Essay on Gucci: Industry Analysis and Creative Process Overview

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Essay on Gucci: Industry Analysis and Creative Process Overview

Gucci

Gucci is an Italian fashion brand has nearly 100 years history in this luxury industry. It is now achieving the vision to become the leading luxury fashion house in the world with more than 13$ billion brand value. Not only succeed in its main corporate activities to bring their value through craftsmanship, this brand also is loved by its philosophy of sustainability. For Gucci, Social Responsibility is an important part of their global strategy and they want to be the leader of luxury brands to promote sustainability. This is the key point in our suggested project for the brand to engage to the innovation of new materials for apparel, one step further to enter the futuric and high technological industry to pursue its mission.

History

Gucci was founded by Guccio Gucci in Florence, Tuscany, in 1921, now it comes from strength to strength to become a leading name in fashion and leather across the world.

Guccio Gucci was the son of a humble Italian leather maker and he desired to achieve a life better than his father. After he had experience about leather and the revolutionized in this luxury fashion industry during the time he was a hotel worker at Savoy hotel (London), he came back Florence to open The house of Gucci in 1921, when he was 40 years old. The store was a success, and with the help of his three sons, Gucci soon expanded the brand by opening up additional stores in Milan and Rome.

By the 1950s, Gucci had established itself as a premier luxury brand. His sons, Aldo and Rodolfo Gucci further firstly expanded the company’s horizons into global in 1953 by establishing offices in New York City, anchored by the luxurious Savoy Plaza Hotel. Two weeks after this event, Guccio Gucci passed away.

The company prospered through the 1970s, but the 1980s were marked by internal family disputes that brought Gucci to the brink of disaster. The company faced issues regarding family arguments, tax evasion, poor management, all which affected the company reputation and profit.

In 1990, Tom Ford was hired by current director and promoted to the position of creative director in 1994. He was the important person of Gucci in that period, not only for his revolution in design of ready-to-wear collections, but also for his contribution in the process of decision-making with De Sole when the Gucci Group acquired Yves Saint Laurent Rive Gauche, Bottega Veneta, Boucheron, Sergio Rossi, and, in part-ownership with Stella McCartney, Alexander McQueen and Balenciaga to build Gucci house, consists of others fabulous fashion brands. By 2001, Ford and De Sole shared the responsibility for major business decisions, while Ford concurrently directed design at Yves Saint Laurent as well as at Gucci.

In 2003, The French conglomerate Pinault-Printemps-Redoute (now Kering group) gained ownership of 60 percent of the Gucci Group’s stock, became the holding group of Gucci house.

December 12, 2014, Marco Bizzarri was appointed CEO of the brand and he appointed Alessandro Michele to be Gucci’s creative director in 2015. Then Michele reintroduced the company’s double-G Marmont logo and helped Gucci marked a significant growth of 12% of revenue in 2016.

Identity

Double GG logo: Today, the Gucci logo has become synonymous of luxury and sophistication and is still immediately recognizable by anyone. Aldo Gucci, one of Guccio’s three sons, joined The House of Gucci in 1933 and he was the one who designed the actual logo. The official logo also has the Gucci name spelled clearly out above the double-G emblem, ensuring the reorganization of the logo and showcasing the importance of the brand’s name. The logo of two interlocking G’s was adopted around 1960s, as a sweet homage to the founder, Guccio Gucci.

And while the “G” logo is no-doubt considered one of the most recognizable “classic” logos in the world, the iconic green and red stripes have also become synonymous with the luxury house. When you see this colorway, you know it is there for one of the world’s most successful brands. The signature can speak for the brand even without the double G logo.

2.Products

At the beginning, Gucci’s stores featured such finely crafted leather accessories as handbags, shoes, and his iconic ornamented loafer as well as silks and knitwear in a signature pattern.

In 1940s when leather was in short supply as a result of the League of Nations’ embargo on Italy’s Fascist dictatorship and due to the war. Gucci used alternatives usually linen and bamboo – then Gucci Bamboo bag was born. In 1947, an artisan created a bag shaped like a saddle with handles made by bamboo. This is one of the most popular and iconic creations of the brand’s history.

Jackie Onassis Kennedy chose a gorgeous little hobo as a staple only to have the silhouette renamed the “Jackie” bag in her honor. The Jackie bag still remains one of the most sought after classic Gucci items. As the 1960s rolled through, monogram mania set in and the signature interlocking GGs were strewn across handbags, luggage and clothing, cementing its place as one of the most identifiable designer logos of all time.

In 1932 Guccio created the first loafer shoe with a gilded snaffle. Every pairs of horsebit loafers is handmade in Florence.

In 2013, Gucci celebrated loafer 60 years old. Like hermes, the first clients of Gucci were the horse riding aristocratic fraternity who come to the designer in search of quality fashionable equestrian gear.

Gucci now iconic flora Print silk scarf was originally made for Grace Kelly. This kind of scraf wasn’t named after the stars. Grace Kelly visited Rome’s via Monte Napoleone store in 1965. And Rodolfo asked artist Victorio Gennairo to create an original silk scarf with a floral pattern as a gift to mark that occasion. After that, there is a recent update by brand artist Christ Knight as a part of crew collection and iterations of the iconic design still be found for sale.

1970s The first Gucci perfume is created. Nowadays, Gucci perfume is licensed for Coty.

1980s Thanks to Tom ford, Gucci ready-to-wear collection was shown for the first time at the Florentine fashion shows with great success.

AT the present, besides accessories, apparel, hard luxury, fragrance and cosmetic, Gucci has entered house decor segmented industry.

3. Finance

As of December 31, 2018, Gucci operated 540 stores globally, including 229 stores in emerging markets. Gucci delivered an excellent performance in 2018. Listed at the 39th position in Business week Magazine’s top 100 global brands, Gucci holds the value of approximately 13 millions $ in 2018.

Gucci’s revenue topped the €8 billion mark in 2018, reaching €8,285 million. This represents a year- on- year jump of 33.4% as reported and 36.9% based on comparable exchange rates. All of the brand’s main markets reported robust growth during the year.

North America has an increase of 43.6%, take over the first position of growth speed from European market. North America was also by far the highest performing region in terms of online sales, which increased over 60%.

In Japan, in-store sales advanced by an impressive 35.7% on a comparable basis, led by the recovery in tourist numbers seen since the second half of 2017, especially for Chinese tourists, as well as domestic market share gains. In emerging markets, revenue increased at 42.7%, with all regions contributing to this excellent performance, including Asia- Pacific, where revenue surged 45.0%. Strong sales momentum with Chinese customers drove very solid growth in Mainland China as well as significant revenue increases in the region’s other markets. In Western Europe, there was an increase in revenue at 28.5% for the region overall.

4. Sustainability

Gucci become the partner of UNICEF in 2005. Gucci stores worldwide donate a percentage of the sales for special collections made specifically for UNICEF to go toward the United Nations Children’s Fund.

Launched in February 2013, the ‘Chime for Change’ campaign works to further the global campaign for girls’ and women’s empowerment. Gucci has funded over 210 projects in 81 countries through this initiative.

In line with Kering’s long- lasting commitment to sustainability, and the introduction of the “Culture of Purpose” ten- year sustainability plan, Gucci launched Gucci Equilibrium, a new portal designed to promote and broadcast the brand’s perspective on environmental and social impact change, and portal connecting people, planet and purpose.

Technology and innovation: Providing a study into luxury fashion consumer preferences, the 2018 Gartner L2 reports reveal fashion marque Gucci as the leader in the world of digital and social media. Thanks to a perfect blending of site functionality, a seamless shopping experience, integrated content and robust search and navigation, the brand was declared the Top Genius brand for the third year in a row. Gucci was the first to invest in top-tier site functionality and build on a strong shopping experience through integrated content, robust search and navigation, and aesthetically pleasing product pages. To drive customer satisfaction, the Italian retailer has built a Facebook-integrated chatbot and it also launched scannable adverts. For its spring 2018 campaign, Gucci developed in-store augmented reality (AR) and virtual reality (VR) installations, which allowed consumers to become a part of the campaign. Since 2017, Gucci remains the most visible brand across e-tailers, scoring higher that multi-brand retail sites such as Farfetch and Net-a-Porter. Comment by Le Trang:

II. Industry analysis Comment by Le Trang:

The wearable technology market is a relatively new one, which has experienced increased growth year on year. Triggered by the immense popularity of smart watches, fashion companies have started to enter into this market due to the endless possibilities and potential for high sales and profits. By the end of 2018, it was estimated that the wearable technology market was valued around $5.8 Billion (Transparency Market Research, 2019). However, it is predicted that the market will experience immense growth every year and experts predict that by the year 2022, smart wearable product sales will increase dramatically becoming a $27 billion dollar market with 233 million unit sales (Forbes, 2018). Overall, these figures demonstrate the attractiveness of the industry to both Gucci and Google due to the vast future growth predicted in the market.

Wearable technology consists of two main definitions, including independent central devices playing a role as connectors for other equipment, and the concept of functions to conduct specific actions of users or to measure required data of the user’ body (Godfrey et al., 2018). As wearable technology advances practical industrial applications, this segmentation is a potential market for fashion companies and designers. The launch of wearable computing devices from global companies like Google Glass eyewear in 2013, Apple Watch in 2015 and Mood Shirt patented by Microsoft in 2016 (Mancoff, 2019) is a strong evidence for the development of this high tech fashion trend in the future.

Therefore, in order to enter the new potential market of high tech fashion, a co-branding project between Gucci and Google could benefit both partners and take advantage of strengths both sides. Gucci and Google can form a complementary partnership and synergies as both companies are ranked as the most valuable brand in the world by Forbes (number 2 for Google and number 36 for Gucci) (Forbes.com, 2019). In addition, Google has experiences in cooperation with fashion brand to create high tech products, especially the cooperation with Levis called Levi’s Commuter Trucker Jacket with a platform named Jacquard by Google allowing users to connect with their smartphone immediately by touch gestures (Jacquard by Google, 2019). The prestige of Gucci could also make an important contribution to the success of the project as Gucci is ranked as the top of the top 15 most popular luxury brands online in 2019 through a research of Luxe Digital Company (Beauloye and Beauloye, 2019). The cooperation between Gucci and Google will mainly focus on the niche segment with regard to smart materials including conductive yarns and textiles from Google which enables Gucci to become the first company offering unique designed and convenient suit jackets for businessmen. This opportunity is also a golden chance for Google to enter to luxury fashion industry through Gucci distribution channels and to reach to the segment of customer with more exclusive and iconic characteristics. This will also give Google Jacquard an opportunity to have insights of customers’ need and behaviours, especially as both companies share the same mission in innovation for future sustainable development.

III. Creative process

1. Product

a. Description

Gucci’s new high-tech men’s suit jacket will take advantage of new integrative clothing technology provided by Google to allow the individual wearing the jacket to connect to their phone. Through the use of gestures, such as tapping your wrist or swiping up the sleeve, you’re able to use applications on your phone including Google Maps, Google Mail and Google Music as well as answering or declining phone calls. Comment by Alex Miles:

Some competitors of Gucci have introduced forms of wearable technology (see below in competitor analysis), however none have introduced a product or range which allows you to connect to and use multiple applications on your phone. Additionally, other companies who aren’t luxury fashion brands have entered in the wearable technology market , however none of them are offering a men’s suit jacket. For this reason, this product is one of a kind and we expect it to take the market by storm due the reputation for Gucci clothing combined with how important mobile phones are to people nowadays and how frequently they are used.

Show the video of Jacquard introduction: Comment by Chu Phương Huỳnh:

https://www.youtube.com/watch?v=qObSFfdfe7I

b. Target customer

The target customer for our new product is businessmen who are highly ranked in organisations and well paid in their profession. The principle reason for this is that Gucci is a luxury brand and their products are exclusive and only available to the people who can afford them. These target consumers will also be very busy due to their important position in the firm and therefore will need to communicate with subordinates frequently and will constantly be on the move. For this reason, these businessmen will benefit from deriving all the benefits of this product including accepting/declining phone calls with ease, using Google translate and receiving reminders from Google Calendar. Furthermore, we expect our target to be between the ages of 20 and 35 as consumers of this age group are members of either Generation Y or Generation Z. These generations, in particular Generation Z, have a better understanding of and more frequently use technology and therefore are more likely to buy the jacket as they can observe the benefits and usefulness of it.

c. Price

Due to the history and luxury of the Gucci Brand, they are known for producing some of the finest and most expensive suit jackets in the entire world. Men’s Suit Jackets produced by and sold on the Gucci website have a price range of between €1,500 to €3,500. As our new product will be very unique, different, exclusive and in very popular demand we have decided to price our new high-tech men’s suit jacket at €4,800. The reason for this is that the scarcity and exclusivity of this product allow us as Gucci to charge more for the jacket and consumers will still buy it. Additionally, as this jacket is very different from anything currently available in the luxury fashion market, consumers will be anxious to get their hands on it and be a part of the up and coming futuristic technological clothing market.

2. Market analysis

a. Market overview

When introducing their new product Gucci will transition from the luxury fashion industry into the wearable technologies market. This is a relatively new and upcoming market, which only a few luxury fashion brands have entered. Louis Vuitton, Hermes, Giorgio Armani and Prada have all entered the market through introducing their own smartwatches, however no luxury fashion brand has entered into smart textiles segment of the market. Therefore, Gucci will be the first luxury fashion brand to enter into this segment of the wearable technologies market.

b. Competition analysis

Despite this, there are other non-luxury fashion brands who have entered into the smart textiles segment of the market. Firstly, Tommy Hilfiger have introduced a new line of smart clothing imbedded with bluetooth chips, which track the movements of the clothing enabling consumers to be rewarded for wearing their clothing. They have included these chips in T-shirts, hoodies, jeans and bum bags for both men and women. Additionally, they also introduced clothing, which links to the game Pokemon Go. Secondly, Polo Ralph Lauren has started selling a “PoloTech smart shirt” for men, which has sensors implanted into it so it can measure and track vital signs, such as stress levels, breathing rates, heart rates and total calories burnt. The information collected by this shirt will be transferred to an app creating a customisable workout plan. Thirdly, Levis have introduced a new “Commuter Trucker Jacket” made from denim, which allows wearers to connect their phone to the jacket and carry out actions, such as changing or pausing music through the use of gestures. Fourthly, Samsung has also entered in the smart textiles segment of the wearable technologies market. Having already introduced a “Body compass workout shirt” which measures biometric data and a golf shirt, which includes UV rating and weather trackers, Samsung have now introduced a “NFC smart suit”. This smart suit allows wearers to unlock their phone, set gadgets to office and drive modes and swap business cards digitally. This product is the most to our new product as it is also a suit, however there are two major differences between the products. Unlike Gucci, samsung don’t have the reputation as a luxury fashion brand and therefore, their product will not have the same target audience as ours. Furthermore, our product will have more features and capabilities in comparison to Samsung’s product. Finally, the Nadi x Yoga pants, Athos compression shorts and Emel and Aris Smart Coat represent two further companies who have entered the smart textiles segment of the wearable technologies market.

c. Positioning

This diagram represents the Wearable technologies market as a whole by exploring 4 different areas. It identifies the major brands who have entered into the different segments of this market. This diagram demonstrates how Gucci will be positioned in the smart textiles segment of the market alongside brands, such as Polo Ralph Lauren, Samsung and Tommy Hilfiger. It also illustrates the minimal competition present within the smart textiles segment of the market.

This diagram presents the Smart Textiles segment of the wearable technologies market by splitting the segment into four different clothing categories. This diagram demonstrates how Gucci will enter the Suit Jackets/Blazers clothing category, one which only Samsung have also entered. Despite, this our new product will be very different to that of Samsung. Samsung’s NFC Smart suit is more focused on the technological aspect rather than the fashion aspect, which is reflected in it’s price of €350. In comparison, our Gucci suit will combine the technological expertise of Google with the distinct fashion of Gucci to create a stylish and luxury high-tech men’s suit jacket. Overall, this demonstrates that even though we will be in the same clothing category as segment as Samsung we will have very different target customers and products.