What Made Gucci Famous? An Analysis of the Gucci Brand

What Made Gucci Famous? An Analysis of the Gucci Brand

1960s Gucci logo; interlocking-G logo

Gucci Brand History 

● Overview 

The brand Gucci is a subsidiary type of company of the French luxury group, Kering, belongs to the fashion industry, which was founded in 1921 (101 years ago) by Guccio Gucci in Florence, Tuscany, Italy; it conducts both in store and online selling strategies through more than 487 stores and website: www.gucci.com. Moreover, in recent years, its product lines have developed fully, including handbags, ready-to-wear, footwear, and accessories, makeup, fragrances, and home decoration. 

● 1921 

Guccio Gucci opened a leather goods store on Via Vigna Nuova in Florence, which mainly consisted of products such as fine saddles and equestrian accessories. The designing patterns used in that period of time remained until today. 

● 1935 

A woven hemp from Naples replaced leathers serving as a main material in Gucci’s designs due to the shortage of leather. This year was a big year for Gucci because the brand’s first print was created – a series of interconnecting dark brown diamonds on a tan background. ● 1938 

Establishing and strengthening Gucci was not only Guccio’s job, but also his three sons, Aldo Vasco, and Rodolfo, joined the team. Successfully expanding the brand to Rome with a store on Via Condotti, Guccio’s sons played indispensable roles. 

Guccio Gucci c. 1940

● 1947 

Due to lack of materials after World War II, pigskin came to use; later, the well-known Bamboo bag was invented. Treated Japanese bamboo handles became the first patented design of Gucci brand.

● 1951-1955 

In 1951, Guccio opened the first store in Milan, and the green-red-green web became the hallmark. In 1953, the iconic Gucci horse bit loafer was introduced shortly after opening the first New York boutique. Due to the store in New York, Gucci suddenly became a world-wide popular brand and flourished not only in the United States, but also in many other countries. Its design gained high profile fans including Elizabeth Taylor, Grace Kelly and Jackie Kennedy. Unfortunately, in the same year, Guccio Gucci passed away aged 72. In 1955, the GG house crest became a registered trademark and used largely on accessories and clothing. ● 1961-1975 

Aldo Gucci in Rome, 1964

These years, Gucci smartly borrowed the popularity from celebrities to continually increase its own brand influence. In 1961, Gucci handbag was immediately renamed the ‘Jackie’ due to Jackie Kennedy being spotted carrying a slouchy. After this action, Gucci gained household name status for the brand. In 1966, the Flora scarf was designed for Princess Grace of Monaco. In 1975, the first Gucci fragrance, Gucci No. 1 by Guy Robert, was launched. ● 1981-1989 

Gucci is a family business industry. Inevitably, family infighting, poor management, and accusations of tax evasion largely affect the company’s reputation and profits. However, Gucci tried to change this situation. In 1981, Gucci increasing use of the Flora print to achieve great success debuted its first ready-to-wear collection at the Sala Bianca. In 1982, Rodolfo Gucci assumed leadership of the company, but just one year later, he died and passed the mantle to his son Maurizio. Furthermore, in 1985, the Gucci loafer became part of the Metropolitan Museum of the Art’s permanent collection, which again increased its popularity. In 1989, Dawn Mello, formerly the president of Bergdorf Goodman, was appointed creative director in Gucci. In the meantime, Richard Lambertson and Neil Barrett came with her also serving as design director and men’s ready-to-wear designer. A 50% stake in the company is acquired by holding company Investcorp. 

● 1990-1995 

In 1990, Tom Ford took the women’s ready-to-wear designer position. In 1993, Maurizio Gucci ended the family’s involvement with the brand by selling his shares to Investcorp. Then, in 1994, Dawn Mello returned to Bergdorf Goodman; hence, Tom Ford replaces her as creative director, transforming the brand’s fortunes because he created something novel, collections with an overt sex appeal and glamour, which were not seen at any other contemporary high fashion houses. In 1995, Domenico De Sole became CEO of the Gucci Group, using a series of franchises, licenses and sub-brands in-house to reverse a decade of overexposure. ● 2001-2009 

Gucci encountered a large personnel transfer. “Pinault Printemps Redoute fights off LVMH to acquire a controlling share in Gucci. De Sole and Tom Ford depart after failing to agree terms with PPR. Ford is replaced by Alessandra Facchinetti. Robert Polet, formerly of Unilever, becomes CEO of Gucci Group while Mark Lee, CEO of Yves Saint Laurent, becomes brand chief. After two forgettable seasons Facchinetti leaves and Frida Giannini, director of handbags and accessories at Gucci since 2002, is promoted to the top job. Gucci signs a long-term licensing agreement with P&G for the production and distribution of fragrances. As of 2020, Gucci now counts more than 60 scents in its portfolio. In 2007, the brand’s first television ad campaign, directed by David Lynch to promote the Gucci by Gucci fragrance, airs. In 2009, Patrizio di Marco joined from Bottega Veneta, succeeding Mark Lee as Gucci president and CEO” (Haute History).

● 2010-2020 

This decade was relatively stable and increased its sales continually. In 2010, Gucci Playground launched which is an iPad application about childrenswear. And, in 2011, Gucci celebrated its 90th birthday, and all famous products were shown. In 2015, Alessandro Michele, working at Gucci for more than 10 years was promoted as Giannini’s replacement. He announced changes for Giannini’s final menswear collection five days before the AW15 show. Later, he debuted a women’s wear collection to solidify this forward-thinking brand. In 2017, with Michele’s new direction, there was an 11% increase in sales for parent company Kering. Furthermore, in 2020, due to coronavirus, Gucci shutted down traditional fashion weeks and shortened the show performances from five to two shows per year. In this year, Gucci house presented its collection in a 12-hour live stream called Epilogue

● 2021-2022 (recent movements) 

Gucci in 2021 announced that they will go to a physical show again shortly because the pandemic is almost over. Gucci will have a runway show in late spring 2022 and in September 2022 for ready-to-wear week, according to notes from the house. “Since their last runway show, Gucci has done digital presentations and events around the world like sit down dinners and the ‘Gucci Love Parade’ that was showcased on Hollywood Boulevard in Los Angeles earlier this month”(Forbes).

Business Development 

As a subsidiary of the parent company Kering, Gucci performs the best compared with other subsides. According to the data released in February 2022 provided by Statista, shown below as a graph, in recent years, Gucci has grown a lot since 2017. However, there was a decrease 

from 2019 to 2020 due to the pandemic. However, Gucci’s sales reached the peak again in 2021. In 2021, Kering’s Gucci brand generated a global revenue of about 9.73 billion euros.

To provide additional information of Gucci’s performances in 2021, analysis of Gucci’s revenue via products category is vital. According to the data released in February 2022 provided by Statista, shown below as a graph, 53% of sales are leather goods, 19% of sales are shoes, 15% are ready-to-wear, 6% are watches and jewelry, and 7% of sales are other products. Thus, leather goods played a dominant role in Gucci’s revenue.

Not only Gucci’s revenue continually increases, but also its brand value subsequently increases. According to the data (next page) released in may 2022 published by Brand Finance shown in Statista, from 2016 to 2022, the brand value increased dramatically. 

Although there was a decrease from 2020 to 2021 due to coronavirus, the brand value went back again in 2022 which reached the highest peak, 18110 millions of dollars.

Gucci Marketing Strategy : 4 P’s

Product Strategy —Diverse product portfolio in its marketing mix with great length, width and depth. —Contains handbags, shoes, ready to wear products, jewelry, watches and other accessories. —Products for men, women and children. —Great length in each of the product categories such as in handbags, it has totes, shoulder bags, backpacks, clutches, crossbody bags etc.
Price Strategy —The price of the apparels depends on the quality of fabric and the work done on the apparels. —The pricing strategy in its marketing mix includes all sorts of charges and expenses it incurs. —Prestigious pricing makes the product act as a status symbol. Even in other products Gucci follows premium pricing. —Offer discounts from time to time to enhance sales and keep their loyal
customers are happy.
Place & Distribution Strategy —Optimizing its existing network to drive organic growth and profits. —Operates in Europe, United states of America, Asia, Middle East, Australia. —Major business functions are merchandising, marketing and communication, store planning. —500+ directly operated stores, a directly operated online store which works in 25+ markets. —Limited number of franchises and selected departments and specialty stores through which they sell their products. —Stores with unique design are placed in expensive up street locations keeping in mind their clientele. —Visually appealing outlets which give a great, relaxing experience to the customers. —The services provided by the employees make the customers feel special and exclusive. —With the growing penetration of ecommerce websites, Gucci has spread its business via multi-brand online platforms as well.
Promotion & Advertising Strategy —Uses advertisements, banners, look books, social and print media —Features on various social media platforms like Facebook, Pinterest, YouTube, Instagram, Tumblr. —Hired various bloggers to promote their content on social media. —Gucci style app with 8 different languages. —Connects the past history of Gucci with the contemporary outlook of the customers. —Ad campaigns showcase contemporary designs focusing on the classy & young generation. —Excellent customer relationship services —Offers its client a repair service and also allows them to pre order items that are still under production.

Competitor Analysis 

As an international fashion brand, Gucci has mainly 13 competitors: Louis Vuitton, Armani, Prada, Bulgari, Versace, Chanel, Dolce & Gabbana, Balenciaga, Yves Saint Lauren, Burberry, Hémes, Christian Dior, and Ralph Lauren.

Brand NameProduct LineCompetitor NameProduct Line Why competitors?
Gucci 1) handbags, ready-to-wear, footwear, accessories, makeups, fragrances, and home decoration 2) online and offline platforms to sell its productsLouis Vuitton1) products for women and men. 2) category of leather goods, handbags, accessories, ready to wear, fragrance, and many more. 3) 50 countries: sold through many chains of stores, retailers, and online stores.1) have top designers in the world. 2) strong link with quality and their brand value
Conclusion for GucciIt follows the steps of fashion and makes innovative designs to meet the demand of the industry.Armani 1) famous for hand stitched cloth 2) custom-made apparel for its customer 3) online and offline selling1) Forbes listed the brand for the past 5 years. 2) great quality designer 3) strong tie with celebrity 4) positive feedback from customers
Prada 1) various products 2) more than 620 stores 3) involve in many shows to advertise1) Easy to reach 2) advertising strategy and branding through online and offline.
Bulgari 1) high quality products 2) target on women1) Focus on quality 2) through multiple online platforms
Versace 1) mainly leather accessories 1) Available
and ready-to-wear. 2) more than 200 outlets selling 3) platforms sellingthrough various channel 2) great number of loyal customer
Chanel 1) high quality and design 2)luxury goods, ready-to-wear, fashion accessories 3) more than 120 boutiques1) high brand value 2) high revenue] 3) easy to reach 4) great design 5) high quality
Dolce & Gabbana a1) design, production, and sale of great high-end clothing, latest fashion footwear, stylish watches, and highly fashionable accessories, jewelry, and leather goods. 2) consists of other products like eyewear, beauty products, and makeup products.1) a great brand image and loyal customers. 2) products through innovative measures and their products are unique. 3) suitable for many people
Balenciaga1) famous for handbags 2) easy to reach1) great customers 2) great design
Yves Saint Lauren1) Fragrance market and beauty products 2) cloth for men and women 3) mainly about women1) online and offline 2) easy to reach 3) great recognition of products
Burberry 1) various products 2) over 500 stores in 50 countries1) Strong brand value 2) creativity
Hémes 1) clothes, boots, watches, ties, jewelry, perfume, and many other fashion products1) Unique design 2) great designer 3) special marketing strategy
Christian Dior1) fashion accessories for men and women, makeup products, fragrance, skin care products, and many more. 2) 400 firms in the world1) strong visibility to customers 2) great product portfolio
Ralph Lauren1) production of clothing for men and women. 2)almost 493 directly-operated stores. 3) sold in multiple channels.1) great design 2) innovative products

Future Trends 

Talking about the future trend of one fashion company, looking at its history data and customers’ buying force is imperative. 

Historical data 

According to the data and graph found in the business development section, we can see a clear trend of increasing revenue each year. Gucci has a long history using celebrities’ popularity to further expose its products to the public, so with continuous great advertisements, I believe there will be an increasing trend of Gucci as long as there is no global pandemic or economic crisis. 

Customers’ buying force

According to the data released in february 2022 shown above, the global revenue share of Gucci in 2021 illustrates that 44% of sales coming from Asia, 27% of sales from North America, 17% of sales from western Europe, 6% of sales from Japan, and 6% of sales from the rest of the world. 

Clearly, we cannot negate the data from Asia because the total number is 50% which consists of half of Gucci selling data. Thus, in recent years, Gucci also changed its marketing strategy in order to satisfy customers’ needs. In recent years, Gucci designed special limited-edition cloth or bags for Asian customers.

Narita International Airport Terminal 2 “Gobangai” arcade

Plus, Gucci tries to understand many Asian countries’ cultures such as China. For instance, in China, they have special name calling for each year. The Chinese Zodiac plays a rotation of 12 years, so each animal matches one year. Lastly, in 2022, the year is what Chinese people called the Tiger year. Gucci gives VIP gifts such as red pockets, one tradition in Chinese New Year, with a tiger sign on it. In the meantime, they design special clothes for Chinese customers; plus, they provide unique advertisements for Chinese people in order to make them happy. 

In conclusion, with continually making Asian customers happy, I believe in the future, more and more customers will become part of Gucci’s buying force. Thus, the future of Gucci will be regarded and remain stable for further improvements.

Written by Katherine (Nuqian) Tang

What Made Gucci Famous? An Analysis of the Gucci Brand : References 

Back To News

How many luxury brands does LVMH own?

Brand Finance. (May 4, 2022). Brand value of Gucci worldwide from 2016 to 2022 (in million U.S. dollars) [Graph]. In Statista. Retrieved June 20, 2022, from https://www.statista.com/statistics/980720/gucci-brand-value-worldwide/ 

Kering. (February 17, 2022). Global revenue of the Kering Group from 2012 to 2021, by brand (in million euros) [Graph]. In Statista. Retrieved June 20, 2022, from https://www.statista.com/statistics/267476/global-revenue-of-the-kering-group-by-brand/ 

Kering. (February 17, 2022). Revenue share of Gucci worldwide in 2021, by product category [Graph]. In Statista. Retrieved June 20, 2022, from 

https://www.statista.com/statistics/267731/global-revenue-share-of-gucci-by-product-category/ 

Kering. (February 17, 2022). Global revenue share of Gucci in 2021, by region [Graph]. In Statista. Retrieved June 20, 2022, from 

https://www.statista.com/statistics/267733/global-revenue-share-of-gucci-by-region/ https://www.hautehistory.co.uk/gucci-timeline/house-history-the-gucci-timeline 

https://www.forbes.com/sites/allysonportee/2021/11/16/gucci-announces-that-it-will-go-physi cal-again-with-a-physical-show-in-three-months/?sh=104ff05ebec2

https://www.mbaskool.com/marketing-mix/products/17110-gucci.html

What Made Gucci Famous?