Gucci is one of the winners among the top 100 power luxury brands when the global luxury market has grown at a staggering pace for many years until recently. In 2017, Gucci's increased its sales to Euro 6.2 billion by 44.6% over the year 2016.
Like the other luxury brands, however, Gucci faces serious challenges in the years ahead. Brands must demonstrate that more than just making money, they need to promote sustainability, ethical business practices, and to embrace millennial-focused business models so that they can stand out. In October 2017, Gucci made their fur-free commitment and announced to cease releasing fur product beginning with its spring 2018 collection to reduce its impact on animals and the environment.
Purpose is key. Gucci needs to fulfil its fur-free promise and at the same time to keep its top brand image and leading marketing position in terms of revenue and profit, therefore I conducted thorough research in order to develop a proprietary cause marketing campaign. The research adopted a deductive approach for a combined method strategy consists of case study and archival research. The data collected were mainly quantitative, some secondary qualitative data were used, too.
Based on the research results, I am proposing a plan to launch a one-year global campaign #GucciFurNotCool! This campaign aims to convene, unite and strengthen the voices of millennials speaking out for fur-free trade to raise public awareness for animal protection by using innovative approaches combined offline and online activities. Through this campaign, Gucci will be the first luxury brand continuously spreading positive values against animal killing and fur selling. The millennials who get involved in this movement will continue to be Gucci’s loyal customers. By building up a long-term partnership with NGOs like PETA and with social media giants etc. Gucci aims to attract more brands to follow up its movement and together to significantly decrease animal killing by the year of 2025.
II. Introduction
A. Gucci Business
Founded by Italian Guccio Gucci in Florence in 1921, Gucci quickly become one of the most well-known luxury brand of fashion and leather goods. Now Gucci is part of the Kering Group, a world leader in apparel and accessories that owns a portfolio of powerful luxury and sport and lifestyle brands.
At the beginning of 2015, Gucci started a new chapter in its history, under the direction of a new management team led by President and CEO Marco Bizzarri and Creative Director Alessandro Michele. They created a new contemporary vision, it made the brand rapidly re-establishing its reputation as one of the world’s most influential luxury fashion brands.
Gucci invented a wholly modern approach to fashion-electric, romantic, and above all contemporary, and, in doing so, successfully redefined luxury for the 21st century. The new aesthetic vision, combined with a progressive business leadership, has led to outstanding performances across all categories and regions, confirming the establishment of a unique and compelling brand positioning and narrative that is engaging with a wide luxury customer base across various nationalities and demographics.
The driving force behind Gucci’s reinvention is to be found in a new, contemporary corporate culture of employee empowerment and open communication, built on key values, which feed into the whole organization through the empowerment of innovation and risk-taking, a sense of responsibility and respect, an appreciation for diversity and inclusion, and excellence in execution.
Gucci products continue to represent the pinnacle of Italian craftsmanship and are unsurpassed in terms of their quality and attention to details.
B. Gucci Community
Gucci ranked 41st in position in 2009 'Top Global 100 Brands' by Interbrand with about €4.2 billion in revenue worldwide in 2008 according to BusinessWeek, while in 2018 it climbed to number 5. Today Gucci operates about 529 directly operated stores around the globe in 2017, and it wholesales its products through franchisees and upscale department stores.
After many years staggerating revenue and profit, Gucci's sales grew to Euro 6.2 billion by 44.6% over the previous year. And in the first quarter of 2018, the brand posted nearly $2.2 billion in sales revenue, up 48.7% compared to the same period last year.
Gucci products are sold exclusively through a network of 529 directly operated boutiques, a directly operated online store(in30 markets), a limited number of franchises, and selected department and specialty stores.
At the end of the year 2017, Gucci retail sales represented approximately 85% of the brand’s total revenue.
Demographic Segmentation
Demographically, Gucci produces brands for male and female, children and adults respectively. Their brands are for the category of male and female who love the desire to impress others, have a high social class and strong financial base. But basically female purchase more than male. Those who love the brand are driven by the kind of lifestyle they live and the need to maintain that lifestyle (Gucci.com, 2010).
Recent years, Gucci adjusted their policy to target more on millennials, i.e. the young people below age 35. According to Fast Company, Gucci CEO Marco Bizzarri's partnership with famed Harlem tailor Dapper Dan has helped transform the Gucci brand for a new generation of luxury consumers: the hip-hop crowd. Gucci's name has been used in lyrics by artists including Pusha T and 2 Chainz, which have likely influenced millennial demand.
To win with millennial consumers, Gucci understands what millennials value: personal satisfaction and purpose. Gucci’s relationship with millennials is more powerful than any other luxury brand’s and it has simultaneously brought back many of its loyal customers.
“Digital has changed the rules of the game. The digital scene is not an option – you have to be part of it,” Bizzarri explains. “As Millennials make up almost half of Gucci’s consumer base, it was vital for the brand to embrace digital communication and connect with this new, large and up-and-coming consumer group.” Gucci develops stylish e-commerce site, customer service, shoppable features, and online advertising, as well as the brand’s visibility on third-party e-commerce sites which underlined that Gucci’s interactions on social media doubled between 2016 and 2017.
In 2017, Gucci’s e-commerce sales rose by 86 percent. Millennials accounted for about 50 percent of revenues. Total Gucci brand sales increased by 42% percent to Euro6.2 billion.
The growth reflected synergies from the brand’s reinvention of millennial customers (know as “geek-chic”) and its online experience.
Gucci's omnichannel integration of its online and in-store brand experience helped it win L2’s Digital IQ Index: Fashion US in both 2016 and 2017.
Socioeconomic Segmentation
Gucci brand does not consider the economy class or the middle class; thus an inefficient utilization of the market population, as the market lies in this category of consumer. Focusing more on millennials who are 20-36 ages now, Gucci knows the importance of connecting with the Millennials, as they will be shaping the consumption patterns over the coming decades and soon move into their prime spending years.
Geographic Segmentation
Gucci is very conscious of the countries it locate its brands considering the fact that they are exclusive and of great quality.
Gucci operates in very few countries in America and Europe whose consumer behaviour is unique in terms of quality. For example,France populace are willing to pay more for quality. In recent times, Gucci has spread to France, Germany and Belgium (Gucci.com 2010).
Gucci's geographical segmentation is poorly structured as it tends to ignore developing countries and emerging markets.
C.Overview ofGucci’s current corporate social responsibility
Culture of Purpose
Gucci Equilibrium, is a collection of their values, positive instincts and ambitions. It’s a balance of the aesthetics of the things we produce with the ethics in which they believe. Gucci claims they are driven by their Culture of Purpose.
Sustainability for Gucci
Gucci considers sustainability to be the engine of a process of continuous improvement that contributes to the strengthening of economic performance and the control and mitigation of business risks. A responsible attitude towards people, the land, the environment and the community has always been part of Gucci’s value system, in addition to superior craftsmanship, quality and Italian-made products.
In this scenario, Gucci believes it is necessary to sustain and promote, within the company, along the supply chain and in the organisational and marketing process, a business growth model that combines excellent craftsmanship with the creation of ‘Sustainable Value’, that goes beyond the fundamental principle of compliance with every International Convention, Directive, Law, Regulation and/or applicable law and takes into account the economic, environmental and social interests of all stakeholders.
Gucci’s guiding principles
In line with its mission, code of conduct and the code of conduct of the Kering Group, Gucci is committed to implementing a Culture of Sustainability and to raising awareness within the Gucci system, i.e. amongst all parties with a legitimate interest in and/or who are affected by its activities: employees, shareholders, customers, suppliers, sub-contractors, commercial and financial partners, local communities, institutions, NGOs, trade associations and trade unions, thereby promoting a Policy that values the following principles:
Business ethics
Respect for human rights
Promotion of a quality working environment through:
employment standards
the protection and promotion of health and safety
people’s welfare
the development of professional skills
the promotion of diversity
Contribution to socio-economic development
Supplier involvement
Customer care
Protection of the environment: Gucci believes that the commitment to the reduction of environmental impact and the protection of ecosystems and biodiversity are not only fundamental to the preservation of the planet and its inhabitants, present and future, but are also needed to ensure competitiveness, risk reduction and the further development of the business.
Gucci is committed to:
reducing the environmental impact of its business operations with a special focus on the use of energy and water, waste production, hazardous chemicals and the sustainability of raw materials;
identifying and assessing both direct and indirect social and economic environmental impact along the entire supply chain and promoting within its own spheres of influence actions for the improvement and development of support for people and their environment.
Relations with stakeholders
with regard to all of its Stakeholders Gucci is committed to: developing and pursuing a dialogue with its stakeholders based on fairness and transparency, in the belief that they represent a key asset of the company which should be promoted and developed;
joining initiatives or signing agreements for collaboration, cooperation and partnership with public and private organisations on the issue of sustainable development at local, national and international level.
Fur-free Announcement
Gucci announced a commitment to going fur-free on Oct 2017 that they will cease releasing fur product beginning with its spring 2018 collection and will continue to be supported by the Humane Society of the U.S. and LAV in 'identifying and reducing its impact on animals and the environment.'
To be clear, the definition of 'animal fur' by which Gucci is subscribing means 'any animal skin, or part thereof, with hair or fur fibers attached thereto, either in its raw or processed state or the pelt of any animal killed for the animal’s fur.' That means mink, fox, rabbit, karakul lamb and raccoon dog are off limits, while lamb, goat and alpaca can still be used.
Gucci’s president said the evolutions “demonstrate our absolute commitment to making sustainability an intrinsic part of our business”.
III. Research methods used in the study
A. Description and rationale of research methodologies
B. Research Process
IV. Findings and conclusions of the study
A.Findings
“Fur Free” Luxury Brand List far too short
Gucci's new fur free policy marks a game-changer for the whole luxury fashion industry to follow.
According to the PETA twitter information, there are only 18 brands have banned fur.
Youth don’t think wearing fur is cool
According to a 1,025-person survey of 18- to 34-year-olds, which asked respondents if they were comfortable wearing fur, 66% of millennials say they aren’t comfortable wearing it.
The survey employed by Mic.com, 70% of millennials say they wouldn’t buy a new clothing item made with fur.
Digital marketing matters
McKinsey reported that 80% of luxury sales are now influenced by online.
This is a staggering figure, and clearly highlights the important role digital now plays within a luxury purchase. It might be surprising, then, to know that digital revenue at the majority of luxury brands still contributes little in comparison to other sales channels.
It is now time for luxury brands to fully embrace digital.
Collectively millennials and Generation Z will represent more than 40 percent of the overall luxury goods market by 2025, compared with around 30% in 2016.
Unlike Baby Boomers, many millennial luxury consumers expect to interact with brands across a range of digital platforms, rather than only through traditional channels.
The future success of the industry will depend on its success in permeating and proactively reaching out to the younger generation. Luxury brands previously viewed social media as “mass market”, but today it has become an increasingly important marketing tool for them. The biggest challenge for luxury brands will be to make optimum use of social media without compromising their brand values. The success of a social media strategy will be converting “likes” into an interactive and engaging experience for customers.
B.Conclusions based on the findings
Based on all of the research conducted, it is clear that although Gucci has created a domino effect, a dozen of brands are not joining the anti animal killing movement, but still most of the other brands and companies are not ready to go fur free. Gucci needs to work more to help the world increasing awareness of anti animal killing.
As the luxury brand leader in terms either revenue, profit and corporate social responsibilities, Gucci is one of the best practice of embracing digital and thus beloved by millennials and generation Z. Young people and young designers don’t think wearing fur is cool and they are the power to promote awareness to stop killing animals globally.
V. Proposed strategic plan
Therefore, I am planning to initiate a one year global #GucciFurNotCool! Campaign.
By doing this, Gucci will be the first luxury brand showing a leading position by continuously spreading positive values against animal killing and fur selling.
A. Objectives and rationale of the proposed strategic plan
#GucciFurNotCool! Campaign aims to:
convene, unite and strengthen the voices of millennials speaking out for fur-free trade to raise public awareness for animal protection by using innovative approaches combined offline and online activities.
to influence more brands to join its movement, and together decrease animal killing significantly by the year of 2025.
Gucci will build up a long-term partnership with a non-profit organization like PETA and with social media giants etc. Gucci aims build up the brand image, popularity, and customer preference among the younger generations - the Millennials in a long term perspective.
B. Proposed activities and timelines
This campaign will be last for 1 years globally, especially in North American and Asian countries such as Canada, US, China and Japan. These are area where most fur products are consumed or most of the animals are killed for brands. Focusing on these areas will more effectively increase the public awareness addressing anti-fur selling and anti-animal killing.
The campaign consists a series of activities, events and challenges, they are all part of one single movement -Gucci’s Fur Free movement. Gucci will invite young people to get actively involved into these activities.