For the exclusive use of J. Muschel, 2024.

SMU954

GUCCI: STAYING RELEVANT IN LUXURY OVER A CENTURY

The world is changing. The way in which we approach luxury today is so different from the past
that we need to be open to this revolution that is happening.
- Marco Bizzarri, CEO and President, Gucci1

Gucci, a leading luxury brand world-wide, ended the year 2019 in a strong position with €9.6 billion
(US$10.7 billion)2 in revenues and €3.9 billion (US$4.4 billion) in profits. This was a remarkable
turnaround from 2015, when it had struggled through a few years of stagnation. At the helm of this
transformation were Marco Bizzarri, its President and CEO, and Alessandro Michele, its creative
director, who attempted to redefine luxury and contemporise the brand to connect with young and
diverse new-age luxury consumers. The duo spearheaded a cultural evolution at Gucci and the luxury
industry at large by adopting purpose-driven and digital-oriented strategies, besides rolling out avant-
garde, edgy and eclectic collections. By end-2019, Gucci reinstated its position as the world's fastest
growing luxury brand, having tripled its sales and quadrupled its profits over 2015 figures.3

However, 2019 saw a smaller increase in Gucci’s revenue at 13.3% year-on year, as compared to
2018 and 2017 when its sales had rocketed by 33.4% and 44.6% respectively. Did the slowdown
indicate that it was time for Gucci to reinvent the brand yet again to stay relevant? Moreover, Gucci’s
recent entry into beauty products was a bold but a risky step as the category’s pricing structure
differed significantly from its other product lines. Would the line extension help Gucci capture the
attention of younger consumers by offering them access to the coveted luxury brand, or would it end
up diluting the brand’s equity?

These concerns, however, paled in comparison to what the fashion house faced in 2020 with the
outbreak of the Covid-19 pandemic. In the past few years, an upbeat consumer confidence in most
regions barring North America and the growing number of international tourists worldwide had
driven growth in the personal luxury goods market. But, with the spread of the pandemic, retail and
tourism had collapsed and the luxury market was set to contract by 20-35% by the end of 2020.4
Gucci’s performance nose-dived. In the first half of 2020, the fashion house recorded its steepest fall
with sales down by 33.8% and its operating income cut by over 50%.

Globally, unemployment stood at 5.42% and GDP was estimated to contract by 3.8% by the end of
the year.5,6 During the second half, most nations still had substantial parts of their economies under
lockdown and some countries had begun seeing a resurgence in Covid-19 cases reported. There was
considerable uncertainty regarding when the global pandemic would subside and the associated
lockdowns be lifted.

This case was written by Professor Nirmalya Kumar and Dr Sheetal Mittal at the Singapore Management University. The case
was prepared solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective
handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect
confidentiality. This case was developed with the support of the Retail Centre of Excellence (RCoE).

Copyright © 2021, Singapore Management University Version: 2021-05-08

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

China, where the pandemic had originated, had gradually reopened its economy in some cities from
March 2020. There was an increase in the footfall at Gucci stores and Chinese consumers were
displaying a renewed ‘propensity to shop’. 7 More than a dozen Western luxury brands reported
double-digit revenue growth in China during the second quarter, just as sales collapsed in other parts
of the world. On reopening, would other key markets also recover as quickly as China or would the
crisis induce a lasting impact on consumer buying behaviour, with people shying away from spending
on luxury and opting to save instead? Moreover, the increasing dependence on China for Gucci and
the luxury industry surfaced its own set of risks.

The Personal Luxury Industry

During 2014-2019, the global luxury market grew 1.5 times, from €850 billion (US$952 billion) in
2014 to €1.3 trillion (US$1.5 trillion) in 2019. Within the industry, the personal luxury goods
segment was the second most valuable segment (after luxury cars) and increased from €186 billion
(US$208 billion) in 2011 to €281 billion (US$315 billion) in 2019 (refer to Exhibit 1 for details on
annual growth rate over 2011-2019).8

Personal luxury comprised three broad classifications: soft luxury (apparels, footwear and leather
goods); hard luxury (watches and jewellery); and fragrances and beauty products (refer to Exhibit 2
for details on category sales and growth rates). Regionally, Asia was the fastest growing region
accounting for 35% of global sales, followed by Europe at 31% and Americas at 30%. Since 2012,
China had contributed 70% of the expansion in the industry. In 2019, it grew by 26% to reach
€30 billion (US$33.6 billion) in market size, accounting for 90% of the industry’s growth globally.9
In addition, Chinese tourists propelled the growth of the industry in other destinations too and at
airport outlets. Despite low growth, the US was still the largest market at €75 billion (US$84 billion;
refer to Exhibit 3 for details on top eight luxury markets). 10

In 2019, 61% of the global luxury goods market was sold through wholesale channels, which
included department stores, independent high-end multi-brand stores and franchise stores. The retail
channels–directly operated store networks by the luxury brands accounted for the remaining 39%.
Over 2017-2019, the focus on direct selling had helped the retail sales grow steadily by 4-7%. In
general, brands had taken greater control and their own retail channels’ share was increasing at the
cost of wholesale.

In another classification of channels, the brick-and-mortar stores dominated with an 88% market
share. Luxury buyers preferred to shop at mono-brand stores (31% market share), followed by
speciality stores (20%) and department stores (18%). The off-price stores and airport outlets, which
had the lowest market shares (13% and 6% respectively), were the second fastest growing channels
(after online) at 11% in 2018, and 7% in 2019.11,12 But, physical stores were fast losing ground to e-
commerce with online buying accounting for 12% of the market.13 Beyond sales, online informed
75% of global luxury transactions, with accessories followed by apparel as its top selling categories.

Competitive Landscape

The global personal luxury goods market was a fragmented market comprising fashion houses that
were either part of large conglomerates or independent entities. Gucci saw Chanel as well as Louis
Vuitton and Christian Dior (from the stable of Louis Vuitton Moet Hennessey, LVMH) as its main
competitors.

2/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

Founded in 1909 as an accessory brand (especially hats), Chanel recorded €10.8 billion (US$12
billion) in sales and €3.1 billion (US$3.5 billion) in operating profit in 2019, and offered the most
premium priced product portfolio comprising haute couture, fashion, leather goods, jewellery,
watches, eyewear, fragrances and beauty products (refer to Exhibit 4 for the images of its products
and Exhibit 5 for its collections).14,15 The fashion brand, considered the epitome of French heritage,
elegance, liberated femininity and simplicity, appealed strongly to sophisticated socialites and
business women. Its leather goods and ready to wear categories were not only the most premium
priced, but also fetched the highest resell value in the second-hand market.

In 2019, LVMH (the conglomerate that owned 75 fashion houses) reported €53.7 billion (US$60
billion) in total revenues and €11.5 billion (US$12.9 billion) as operating profits, with Louis Vuitton
and Dior as its two leading luxury brands.16 Louis Vuitton (the second most premium French brand
after Chanel), founded in 1854 as a luggage brand, had expanded its product range to include ready-
to-wear, accessories, shoes, watches and jewellery besides leather goods, and sold exclusively
through its boutiques (refer to Exhibit 5 for its collections and Exhibit 6 for the images of its
products). Its travel-inspired and innovation-led designs were edgy, futuristic and street-style, and
targeted young luxury buyers.

Christian Dior, established in 1946, was particularly renowned for its women-oriented, opulent and
classically tailored designs, and hailed as the pioneer of the ‘new look movement’ that replaced the
wartime fashion of harsh utility and masculine-style designs with radically feminine, curvy shapes
and lines. Favoured by young society ladies, feminists and modern business women in 2019, the
luxury brand turned in solid growth in all its markets from all its product categories, including ready
to wear, leather goods, shoes, accessories and watches and jewellery (refer to Exhibit 5 for its
collections and Exhibit 7 for the images of its products). More premium than Gucci, Dior had a
record-breaking success of its exhibition in London that drew nearly 600,000 visitors.17

The Emergence of Youthful Luxury Consumers

Over the past decade there had been a steady shift in the core consumer profile of luxury brands.
By 2019, the younger generations – Gen Y (born between 1981 and 1996, also known as millennials)
and Gen Z (born between 1997 and 2012) contributed 100% of the industry’s growth. Gen Y
accounted for 35% of the luxury consumption, while Gen Z at 4% were expected to drive the
industry’s future. Together, by 2025, they were predicted to reach 55% market share and contribute
130% of the market growth. 18 These younger generations were markedly different from the
traditional customers of luxury in their behaviour, lifestyle and shopping habits. They demanded a
significant change in the way luxury brands operated and the values they espoused.

Values Sensitivity

The traditional hallmarks of a luxury product - high quality craftsmanship and exclusivity - were
losing importance to the higher purpose, authenticity and passion of the brand. According to the 2019
Luxury Goods Worldwide Market Study,

Social responsibility remains top of mind for luxury customers and encompasses more than just
environmental impact: 80 percent of luxury customers say they prefer brands that are socially
responsible, particularly among millennials. Further, 60 percent of luxury customers think luxury
brands should be more engaged than other industries.19

3/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

During 2016 - 2019, online searches for sustainable fashion tripled, and in 2019, 75% of the
millennial respondents in a US-based consumer survey reported that they considered sustainability
first when making a luxury purchase.20

The new generation of consumers also debunked traditional thinking on culture, race, size or gender,
embracing diversity and inclusivity, and looked for the same in luxury brands. In 2018, modest
fashion designed for Muslim consumers accounted for 40% of the luxury women’s ready-to-wear
category. Similarly, the inclusive plus-sized fashion market was on the rise and expected to clock
US$32 billion in 2020.

The concepts of masculinity and femininity were transforming, with younger generations opting for
gender-fluid fashion. In a 2017 Harris Poll, 12% of millennials identified themselves as transgender
or gender non-conforming. 21 In 2018, 35% of Gen Z respondents and 25% of the millennial
respondents in the US claimed personally knowing someone who preferred to be referred by gender-
neutral pronouns (they, them).22

However, most of the luxury brands lagged in embracing the new paradigm. Fashion was one of the
most wasteful and polluting industries, and brands such as Burberry used to burn their unsold luxury
goods rather than sell them on discount.23 Finally, in June 2019, a ban on the destruction of unsold
fashion goods was introduced in France, the centre for luxury fashion, with companies directed to
donate, reuse or recycle. 24

Digital Orientation

Young luxury shoppers increasingly used social media platforms, where they were influenced by
their peers and celebrities while making product choices and purchase decisions. In a survey in 2018,
21% of the millennials were found to depend on social media for inspiration on what to buy and wear
in high-end fashion and luxury products. 25

In 2019, Facebook had 2.5 billion monthly active users, and both Instagram and WeChat had over
one billion users each. Besides the global players, there was an explosion of regional next-gen
specialised social media networks that focused on users’ specific psychographic and demographic
appeals. These included the likes of Singapore-based Dayre, a safe space where women could come
together to express themselves, couple messaging apps Pairs in Japan and Between in South Korea,
interest-based community apps Hike and Helo in India, and TikTok, Bilibili, Douyin and
Xiaohongshu in China. Bilibili, a short video platform like TikTok, focused on gen Z, while
Xiaohongshu catered to millennial women looking for beauty, fashion and lifestyle recommendations,
and Chao was its equivalent for male consumers. Douyin enabled its users to select a person or item
of clothing and search for other posts containing them for comparisons, reviews and purchases.
WeVerse in South Korea enabled K-Pop idols to connect with their fans and included Gucci’s global
ambassador Kai (of EXO), and Chanel’s house ambassador Jennie Kim (of Blackpink). 26

The inability of the established luxury brands to keep pace with these dynamic social networks had
led to a widening gap between them and their target audience. Identifying, selecting, and effectively
engaging with key influencers on these social networks had become an essential marketing
competence. Luxury firms were struggling to reconcile their traditional desire for control over the
“brand image” with the freedom of expression that key influencers demanded.

Recommerce
Online migration of luxury buyers, along with their emphasis on pro-environment and authenticity,
and open endorsement by celebrities like Kardashians-Jenner, led to a growing acceptance of

4/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

recommerce - buying and selling of pre-owned luxury goods. In 2019, 34% of true-luxury consumers
– those who averaged US$39,000 in total luxury spending were found to sell second-hand products,
while 26% bought pre-owned goods.27 The specialised e-platforms such as Farfetch, TheRealReal,
Poshmark and Luxury Garage Sale emerged to enable resale and repurposing of high-end fashion
brands, while contributing to sustainable consumption.

In 2019, the second-hand market for luxury goods grew to €26 billion (US$29 billion) from €22
billion (US$25 billion) in 2018, and was growing four times faster than the primary market. While
watches and jewellery accounted for over 75% of all purchases, fashion and accessories were gaining
traction too.28 Luxury brands, such as Louis Vuitton, Chanel and Gucci, were starting to adopt it
either on their own platforms or by partnering with third-party platforms.

History of Gucci Group

In 1921, Guccio Gucci started as a luxury luggage and equestrian equipment manufacturer, opening
the first store Gucci in Florence, Italy. Crafted of the finest Italian leathers, his products and designs
soon gained popularity among the affluent, with the company expanding into apparel, shoes and
handbags. With leather becoming difficult to source during the Second World War, Gucci turned to
alternative textiles such as cotton and bamboo. It created a specially woven tan hemp with an
interlocking diamond symbol printed on top, which went on to become its signature design, and
launched its iconic bamboo bag (refer to Exhibit 8 for images of its bags with bamboo handles).

In 1951, Gucci opened a store in Milan, and in 1953, it went international by entering New York,
USA. The brand developed a following among Hollywood stars and American celebrities including
Elizabeth Taylor, Peter Sellers, John Wayne, Jackie Kennedy and Grace Kelly. By 1960s, Gucci
became the ‘go to’ luxury brand of the rich and famous globally, with Princess Margaret of England,
Audrey Hepburn, and Imelda Marcos among its loyal international clients, and successfully expanded
into the world of luxury accessories including eyewear, watches and jewellery. This was also the
time when it introduced its distinctive ‘Double–G’ monogram, and the Gucci stripes (refer to Exhibit
9 for details).29

In the 1970s, Gucci’s business grew 25 times over the previous decade. 30 However, in the 1980s,
fissures appeared in the company’s performance due to the Gucci family disputes, disgruntled
employees and tax evasion charges, which brought the house close to bankruptcy. The company
sought and received support from various investors over 1989 to 1999, before being fully acquired
by Pinault Printemps Redoute (PPR) in 2001. The Gucci group’s revenues had soared to US$2.25
billion, with a profit margin of 47% for the year 2000.

In 2013, the group was renamed ‘Kering’, and by end-2014, its portfolio included, among others,
Bottega Veneta, Alexander McQueen, Balenciaga, Brioni, Stella McCartney, Sergio Rossi,
Boucheron, Girard-Perregaux and Saint Laurent.31 By 2019, Kering was active in more than 120
countries, had 38,068 employees, and reported revenue of €15.8 billion (US$17.7 billion) and
operating profit of €4.8 billion (US$5.4 billion).32 Gucci dominated the group’s business with a
contribution of 63% to its revenues and 78% to its profits. Bottega Veneta and Saint Laurent followed
with a combined share of 21% and 15% of the group’s revenues and profits respectively.33

5/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

Gucci Brand’s Creative Journey

In the late 1980s, Gucci’s brand equity was significantly diluted because of the proliferation of its
accessories collection, which comprised some 22,000 products including key chains, alcohol, playing
cards and toilet paper that carried its logo and were sold through department stores. There was also
a significant rise in counterfeit Gucci products such as its coveted handbags. To reinvigorate the
brand, Dawn Mello, Bergdorf Goodman's ex-president, was appointed as the fashion label’s new
creative director in 1989.

Mello and her team downsized the product line from 22,000 to 7,000 and reduced the number of
retail stores from 1,000 plus to 180.34 However, most of the designs introduced under Mello failed,
and in 1993, the company reported a loss of US$102 million.35 Consequently, Mello quit, and in
1994, her assistant Tom Ford, the American ready-to-wear designer, was promoted as the creative
director.

Tom Ford

The most important thing to remember when designing a brand is that a great brand must stand
for something. Your message must be strong, powerful, and it must be delivered quickly.
- Tom Ford, Former Creative Director, Gucci36

Ford turned Gucci around by reclaiming the opulence and extravagance once associated with the
brand, and streamlining the product line to focus only on luxury retail. His collections for 1995 and
1996 helped Gucci restore its cult status (refer to Exhibit 10 for details). The new designs found an
immediate resonance in the market, and Gucci’s revenues doubled from 1995 to 1996.

Besides creating designs, Ford was also responsible for visual merchandising and advertising, and
ensured that the brand’s displays and campaigns were in line with its brand positioning. He created
racy on-the-edge advertisements, which despite being controversial, revolutionised the high-fashion
industry and recharged the Gucci brand (refer to Exhibit 11 for details). In 1999, he relaunched the
iconic ‘Jackie’ bag, which became the must-have item that year. 37

Despite Ford continuing to deliver successfully, he quit in 2004 due to differences with the parent
company. Alessandra Facchinetti replaced Ford as the creative director for womenswear. However,
barely two seasons later, in 2006, she was replaced by Frida Giannini, who took over as the creative
director for both womenswear and menswear.

Frida Giannini

Duality: the ability to look ahead without losing sight of the past.
- Frida Giannini, Former Creative Director, Gucci38

Giannini stepped away from her predecessor’s mantra of sex appeal, and instead focused on reviving
and refreshing the classic Gucci designs, such as the Flora print (inspired by and created for Grace
Kelly, princess of Monaco in 1966), the Bamboo bag which had first appeared in 1947, and the red
and green equestrian stripes which had been introduced in the 1950s. Her ready-to-wear collections
were also influenced by the designs of the past such as the 80s glam rock, 70s vibrant colour palettes,
and the 20s and 40s Schiaparelli inspired evening dresses (refer to Exhibit 10 for the images of her
collections).39

6/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

Her attempts initially proved to be massively successful, despite the red and green stripes becoming
the most copied design by early 2000s, leading to a surge in tacky counterfeits. However, both critics
and customers panned her subsequent collections during 2013-2014, describing them as repetitive
and lacking innovation and creativity. In addition, they were deemed as gaudy, stale and logo
obsessed, with two-third of the brand’s revenue contributed by logo-centric designs. The dismal state
of the brand by the end of 2014 – a 1.8% decline in sales, 6.7% drop in its profits and poor reviews
- led to the ouster of both Giannini and Patrizio di Marco, Gucci’s CEO since 2009. 40

Repositioning Gucci: A Disruptive Approach to Luxury Fashion

Gucci had become a brand that had too much emphasis on craftsmanship, to the point that it was
no longer pushing the boundaries of fashion...For Gucci to evolve to its next phase, the change
had to be swift and company-wide - something that would affect the company culture….
- Marco Bizzarri41

In January 2015, Bizzarri, the former CEO at Stella McCartney and Bottega Veneta, was brought in
as the new CEO of Gucci. He recognised that Gucci, and the luxury industry, needed to reinvent to
stay relevant in an environment that was fast evolving in terms of culture, consumer expectations and
technology. And in his endeavour, Bizzarri found a partner in the relatively unknown Alessandro
Michele, a Gucci insider since 2002, whom he appointed as the new creative director.

Alessandro Michele

When Gucci started, it was another age. If you bought a Gucci bag, you belonged to the jet set.
The jet set doesn’t exist anymore. I’m trying to speak to the world, to everyone.
- Alessandro Michele, Creative Director, Gucci42

Michele had to put together his first collection for menswear in less than a week because of Giannini’s
premature departure, followed by the women’s collection for the same season a month later (refer to
Exhibit 10 and Exhibit 12 for more details on his designs and collections). Favourable results began
to show immediately, and in 2016, Gucci’s sales grew by 13 percent to reach US$5.9 billion. 43
Michele was given the “Designer of the Year 2016” award by British GQ magazine, the
“International Accessories Designer of the Year 2016” for the second year consecutively by the
British Fashion Council, and the “International Award 2016” from the Council of Fashion Designers
of America (CFDA).44

During 2015-2019, Bizzarri and Michele undertook many strategic initiatives that drove and
accelerated the transformation of the luxury industry while reinstating Gucci’s position
unequivocally as the trendsetter and the industry leader. The first and the foremost was setting up a
shadow committee of millennial advisors, structured of Gucci’s most talented employees below the
age of 30 years. The groups’ insights served as a wake-up call for Gucci, promoting a different way
of looking at things. 45

Cross-generational Appeal

To appeal to the young generations while retaining its conservative loyalists from the past, Gucci
focused on creating a product range that comprised both existing and potential trends, with an aim to
target a state of mind rather than just age. It created high fashion clothes by blending luxury with
street wear (such as the ‘bootleg’ inspired logo T-shirt, horsebit fur-lined loafers or eclectic sneakers),
and heightened the social consciousness of the brand through its inclusive gender-fluid clothes such

7/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

as pussy-bow blouses, patent leather boots, thigh skimming silky shorts and handbags for men. 46 In
the brand’s runway shows, Michele would often have the male models wear items from the women’s
collection and vice versa. These luxury accessories with bold colours and patterns, including
contemporised Gucci’s iconic symbols such as the GG logo with floral and animal motifs, soon
became a rage with young luxury seekers. 47

In addition, Gucci replaced its old brand ambassadors like Grace Kelly and Jacqueline Kennedy
Onassis with contemporary ones like Beyoncé, Rhianna, Blake Lively, Brad Pitt, Rachel McAdams
and Salma Hayek; and used celebrities like Sir Elton John and Lady Gaga as inspirations for its
fashion shows and designs. 48 Michele also actively collaborated with artists like Coco Captain,
Pusha T, and 2 Chainz, and entities like Major league Baseball, to co-create content that enabled
Gucci to connect with the hip-hop crowd, and drive its demand among them.49 By 2017, in just two
years, there was a radical change in the profile of Gucci customers, with millennials’ contribution to
the revenues of the fashion house growing from almost nothing to 50%, which by 2019 increased to
60%.50

Gucci also strived to embrace social values that the young esteemed and increasingly expected from
luxury brands. In 2017, it partnered with director Glen Luchford to create ‘Soul Scene’, a short music
film that supported the global black movement and featured only black models. Later, in the year,
when the fashion label was accused of copying Harlem designer Dapper Dan in its Resort runway
show, it not only publicly apologised but also partnered with Dan to co-create collections and
supported him in establishing his own atelier. In 2018, Gucci, unlike its earlier policy of corporate
neutrality, supported the anti-gun movement and contributed US$500,000 to the cause following the
mass shooting at Stoneman Douglas High School.51

Adopting sustainability as its core value, in 2017, Gucci vowed to stop using animal fur, and
committed to a ten year ‘Culture of Purpose’ charter that aimed to reduce the environmental impact,
enhance employees and community welfare, and improve operational and production efficiency
through structural innovations. 52 In 2018, the company launched Gucci Equilibrium, an online
platform that detailed and tracked in real time the initiatives taken by the company in upholding the
charter.53 By 2019, the company went carbon neutral, including its entire supply chain, and at the
G7 summit held during the year, its parent Kering spearheaded French President Emmanuel
Macron’s new Fashion Pact that aimed at stopping global warming, restoring biodiversity and
protecting the oceans. 54

Social Media Thrust

In social media terms, we see Gucci’s platforms both as open doors to the outside world –
allowing him [Michele] to co-create with other people – and a reflection of what millennials
believe in.
- Robert Triefus, EVP, Brand and Customer Engagement, Gucci55

Gucci developed original social media campaigns, often in collaboration with celebrities and entities.
For example, in 2016, Michele launched #GucciGram, an insta-initiative where artists were invited
to rework iconic Gucci patterns in any way they deemed fit. 56 In 2017, Gucci partnered with GQ to
produce a film series with up-and-coming male artists and uploaded it on its website, while posting
short clips as Instagram stories57.The fashion house also created its first meme-inspired campaign
##TFWGucci (That Feeling When Gucci), to launch its new watch collection, Les Marché Des
Merveilles, by teaming up with popular meme artists like @youvegotnomale,
@textsfromyourexistentialist, @scariestbugever and visual artists like Olaf Breuning.58

8/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

By 2018, Gucci was active on multiple social media platforms including Instagram, Twitter,
Facebook, WeChat and Snapchat. Unlike earlier, when campaigns were launched only at the time of
two seasonal collections and the pre-collections, the fashion brand generated content frequently to
drive a high level of traction and user engagement (refer to Exhibit 13 for comparison with other
luxury brands). 59,60 Besides tailoring the content for each social handle, the fashion house also
ensured that the same stories were told at all other interfaces as well, including its website, packaging
and offline platforms. In Triefus’s view, “the ability to connect all the dots in a coherent, cohesive
way, is a really fundamental element in Gucci’s success”.61

Omni-Channel Approach

Going Digital

We need to stay ahead of the competition and rethink how fashion is conceived and experienced,
which means factoring in the role of digital.
- Marco Bizzarri62

In 2015, Gucci relaunched its website, received 100 million visitors by the end of the year and
recorded US$19.3 million in online revenues at an annual growth of 22%.63 In 2016, it followed up
with an investment of 35% of its total budget to strengthen its digital interface and omni-channel
retailing.64

Gucci’s e-commerce stores offered a wide range of merchandise and mirrored its runway look for
each outfit, comprising visually stimulating and aesthetically pleasing product pages with a detailed
breakdown of each collection - the inspiration behind it and the stories of each item and design. It
also offered top-tier functionality with full services such as robust search and navigation, free returns,
a find in-store option, product information, gift wrapping and customer service via phone and e-mail
shipping, and free two-day shipping. Consecutively in 2016 and 2017, Gucci was judged as the best
performing digital fashion brand (including website and e-commerce, digital marketing, social media
and mobile).65 By the end of 2017, Gucci had a 130% increase in web traffic, surpassing that of
erstwhile leader Louis Vuitton.66

While Gucci did partner with key e-commerce sites, including Tencent, the fashion house primarily
focused on developing in-house digital capability to keep control over its merchandise and branding
instead of relying on third-party sellers. 67 By the end of 2019, it sold exclusively through its 487
directly operated physical stores, a directly operated online store active in 35 markets, a few
franchises, and select department and specialty stores - offline and online. 68 Gucci also reinvented
the traditional shop assistant role by launching a global client service centre based in Florence, with
regional hubs in the US, Korea, Japan and Southeast Asia, offering a seamless and personalised
experience to e-shoppers. Potential customers could connect directly with its 350 dedicated online
client advisors by phone, email or live chat to discuss product-related queries. 69

New Retail Formats

It’s the idea of a candy shop...You come, you pick, you enjoy.
- Marco Bizzarri70

Gucci’s experiential retail strategy was borne out of Bizzarri and Michele’s belief that millennials
and younger generations were bored with traditional stores and bland websites and increasingly

9/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

looked for differentiated and interesting experiences. 71 Besides remodelling the stores, the ‘new
store concept’ involved fully integrating the in-store experience with Gucci’s digital platforms.

By end 2019, Gucci had renovated 60% of its total physical stores, and planned to finish the process
by 2021-2022.72 The new stores, with their open and light concept, aimed to create an accessible,
intimate and friendly retail environment bringing products and millennials closer together. Their soft
and welcoming décor comprised tufted velvet walls, armchairs and sofas, marble staircases, colourful
exotic carpets and vintage displays, with shoppers encouraged to touch, feel and try the merchandise.
The stores also included multisensory screening facility with 3D technology enabling customers to
listen to house documentaries, checkout upcoming collections, or use augmented reality applications
to design their own bags or shoes. The old culture of security guards was done away with, replaced
by store associates, called connectors, to provide assistance and narrate Gucci’s story. 73

In 2017, the first store in South-east Asia was revamped in line with the new vision at Ion Orchard,
an upmarket shopping mall in Singapore. It allowed shoppers to customise handbags with different
embroidered and bejewelled patches, and personalise sneakers with their initials. 74 In the US, Gucci
renovated its10,000 square feet outlet at SOHO, New York in 2018. Brightly lit and colourful, the
boutique-store featured a mix of haute couture and high street merchandise, with video installations
and copies of a 1985 issue of Interview magazine featuring Madonna.

In 2018, Gucci worked towards overcoming its under-representation in the rapidly growing travel
retail (that encompassed airport stores, in-flight purchases, duty-free stores neighbouring airports,
cruises and online orders picked up at the airport) by adding 11 net locations in the channel. Travel
retail had increased by 9.3% to reach US$76 billion in 2018 and was particularly driven by travellers
from emerging markets including China, India, Russia and Brazil. 75 Gucci was also active in the
second-hand luxury market and was the most sought-after brand followed by Louis Vuitton.76 Its
parent Kering had partnered with The RealReal, the leading online marketplace for authenticated,
consigned luxury goods, to sell its brands’ unsold goods instead of destroying them.

Continuing with its strategy to drive direct sales, in November 2019, Gucci introduced the concept
of themed pop-up stores, debuting in Denver, US, with plans to roll out globally by the following
year in cities like Paris, Seoul and Hong Kong amongst others. Known as Gucci pin, these stores
were colourful rectangular displays that offered dedicated collections along with innovative and
immersive digital experience. The theme for the first wave of Gucci pin stores was about the gift
giving time of year, with Chinese New Year, Mickey Mouse, and a Psychedelic aesthetic as the
themes for the next waves to follow in 2020.77 Open on average for about five weeks, the pop-up
stores were expected to reach consumer segments that were not accessible by its regular stores. 78

By the end of 2019, the share of Gucci’s retail channel sales (including online) had increased to 85%
from 79% in 2014. The enhanced direct customer engagement and selling allowed Gucci to have
greater control over the consumer shopping experience, product assortment, merchandising and
customer service.

Merchandising

As a luxury-fashion brand, Gucci’s portfolio comprised both staples (70%) that remained unchanged
from season to season, and trendy items (30%) that reflected ongoing cultural conversations and
created a buzz in the industry. However, this ability to cater to the different tastes and appetites
hinged on its merchandising strategy. Earlier, like other luxury players, merchandising at Gucci was
based on the sales data of what had worked previously. The strategy did not consider product
sensibilities at the time of designing, and market feedback was often received too late, typically

10/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

towards the end of a season. This often resulted in collections having a range of products that were
not thematically aligned or/and were the poorer versions of previous seasons. According to Bizzarri,
the solution was in real-time collaboration between the creative and merchandising functions.

In March 2015, he roped in Jacopo Venturini from Valentino as the new chief merchandising officer,
to work together with Michele throughout the design process (and not after) for creating
commercially viable product lines that comprised new and old products (from the previous seasons)
that could be carried forward. 79 The new strategy enabled Gucci’s collections to become more
coherent, and blended, while being in line with the market insights. 80 In 2019, new introductions
across all product categories represented approximately 30% of Gucci’s total business.81

New Growth Frontiers

Continuing to break new ground, in 2019, Gucci made a foray into high-end jewellery by launching
its first collection, Hortus Deliciarum or Garden of Delights, during the Haute Couture week in Paris
and opened its first and only high jewellery boutique at Place Vendôme, France. 82 Jewellery, with
an estimated market size of about €18 billion (US$20 billion), was one of the two fastest-growing
segments (the other was shoes) of the personal luxury goods industry. 83

The year also saw Michele reviving and transforming Gucci Beauty, the fashion brand’s make-up
line and fragrances. The global luxury cosmetics market size, estimated at US$53 billion in 2018,
was expected to grow at a CAGR of 5.6% to reach US$81 billion by 2026. Gucci debuted with a
lipstick collection housed in funky vintage floral prints, comprising 58 pieces, 36 hues and three
formulations. The launch campaign on Instagram glorified ‘beauty in imperfection’ and underscored
Michele’s penchant for quirky and bold aesthetics, selling over one million lipsticks in the first month
itself. 84 In addition, Gucci strengthened its mark in the fragrance world by introducing ‘The
Alchemist Garden’, the 14-piece fine fragrance collection, created in partnership with perfumer
Alberto Morillas, and followed it up with the launch of Mémoire d’Une Odeur, the first gender-
neutral perfume, and a new campaign featuring famed musician Harry Styles. 85

Gucci sold its beauty range through Coty (licensing agreement with Kering) and generated €400
million (US$448 million) in annual revenue. In comparison, Chanel, the market leader in the category,
reported earnings of more than US$3 billion from beauty products. François-Henri Pinault, President
and CEO of Kering, declared,

We want to achieve better performances in this segment. We cannot be satisfied with that, because
the [fragrance and beauty] categories are gateways to a luxury label like Gucci…. 86

A Successful Turnaround…and yet?

It is fair to say that the first half of 2020 has been the toughest period we have faced… Our results
today underscore the extent of the disruption exacted by the pandemic on our operations.
- François-Henri Pinault 87

Over the five-year period, 2015-2019, Gucci’s revenue grew by cumulative aggregate growth rate
(CAGR) of 20%, and its operating profits by CAGR of 33% (refer to Exhibit 14 for the financial
performance of the brand). However, the year 2019 clocked a much lower annual growth than 2018
and 2017. Was this slowdown just a minor bump in the road? After all, it was inevitable that Gucci
would not be able to sustain its exponential growth for long and would eventually settle to a more

11/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

reasonable pace. Or was this an indication that the newness of Michele’s designs had begun to wear
off, and it was time to reinvent again?

Another point of dilemma for Gucci was about its recent entry in the high-end beauty category. As
cosmetic products were an affordable entry point to buy luxury brands, unlike the ‘out of reach’
handbags or shoes, Gucci hoped to reach out to a larger and younger audience for whom the brand
was aspirational but unaffordable. However, could the luxury brand’s easy availability hurt its equity?
Moreover, the beauty market already had firmly established brands such as Chanel, Christian Dior
and Estée Lauder, which were globally recognised for their superior quality and expertise in the
domain.

The worst blow came in 2020 with the spread of Covid-19, the global pandemic. With the entire
world under lockdown, most economies contracted and discretionary spending, especially on luxury
items, was severely hit. Globally, Gucci’s sales plunged by 23% in the first quarter and by 44.7% in
the second quarter. 88 In the mature markets, the decline was 39%, while the emerging markets
dropped by 27% over the six months. However, the fashion house’s strong digital capability did
cushion its fall and the brand’s online sales soared at an unprecedented rate.

Going forward, how should Gucci plan to emerge out of the crisis? The robust revival of its sales in
China in the second quarter was a beacon of hope that other markets would follow suit once the
lockdowns were lifted, and that the consumers would indulge themselves to compensate for the
inability to consume during the lockdowns. However, so far, Eurozone, the UK and the US markets
were exhibiting low consumer confidence indexes. 89 If these regions did not pick up as expected,
Gucci carried the risk of becoming over reliant on one nationality. In 2019, the global luxury market
was already skewed, with Chinese nationals contributing 35%, and with Covid-19, this was estimated
to increase to 50% by 2025.90

The worst case for Gucci would be if the crisis left a long-lasting impact on luxury buying behaviour.
Bizzarri feared, “Perhaps there will be more sobriety; we’ve seen this after other crises, in 2001 or
2008, there are cycles.” 91 McKinsey’s study in June 2020 across 45 countries reported that the
pandemic had resulted in a significant consumer shift towards ‘mindful shopping’ with cutbacks on
spending in discretionary categories such as apparel, footwear and travel, and trading down in value
by opting for less expensive products (refer to Exhibit 15 for details on the study findings). 92

Given the different scenarios, what should Gucci’s next steps be?

12/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

EXHIBIT 1: WORLDWIDE PERSONAL LUXURY GOODS MARKET SIZE

300 281
254 262
245 244
250 219
207 212
200 186

150

100

50

0
2011 2012 2013 2014 2015 2016 2017 2018 2019

Worldwide personal luxury goods market in € billions

Source: Kering Annual Report 2019

EXHIBIT 2: WORLDWIDE PERSONAL LUXURY GOODS MARKET BY CATEGORY

Market value 2019 Reported YoY Category share

(in € billions change
Apparel 64 +5% 23%

Leather goods 57 +11% 20%

Shoes 21 12% 7%

Watches 39 +1% 14%

Jewellery 21 +12% 7%

Perfumes and cosmetics 60 +7% 22%

Other (eyewear, textile 19 N/A 7%

accessories, etc.)

Source: Kering Annual Report 2019

13/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

EXHIBIT 3: TOP EIGHT LUXURY MARKETS IN 2019

Country Size (in € billions) YoY Growth Share of total

market
United States 75 +5% 27%

Mainland China 30 +30% 11%

Japan 24 +11% 9%

Italy 19 +1% 7%

United Kingdom 17 +4% 6%

France 17 +1% 6%

South Korea 15 +15% 5%

Germany 12 +1% 4%

Source: Kering Annual Report 2019

14/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

EXHIBIT 4: A SNAPSHOT OF CHANEL PRODUCTS

Source: Free to use images under creative commons license, available at

https://www.flickr.com/photos/rocor/25127061347/in/photolist-;
https://www.flickr.com/photos/popstylist/297941082/in/photolist-;
https://www.flickr.com/photos/_jeanette/4355550578/in/photolist;
https://www.flickr.com/photos/kagen33/24412286774/in/photolist-;
https://www.flickr.com/photos/joerg73/2997975917/in/photolist-;
https://www.flickr.com/photos/bbaunach/1055569153/in/photolist, accessed October 2020.

15/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

EXHIBIT 5: COLLECTIONS BY GUCCI’S KEY COMPETITORS

Luxury Brand Collections

Chanel Chanel ready to wear collection spring 2019, available at

https://www.vogue.com/fashion-shows/spring-2019-ready-to-wear/chanel
Chanel seasonal bag collection 2019, available at
https://www.bragmybag.com/chanel-cruise-2019-seasonal-bag-collection/
Chanel haute couture collection show spring 2019, available at
https://www.vogue.com/fashion-shows/spring-2019-couture/chanel
Chanel eyewear spring-summer 2019, available at
https://www.chanel.com/sg/fashion/news/2019/03/eyewear_spring-
summer2019.html
Chanel shoes collection 2019-20, available at
https://lofficielbaltics.com/en/fashion/chanel-cruise-2019-20-
shoes#image-63628

Louis Vuitton Louis Vuitton ready to wear collection fall 2019, available at
https://www.vogue.com/fashion-shows/fall-2019-ready-to-wear/louis-
vuitton
Louis Vuitton spring-summer collection and campaign 2019, available at
https://eu.louisvuitton.com/eng-e1/stories/spring-summer-2019-
collection#
Louis Vuitton resort collection 2019, available at
https://www.vogue.com/fashion-shows/resort-2019/louis-
vuitton/slideshow/collection
Louis Vuitton bags, shoes and ready to wear in menswear collection
spring 2019, available at https://www.vogue.com/fashion-shows/spring-
2019-menswear/louis-vuitton/slideshow/collection#36

Christian Dior Christian Dior ready to wear fashion show and collection fall 2019,
available at https://www.vogue.com/fashion-shows/fall-2019-ready-to-
wear/christian-dior
Christian Dior bag collection 2019, available at
https://www.spottedfashion.com/2018/11/16/dior-cruise-2019-bag-
collection-featuring-the-diorodeo-bag/
Christian Dior watch collection 2018, available at
https://www.globalblue.com/destinations/france/paris/dior-exceptional-
2018-timepieces#slide1
Christian Dior jewellery collection 2018, available at
https://www.katerinaperez.com/articles/dior-dior-dior
Christian Dior jewellery collection 2019 and 2020, available at
https://www.pinterest.fr/thierrymartin/dior-gem-dior-2019-tie-dior-2020/

16/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

EXHIBIT 6: A SNAPSHOT OF LOUIS VUITTON PRODUCTS

Source: Free to use images under creative commons license, available at

https://www.needpix.com/photo/download/455492/bag-louis-vuitton-brown-beige-noble-expensive-beautiful-
pattern-free-pictures; https://www.flickr.com/photos/34128007@N04/7955385870;
https://www.pikrepo.com/navll/brown-louis-vuitton-monogram-leather-handbag;
https://www.flickr.com/photos/evarinaldiphotography/6441423397/in/photostream/;
https://www.flickr.com/photos/vpickering/38509694915/in/photolist;
https://www.flickr.com/photos/hmrcgovuk/12517209665/in/photolist, accessed October 2020.

17/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

EXHIBIT 7: A SNAPSHOT OF CHRISTIAN DIOR PRODUCTS

Source: Free to use images under creative commons license, available at

https://commons.wikimedia.org/wiki/File:Palmyre_gown_-_Dior.jpg;
https://www.flickr.com/photos/museumatfit/49013463143/;
https://www.flickr.com/photos/museumatfit/49014195882/in/photostream/Christian
https://commons.wikimedia.org/wiki/File:Christian_Dior_(Moscow_exhibition,_2011)_18.jpg
https://www.flickr.com/photos/150488282@N07/38595681041/in/photolist;
https://pixabay.com/photos/bag-dior-x%E1%BB%8Bn-868866/; and
https://www.flickr.com/photos/queenbeebh/9107116329/in/photolist-, accessed October 2020.

18/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

EXHIBIT 8: GUCCI’S BAMBOO BAGS

Source: Free to use images under creative commons license, available at https://www.purseblog.com/gucci/gucci-
bamboo-bags-an-iconic-history/;
https://www.pxfuel.com/en/free-photo-ozucd;
https://www.flickr.com/photos/28964535@N08/3984624876/in/photolist-;
https://commons.wikimedia.org/wiki/File:Gucci,_bamboo_bag,_1960-65_ca._(firenze,_archivio_storico_gucci).jpg
https://www.jomashop.com/gucci-bamboo-handle-marmont-shoulder-bag-602270-0olfx-
https://www.matchesfashion.com/intl/products/1320819?country=SGP&rffrid=sem.Google.n=g.cid=927730487.aid
=51878881648.k=.mty=.d=c.adp=.cr=221007431193.tid=pla-, accessed October 2020.

19/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

EXHIBIT 9: GUCCI PRODUCTS WITH ITS LOGO AND STRIPES

Source: Free to use images under creative commons license, available at

https://www.flickr.com/photos/mathieulebreton/7170056502/in/photolist;
https://www.flickr.com/photos/my_beading_heart/7146932125/in/photolist;
https://www.flickr.com/photos/queenbeebh/6448368327/in/photolist;
https://www.flickr.com/photos/fashioneggplant/31296530874/in/photolist
https://www.flickr.com/photos/22960092@N08/2406072486/in/photolist-
https://www.flickr.com/photos/oceanwalkmarketinginc/5835858879/in/photolist
https://www.flickr.com/photos/queenbeebh/6338262504/in/photolist, accessed October 2020.

20/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

EXHIBIT 10: COLLECTIONS AND CAMPAIGNS BY GUCCI’S CREATIVE DIRECTORS

Creative Designs – Pictures / Slide shows Fashion Show Videos / Interviews

Director
Tom Ford Tom Ford’s iconic designs for Gucci, Tom Ford’s spring 1996 fashion show, video
available at Harper’s Bazaar, “Proof That available at,
1994 - 2004 Tom Ford-Era Gucci was fashion at its https://www.youtube.com/watch?v=i4o-
Peak”, 28 August 2018, available at zOjMrjs
https://www.harpersbazaar.com.au/fashio
Tom Ford’s fall 1995 fashion show, video
n/tom-ford-birthday-gucci-17236
available at,
https://www.youtube.com/watch?v=VRqMzh
wikks
Frida Iconic designs by Frida Giannini, Frida Giannini’s fall shows at Milan Fashion
Giannini available at Dazed, “Frida Giannini’s Week fall 2007, video available at
Gucci legacy”, 15 December 2014, https://www.youtube.com/watch?v=_VE2gIA
2006 - 2014 https://www.dazeddigital.com/fashion/gal BkS8
lery/18940/0/frida-giannini-s-gucci
Frida Giannini’s ready to wear fall 2013 show,
video available at
https://www.vogue.com/video/watch/fall-
2013-ready-to-wear-gucci
Frida Giannini’s interview, video available at
https://www.youtube.com/watch?v=3xydoAm
6o_g&list=PLHSN2GKzdMVmE8ZwelkCjrrh
ez0mghCKq&index=24

Alessandro Alessandro Michele ready to wear fall Interview of Alessandro Michele, “In the
Michele 2015 collection, available at Studio”, New York Times, September 2015,
https://www.vogue.com/fashion- video available at
2015 shows/fall-2015-ready-to- https://www.youtube.com/watch?v=5jio6v0sC
onwards wear/gucci/slideshow/collection#26 ko
Alessandro Michele, Milan, Gucci Spring
Summer 2016 -Fashion Channel, September
2018, video available at
https://www.youtube.com/watch?v=MorY6LP
Wu0E
Alessandro Michele, Gucci Spring Summer
2019 full fashion show, video available at
https://www.youtube.com/watch?v=plK47P-
99QY
Gucci’s advertising campaigns by the three Bagaholic 101, “Gucci Heritage, Icons, and
creative directors Beyond: Gucci Print Ads and Advertising
Campaigns”, 18 September 2018, available at
https://bagaholic101.com/gucci-heritage-icons-and-
beyond-gucci-print-ads-and-advertising-campaigns/

21/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

EXHIBIT 11: GUCCI CAMPAIGN BY TOM FORD

Source: Free to use images under creative common license, available at

https://www.flickr.com/photos/calliope_fashion/386597936/in/photolist; For Gucci's controversial 'G' commercial,
refer to https://www.flickr.com/photos/calliope_fashion/386598094/in/photolist

EXHIBIT 12: GUCCI DESIGN BY ALESSANDRO MICHELE

Source: Alessandro Michele design pre-fall 2019, free image under creative common license available at
https://www.flickr.com/photos/rverc/47936818508/in/photolist-2g31J3Q-2iifUdk-ARTfev/

22/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

EXHIBIT 13: TOP LUXURY BRANDS SOCIAL MEDIA FOLLOWERS, MAY 2019 (IN MILLIONS)

34.9
Chanel 21.9
13.2
34.3
Gucci 18.2
5.6
32
Louis Vuitton 23.3
7.4
25.5
Dior 16.6
8
20.8
Dolce & Gabanna 11.7
5.3
19.6
Prada 6.6

18
Versace 5.4
4.7
14.7
Michael Kors 17.9
3.5
14.6
Burberry 17.3
8.4
14.3
Armani 8.6
3.4

Instagram Facebook Twitter

Source: Statista, “Leading luxury brands with the most followers on Instagram as of May 2019”,
https://www.statista.com/statistics/483753/leading-luxury-brands-instagram-followers/;
“Leading luxury brands with the most followers on Facebook as of May 2019”,
https://www.statista.com/statistics/693747/luxury-brands-follower-facebook/; and
“Leading luxury brands with the most followers on Twitter as of May 2019”,
https://www-statista-com/statistics/693784/luxury-brands-follower-twitter/; accessed September 2020.

23/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

EXHIBIT 14: FINANCIAL PERFORMANCE OF GUCCI 2014 – 2020

In Euro million 2015 2016 2017 2018 2019 First Half

2020

Revenue 3,898 4,378 6,211 8,285 9,628 3,072

Recurring 1,032 1,256 2,124 3,275 3,947 929

operating income
EBITDA 1,206 1,425 2,331 3,515 4,464 1,236

Gross operating 192.8 184.7 248.5 312.7 337.3 98.4

investments*

Average 10,570 10,253 11,543 14,628 17,157 18,208

headcount

Directly operated 525 520 529 469 487 489

stores

* Purchases of property, plant and equipment and intangible assets

Source: Kering Annual Reports

24/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

EXHIBIT 15: CHANGE IN SHOPPING MINDSET SINCE COVID-19 (JUNE 2020)

Percentage of Respondents who are doing more*

70
61
60

50
50 46
44 45 45
40 40
40
34 34
31 32 32
30 29
30 26
22
20
20 18 17

10

0
US UK France Germany Spain Italy India Japan Korea China

Becoming more mindful of where I spend my money

Changing to less expensive products to save money
*Survey conducted globally between June 15 and June 21, 2020

Source: McKinsey & Company, “Covid-19 Consumer Pulse Surveys”, https://www.mckinsey.com/business-

functions/marketing-and-sales/our-insights/a-global-view-of-how-consumer-behavior-is-changing-amid-covid-19,
accessed September 2020.

Endnotes:

1
Polimoda, “The Poetoc Reactivation of Gucci”, https://www.polimoda.com/the-poetic-reactivation-of-gucci, accessed August 2020.
2
1 Euro = US$1.12, average currency exchange rate for 2019; can be used for all Euro to USD conversions, unless specified otherwise.
3
Dominic-Madori Davis, “Louis Vuitton and Gucci are the Only 2 Luxury Companies to Consistently Rank among the World's Most
Valuable Brands for the Last 20 Years”, Business Insider, 24 January, 2020, https://www.businessinsider.com/how-gucci-louis-vuitton-
became-two-most-valuable-luxury-brands-2020-01, accessed August 2020.
4
Saheli Roy Choudhury, “Global Luxury Sales Could Collapse up to 60% in the Second Quarter, Consulting Firm Says”, CNBC, 8
May 2020, https://www.cnbc.com/2020/05/08/coroanvirus-bain-report-on-global-luxury-sales-for-2020-and-beyond.html, accessed
August 2020.
5
The World Bank, “Unemployment, total (% of total labor force)”, https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS, accessed
September 2020.
6
S & P Global, “Economic Forecasts July 2020”, https://www.spglobal.com/ratings/en/research-insights/topics/economic-reports-july-
2020#:~:text=We%20now%20forecast%20global%20GDP,emerging%20markets%2C%20led%20by%20India, accessed September
2020.
7
Luisa Zargani, “Marco Bizzarri on Possible Post-Coronavirus Scenarios, Supporting Creativity”, WWD, 26 March 2020,
https://wwd.com/fashion-news/designer-luxury/marco-bizzarri-on-possible-post-coronavirus-scenarios-supporting-creativity-
1203547920/, accessed September 2020.
8
Claudia D'Arpizio, Federica Levato, Filippo Prete and Joëlle de Montgolfier, “Eight Themes That Are Rewriting the Future of Luxury
Goods”, Bain & Company, 5 February, 2020, https://www.bain.com/insights/eight-themes-that-are-rewriting-the-future-of-luxury-
goods/, accessed September 2020.
9
McKinsey, “The State of Fashion 2020”,
https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/the%20state%20of%20fashion%202020%20navigating
%20uncertainty/the-state-of-fashion-2020-final.ashx, accessed September 2020.

25/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

10
Kering Annual Report 2019
11
Statista, “Share of the Global Personal Luxury Good Market by Channel”, https://www-statista-
com.libproxy.smu.edu.sg/statistics/883157/share-of-the-global-personal-luxury-goods-market-by-channel/, accessed September 2020.
12
Claudia D'Arpizio, Federica Levato, Filippo Prete and Joëlle de Montgolfier, “Eight Themes That Are Rewriting the Future of Luxury
Goods”, Bain & Company, 5 February, 2020, https://www.bain.com/insights/eight-themes-that-are-rewriting-the-future-of-luxury-
goods/, accessed September 2020.
13
Ibid.
14
Chanel, “Financial Results”, https://www.chanel.com/us/financial-results/, accessed September 2020.
15
1 USD = 0.88 Euro, March 2019
16
LVMH Annual Report 2019, https://r.lvmh-static.com/uploads/2020/04/lvmh_rapport-annuel_gb_2019.pdf, accessed September
2020.
17
Ibid.
18
Ibid.
19
Ibid.
20
McKinsey, “The State of Fashion 2020”, https://www.mckinsey.com/~/media/...final.ashx, accessed September 2020.
21
Jennifer Murtell, “The Rise of Gender-Neutral Branding”, Packaging Strategies, 12 September 2019,
https://www.packagingstrategies.com/articles/95077-the-rise-of-gender-neutral-branding, accessed September 2020.
22
Pew Research Center, “Gen Z More Familiar with Gender-Neutral Pronouns”, 14 January 2019,
https://www.pewsocialtrends.org/2019/01/17/generation-z-looks-a-lot-like-millennials-on-key-social-and-political-issues/psdt_1-17-
19_generations-02/, accessed September 2020.
23
Kate Holton, “Burberry Ends Bonfire of the Luxuries after Waste Outcry”, Reuters, 6 September 2018, https://www.reuters.com/...,
accessed September 2020.
24
McKinsey, “The State of Fashion 2020”, https://www.mckinsey.com/~/media/mckinsey/...ashx, accessed September 2020.
25
Ibid.
26
Ibid.
27
BCG-Altagamma, “2019 True-Luxury Global Consumer Insight Study”, 17 April 2019, http://media-
publications.bcg.com/france/True-Luxury%20Global%20Consumer%20Insight%202019%20-%20Plenary%20-%20vMedia.pdf,
accessed September 2020.
28
Claudia D'Arpizio, Federica Levato, Filippo Prete and Joëlle de Montgolfier, “Eight Themes That Are Rewriting the Future of Luxury
Goods”, Bain & Company, 5 February, 2020, https://www.bain.com/insights/eight-themes-that-are-rewriting-the-future-of-luxury-
goods/, accessed September 2020.
29
Dena Silver, “Charting the Evolution of Gucci”, CR, 26 March 2019, https://www.crfashionbook.com/fashion/a26934683/evolution-
gucci-designer/, accessed September 2020.
30
Funding Universe, “Gucci Group N.V. History”, http://www.fundinguniverse.com/company-histories/gucci-group-n-v-history/,
accessed September 2020.
31
Vikram Alexei Kansara, “Why Did PPR Change Its Name to Kering?”, BOF, 3 April 2013,
https://www.businessoffashion.com/articles/intelligence/why-did-ppr-change-its-name-to-kering, accessed September 2020.
32
Business Wire, “Kering: 2019 Full-year Results”, 12 February 2020,
https://www.businesswire.com/news/home/20200211006173/en/Kering-2019-Full-year-Results, accessed September 2020.
33
Kering Annual Report 2019, https://www.kering.com/en/finance/publications/, accessed September 200.
34
Tim Jackson and Carmen Haid (2002), “Gucci Group - The New Family of
Luxury Brands”, International Journal of New Product Development and Innovation Management, 4 (2). pp. 161-172,
https://ualresearchonline.arts.ac.uk/id/eprint/970/1/Guccigroup.pdf, accessed September 2020.
35
Ibid.
36
Ibid.
37
Julia Marzovilla, “Gucci’s History Is Just as Wild as Some of Its Designs”, InStyle, 29 July 2020,
https://www.instyle.com/fashion/history-of-gucci, accessed September 2020.
38
Emma Hope Allwood, “Frida Giannini’s Gucci legacy”, Dazed, 15 December 2014,
https://www.dazeddigital.com/fashion/article/22916/1/frida-giannini-s-gucci-legacy, accessed September 2020.
39
Alessandro Masetti, “The Gucci-Frida Affaire: We All Loved Each Other So Much, or Maybe Not”, The Fashion Commentator, 23
December 2014, https://www.thefashioncommentator.com/2014/12/the-gucci-frida-affaire.html, accessed September 2020.
40
Claer Barrett and Elizabeth Paton, “Gucci Fails to Bag Sales Growth”, Financial Times, 17 February 2015,
https://www.ft.com/content/b8b0e994-b671-11e4-95dc-00144feab7de, accessed September 2020.
41
Ankita Varma, “Gucci Chief Executive Marco Bizzarri Credited for Remodelling the Italian Fashion Brand”, The Straits Times, 9
March 2017, https://www.straitstimes.com/lifestyle/fashion/makeover-maven, accessed September 2020.
42
Alan Philips, “Gucci: the Reinvention of a Super Brand”, 9 April 2018, https://medium.com/@alan_46156/gucci-the-reinvention-of-
a-superbrand-dcff90717772, accessed September 2020.
43
Chantal Fernandez and Hannah Crump, “Decoding Gucci’s Merchandising Success “, The Business of Fashion, September 2019,
https://www.businessoffashion.com/...before, accessed September 2020.
44
Kering Annual Report 2016, https://www.kering.com/en/finance/publications/, accessed September 2020.
45
Marc Bain, “Gucci Has a “Shadow Committee” of Millennial Advisors”, Quartz, 26 October 2017, https://qz.com/1111798/gucci-has-
a-shadow-committee-of-millennial-advisors/, accessed September 2020.
46
Zak Maoui, “Gender Fluid Fashion is the Future. Here's How Menswear is Changing”, GQ, 27 November 2018, https://www.gq-
magazine.co.uk/article/gender-fluid-clothing, accessed September 2020.
47
Florine Eppe Beauloye, “When Streetwear and Social Media Hype Win over Luxury Fashion”, Luxe Digital,
https://luxe.digital/business/digital-luxury-reports/when-streetwear-and-social-media-hype-win-over-luxury-fashion/, accessed
September 2020.

26/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

48
Pamela N. Danziger, “Gucci's Cracked The Luxury Code With Millennials, Thanks To Its Dream Team Of Bizzarri And Michele”,
Forbes, 16 November 2017, https://www.forbes.com/sites/pamdanziger/2017/11/16/guccis-cracked-the-luxury-code-with-millennials-
thanks-to-its-dream-team-of-bizzarri-and-michele/#495738671523, accessed September 2020.
49
Alan Philips, “Gucci: the Reinvention of a Super Brand”, 9 April 2018, https://medium.com/@alan_46156/gucci-the-reinvention-of-
a-superbrand-dcff90717772, accessed September 2020.
50
Dominic-Madori Davis, “Louis Vuitton and Gucci are the Only 2 Luxury Companies to Consistently Rank among the World's Most
Valuable Brands for the last 20 Years”, Business Insider, 24 January, 2020, https://www.businessinsider.com/how-gucci-louis-vuitton-
became-two-most-valuable-luxury-brands-2020-01, accessed August 2020.
51
Alan Philips, “Gucci: the Reinvention of a Super Brand”, 9 April 2018, https://medium.com/@alan_46156/gucci-the-reinvention-of-
a-superbrand-dcff90717772, accessed September 2020.
52
Stephanie Chan, “Gucci Going Fur-Free Starting with Spring 2018 Season”, The Hollywood Reporter, 10 November 2017,
https://www.hollywoodreporter.com/news/gucci-going-fur-free-starting-spring-2018-season-1047808, accessed September 2020.
53
Bia Bezamat, ‘Gucci Launches Online Platform to Promote Sustainable Purpose”, Current daily, 6 June 2018,
https://thecurrentdaily.com/2018/06/06/gucci-equilibrium-platform-sustainable-purpose/, accessed September 2020.
54
Kering, “24 New Companies Join the Fashion Pact”, 25 October 2019, https://www.kering.com/en/news/24-new-companies-join-the-
fashion-pact, accessed September 2020.
55
Luxury Highlights, “Engaging a New Generation”, February 2018, https://www.luxury-highlights.com/article/engaging-a-new-
generation/, accessed September 2020.
56
Steff Yotka, “Exclusive: Gucci Collaborates with Artists on an Instagram Initiative”, Vogue, 28 October 2015,
https://www.vogue.com/article/gucci-gram-instagram-project, accessed September 2020.
57
Kimberly Ong, “Gucci: Old World Luxury Meets Digital Marketing”, 8 April 2017, https://medium.com/rta902/gucci-old-world-
luxury-meets-digital-marketing-e427df076bc7, accessed September 2020.
58
Lauren Alexis Fisher, “High Fashion Memes Are Now a Thing Thanks to Gucci”, Harper’s Bazaar, 17 March 2017,
https://www.harpersbazaar.com/fashion/designers/news/a21477/gucci-memes/, accessed September 2020.
59
Statista, “Leading Luxury Brands with the Most Followers on Instagram”, https://www.statista.com/statistics/483753/leading-luxury-
brands-instagram-followers/; and Statista, “Leading Luxury Brands with the Most Followers on Facebook”,
https://www.statista.com/statistics/693747/luxury-brands-follower-facebook/, accessed September 2020.
60
Trackalytics, “Gucci Twitter Followers”, https://www.trackalytics.com/twitter/profile/gucci/, accessed September 2020.
61
Luxury Highlights, “Engaging a New Generation”, February 2018, https://www.luxury-highlights.com/article/engaging-a-new-
generation/, accessed September 2020.
62
Ankita Varma, “Gucci Chief Executive Marco Bizzarri Credited for Remodelling the Italian Fashion Brand”, The Straits Times, 9
March 2017, https://www.straitstimes.com/lifestyle/fashion/makeover-maven, accessed September 2020.
63
Moni, “The Digital Strategy Driving Gucci’s Growth”, https://www.monigroup.com/article/digital-strategy-driving-guccis-growth,
accessed September 2002.
64
Ankita Varma, “Gucci Chief Executive Marco Bizzarri Credited for Remodelling the Italian Fashion Brand”, The Straits Times, 9
March 2017, https://www.straitstimes.com/lifestyle/fashion/makeover-maven, accessed September 2020.
65
Pamela N. Danziger, “Gucci's Cracked The Luxury Code With Millennials, Thanks To Its Dream Team Of Bizzarri And Michele”,
Forbes, 16 November 2017, https://www.forbes.com/sites/pamdanziger/2017/11/16/guccis-cracked-the-luxury-code-with-millennials-
thanks-to-its-dream-team-of-bizzarri-and-michele/#495738671523, accessed September 2020.
66
Ibid.
67
Kering Activity Report 2019, https://www.kering.com/en/finance/publications/, accessed September 2020.
68
Ibid.
69
World Footwear, “Gucci's New Strategy to Connect with Millennials”, 1 May 2019, https://www.worldfootwear.com/news/guccis-
new-strategy-to-connect-with-millennials-/3792.html, accessed September 2020.
70
Brian Baskin, “Gucci Plants Its Flag in Soho “, BOF, 5 May 2018, https://www.businessoffashion.com/articles/bof-exclusive/gucci-
plants-its-flag-in-soho, accessed September 2020.
71
CPP-Luxury, “Gucci Opens New Store Concept in Soho, New York”, 6 May 2018, https://cpp-luxury.com/gucci-opens-new-store-
concept-in-soho-new-york/, accessed September 2020.
72
Kering Annual Report 2019, https://www.kering.com/en/finance/publications/, accessed September 2020.
73
CPP-Luxury, “Gucci Opens New Store Concept in Soho, New York”, 6 May 2018, https://cpp-luxury.com/gucci-opens-new-store-
concept-in-soho-new-york/, accessed September 2020.
74
Ankita Varma, “Gucci Chief Executive Marco Bizzarri Credited for Remodelling the Italian Fashion Brand”, The Straits Times, 9
March 2017, https://www.straitstimes.com/lifestyle/fashion/makeover-maven, accessed September 2020.
75
Hilary George-Parkin, “Why Gucci, Louis Vuitton & Other Luxury Brands Are Betting Big on Airport Retail”, Yahoo Lifestyle, 28
March 2019, https://sg.style.yahoo.com/why-gucci-louis-vuitton-other-181425572.html, accessed September 2020.
76
CEO Magazine, “Gucci is the Leading Luxury Brand Online”, 12 October 2018,
https://www.theceomagazine.com/lifestyle/fashion/gucci-leading-luxury-brand-online/, accessed September 2020.
77
Alyssa Kelly, “Get Your Holiday Shopping Done at Gucci’s Immersive New Pop-up”, CR, 6 November 2019,
https://www.crfashionbook.com/..., accessed September 2020.
78
MDS, “Gucci Pin: New Popup Concept to Hit Paris, Seoul and Hong Kong “, 15 November 2019,
https://www.themds.com/companies/gucci-pin-new-popup-concept-to-hit-paris-seoul-and-hong-kong.html, accessed September 2020.
79
Chantal Fernandez and Hannah Crump, “Decoding Gucci’s Merchandising Success “, The Business of Fashion, September 2019,
https://www.businessoffashion.com/..., accessed September 2020.
80
Ibid.
81
Kering Annual Report 2019, https://www.kering.com/en/finance/publications/, accessed September 2020.
82
The New Indian Express, “Passion, Poetry Come Together in Gucci's Foray into Haute Jewellery”, 7 September 2019,
https://www.newindianexpress.com/magazine/2019/sep/08/passion-poetry-come-together-in-guccis-foray-into-haute-jewellery-
2029709.html, accessed September 2020.
83
Pascale Denis, “Kering Crown Jewel Gucci Banks on High-End Gems for Growth”, Reuters, 3 July 2019,
https://www.reuters.com/..., accessed September 2020.
27/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.
 For the exclusive use of J. Muschel, 2024.

SMU-21-0005 Gucci: Staying Relevant in Luxury over a Century

84
Allison Collins, “In First Month, Gucci Sold More Than 1 Million Lipsticks”, WWD, 4 September 2019, https://wwd.com/beauty-
industry-news/beauty-features/in-first-month-gucci-sold-more-than-1-million-lipsticks-1203252223/, accessed September 2020.
85
Dale Arden Chong, “Gucci Launches First Gender-Neutral Perfume”, Fashion United, 1 August 2019,
https://fashionunited.uk/news/fashion/gucci-launches-first-gender-neutral-perfume/2019080144553, accessed September 2020.
86
Dominique Muret, “Gucci Remains Kering’s Main Cash Generator in 2018”, Fashion Network, 13 February 2019,
https://ww.fashionnetwork.com/news/Gucci-remains-kering-s-main-cash-generator-in-2018,1067311.html, accessed September 2020.
87
Kering First Half Results 2020, https://www.kering.com/en/finance/publications/, accessed September 2020.
88
Kering First Half Results 2020, https://www.kering.com/en/finance/publications/, accessed September 2020
89
McKinsey & Company, “Consumer Sentiment and Behavior Continue to Reflect the Uncertainty of the COVID-19 Crisis”, 8 July
2020, https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/a-global-view-of-how-consumer-behavior-is-
changing-amid-covid-19, accessed September 2020.
90
Bain & Company, “Global Personal Luxury Goods Market Set to Contract between 20 - 35 Percent in 2020”, 7 May 2020,
https://www.bain.com/about/media-center/press-releases/2020/spring-luxury-report/, accessed September 2020.
91
Luisa Zargani, “Marco Bizzarri on Possible Post-Coronavirus Scenarios, Supporting Creativity”, WWD, 26 March 2020,
https://wwd.com/fashion-news/designer-luxury/marco-bizzarri-on-possible-post-coronavirus-scenarios-supporting-creativity-
1203547920/, accessed September 2020.
92
McKinsey & Company, “Consumer Sentiment and Behavior Continue to Reflect the Uncertainty of the COVID-19 Crisis”, 8 July
2020, https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/a-global-view-of-how-consumer-behavior-is-
changing-amid-covid-19, accessed September 2020.

28/28

This document is authorized for use only by Jeremy Muschel in Integrated Marketing taught by Ellene Hu, New York University from Sep 2024 to Dec 2024.