2018. To speed things up, technological investments seem increasingly essential, not least in order to minimize inefficiencies.
Gucci is having the merit of dispelling the myth of young people disinterested in luxury, something the data disprove, and not only on the fashion front, but also on the diamond front. On the contrary, it takes speaking their language to catch up with the times, because indeed "millennials" do present one difference from their parents: they are not so loyal to the brand, if they no longer find it of interest, they change. In December, two international fashion brands suffered a stock market thud somewhat for the same reason, although they belong to two different target groups: Salvatore Ferragamo and H&M. Both are allegedly paying for not being very social and for focusing too little on e-commerce, which Gucci, on the other hand, is exploiting a lot.
Proving that, in this day and age, it doesn't matter if you're selling luxury clothing or a few euros; if you can't find the right channels and language, you're taking steps backward. And blazon itself matters less and less.
