Can Gucci Still Be So Popular In The Next 3 Years? Is There Any New Strategy For LV?

Online shopping and young people will become the market that LV and Gucci must contend for.

Last October, in order to continue to consolidate luxury bags,

Leading position, LVMH group has again bought a takeover, with a total value of about 6.4 billion euros to acquire 80% of Germany's senior leather goods and suitcase manufacturer RIMOWA.

This is the first acquisition of German brand by LVMH group.

RIMOWA is a potential competitor of LVMH group's LV. It is obvious that LVMH will not sit idly by and compete against LV for any brand. The practice is to buy it directly. Now, Bernard Arnault's early attack and acquisition of the failed brand Gucci has become the most troublesome rival of LV.

Just half a month after Gucci's online service in China was launched, LV also launched online shopping service with its official website, showing the fierce competition between them.

Today, people who control luxury and fashion have already changed dramatically. The millennial generation is gradually becoming the main force of new fashion consumption. If luxury brands ignore the existence of this crowd, it will be hard to arouse the attention of the crowd in the future, and then miss the market or even the brand is marginalized.

The design of Gucci has been successful, attracting the millennial generation who likes freshness.

Some analysts pointed out that the world's richest population is getting younger and younger, and the consumption power of this generation is expanding rapidly. The degree of brand digitalization has become an important factor in attracting them to buy.

Now, Gucci is attracting new generation consumers through various ways, such as brand digitalization, product diversity and Creative Story marketing.

In fact, Marco Bizzarri and Alessandro Michele, the golden combination of luxury industry, completely let Gucci turn over another weapon is the thorough digital strategy.

From the endless number of digital creativity and artists' cooperation projects to the global expansion of online business, Gucci constantly let digital penetration in every level of creativity, marketing and information dissemination.

In its 2016 earnings report, Kai Yun group disclosed that Gucci's digital creative investment will account for 35% of total marketing expenditure.

Facts have also proved that the return on marketing expenses is also considerable.

In the first quarter of fiscal year 2017, the growth rate of Gucci for the first time exceeded that of Saint Laurent, another brand of the parent company's Open Cloud group. In the same quarter, its revenue surged 51% to 1 billion 354 million euros, an increase of 48.3% over the same period last year, the strongest growth in 20 years.

Data show that LV parent company LVMH group last year accounted for only 5% of the total net sales of about 2 billion euros, apparently can not meet the ambitions of LVMH boss Bernard Arnault.

After a series of preparations, LVMH group started its efforts in the field of electricity business this year, launching an e-commerce website with more than 150 luxury brands, 24 S vres.

But for the huge LVMH, the digital turn is still difficult.

One industry consultant told Reuters that another obstacle to the digital pformation of luxury brands is some stubborn and conservative industry executives. Some of them still use LVMH to answer e-mails by secretaries. "How can you keep them as a priority development platform for such conservative people?"

For the LVMH group, the decentralized structure mentioned earlier is also partly responsible for the slow progress of its digitalization. Its brands have different attitudes towards digital pformation.

Some managers believe that once the brand is identified on the official website, each item will be stored in stores, which may lead to a decrease in the number of stores.

Because consumers will have to go to the store to know if they want to have the goods, and once they know that they are out of stock, they will not ask the store, which will reduce their chances of buying other products.

Up to now, the Internet penetration of LVMH group's brands is uneven, and brands still have great room for development in the digital field. It is still unknown how the group will overcome various obstacles to enhance the overall digitalization process.

Nathalie Remy, partner of McKinsey consultancy, says the problem is no longer the case.

Whether it should enter the digital field, but how to enter.

This is another difficult choice for Bernard Arnault.

However, LV is seeking new solutions and becoming young.

At the fashion show in September last year, Nicolas Ghesqui re, LV's brand creative director, made further attempts for younger technology and technology integration. The first launch of the mobile shell challenge "It Bag" market is gaining more and more attention from the millennial generation.

The cooperation between LV and Supreme also caters to the tastes of the millennials and is also activating the young people's market.

In the first half of this year's earnings report, Bernard Arnault also pointed out that LV's LV x KOONS and LV x Supreme jointly launched this year have received a positive market reaction, which greatly enhanced the exposure and influence of the brand in social media, and made a great contribution to the growth of brand performance.

Due to the success of these cooperation series, Bernard Arnault believes that such cooperation strategy is safe.

Industry can predict

There may be more cooperation with other brands in the future.

How long does it take for Gucci to catch up with LV? If idealized by the average quarterly growth rate in the past 2 years, Gucci will surpass LV to become the highest income luxury brand in about 3 to 4 years, but the question is, will Gucci still be able to keep up with the growth of 25% in Gaoping in the next 3 years?

Some analysts have pointed out that perhaps Gucci can not take the place of LV as the first luxury brand in a short period of time, but the fashion industry is full of variables all the time. Tradition and rules will be overthrown at any time and win the brand of young consumers is the real industry leader. The rise of Gucci has brought more inspiration to the industry.

Brand value depends on products, so product design reform is very important in the whole brand remodeling. Now more and more consumers, especially young consumers, return to Gucci shops.

More attention should be paid to the world clothing shoes and hats net.