Gucci CEO Officially Declared War: It Will Replace LV As The Largest Luxury Brand.

After Hermes was pulled down, Gucci (thematic reading) formally declared war on Louis Vuitton.

According to Reuters, Gucci CEO Marco Bizzarri said the brand annual sales target was 10 billion euros, which means that Gucci intends to replace Louis Vuitton as the world's largest luxury brand (thematic reading).

Although no precise timetable has been set for revenue of 10 billion euros, Gucci expects its sales to grow at double the market growth rate in the coming years, and the operating profit margin will exceed 40%.

At the same time, as Gucci accelerates the layout of online channels, the brand predicts that its electricity business sales will turn three times, accounting for about 10% of the total revenue.

Last year, Gucci opened its electricity supplier service in China, the most promising market.

To achieve the goal of annual sales of 10 billion euros as soon as possible, besides the core garments and leather goods business, Gucci said it will further expand the market share of brand online from beauty makeup, spectacles and channel innovation.

Looking back at Gucci's current business performance, Gucci's sales in the first quarter of this year rose by 37.9% to 1 billion 866 million euros, a 48.7% increase compared with the previous year, and a record high of 9 in the 9 quarter.

Since last year, the industry has begun to pay close attention to the increasingly fierce competition between Gucci and Louis Vuitton, and the latter's status as a trump card is beginning to be threatened.

Although LVMH has not announced the Louis Vuitton performance alone, some analysts expect Louis Vuitton's revenue last year to be between 9 billion 100 million and 9 billion 300 million euros, which means that the distance between Gucci and Louis Vuitton is about 2 billion 500 million euros, which is equivalent to a distance from a Dior fashion department.

And last week, in the 2018 list of the most valuable brands in the world released by the UK's data agency BrandZ last week, based on consumer brand recognition and past financial data, Louis Vuitton brand value rose 41% to 41 billion 138 million dollars over the same period last year, becoming the most valuable luxury brand, ranking twenty-sixth.

Gucci ranked fifty-fourth in the list with us $22 billion 442 million brand value, but increased by 66%. It is the fastest growing brand in luxury goods.

Marco Bizzarri stressed yesterday that Gucci and Louis Vuitton are on the same starting line, so the question is not whether it can be achieved or not, but when it will be realized, and Gucci will achieve its goal as soon as possible.

Some analysts interpreted his speech as Gucci's impact on euro 10 billion is only a matter of time.

It is noteworthy that this is the third time that Gucci has launched a provocation against Louis Vuitton this year.

At the beginning of this year, Gucci parent company Fran ois-Henri ois-Henri Pinault, chairman of Kai Yun group, put down the harsh words. Gucci will "destroy" Louis Vuitton in the future, and use the Gucci obtained from LVMH owner Bernard Arnault in the future to defeat the Bernard.

In May 26th, Gucci announced that it will hold the brand 2019 spring series fashion show on the first day of Paris fashion week in September 24th, which is one of the trilogy of the creative director Alessandro Michele salute to France.

After that, Gucci will return to fashion week in Milan in February 2019.

In view of the fact that Gucci's entry into Paris fashion week is only a one-off act, it is not a permanent entry. Gucci suddenly announced its entry into the Paris fashion week schedule. In addition to the official "salute to France", it seems that it will launch a positive competition in the base of Louis Vuitton.

For the frequent attacks of Gucci, Bernard Arnault, in the interview with foreign media, informs the competitors such as Kai Yun group in the past ten years, and believes that they will not succeed.

But Marco Bizzarri responded by saying that the vitality and creativity inspired by products and businesses are the precondition for success. This is what other companies can do, but they can not duplicate the talent resources of Gucci.

Behind the Gucci's high media exposure, Marco Bizzarri is joining hands.

The professional marketing team built by marketing director Jacopo Venturini has also played an important role.

The team has set up a millennium generation advisory group called the Independent Commission, which is under the age of 30, focusing on the marketing of products from the digital perspective.

In 2015, Marco Bizzarri left Bottega Veneta to join Gucci, then promoted Alessandro Michele as the creative director of Gucci, providing a complete pformation for the brand, from new product line to redesigned store, making them more in line with the aesthetic taste of young consumers.

In just four years after Marco Gobetti took over Gucci, brand revenue increased from 3 billion 500 million euros at the end of 2014 to 6 billion 200 million euros at the end of 2017.

After two years of decline, Gucci began to recover 4.8% growth in the fourth quarter of 2015. By the third quarter of 2016, the sales of Gucci began to enter double-digit growth. In the fourth quarter of 2016, sales growth was 21.4%, and the growth rate in 2017 was maintained at 40% to 50%.

From the point of view of revenue composition, the sales ratio of garments and footwear and jewellery products increased gradually in 2016 and 2017 in the key two years that made Gucci turn over.

Gucci, which starts with leather products, is gradually realizing diversified and balanced development, which means that all kinds of brands have strong attraction.

There is no doubt about it.

Marketing is the booster of Gucci's rapid growth.

Some analysts pointed out that both the creative marketing with frequency up to once a month, the awareness of advanced electricity providers or the courage to break through the traditional shackles are the key to the myth of Gucci turning over.

In May 30th, the Gucci 2019 early spring vacation series was released at the ruins of the ancient Rome cemetery in Arles, the ancient city of France. Alessandro Michele once again used the elements of long religious dress, suits and crosses to restore the old style. It is reported that the show shows up to 111 sets.

In order to cope with the mysterious atmosphere of this series, Gucci set the release time of the show at night. The background music is bell, drum and the tomb music with strange atmosphere.

Since the rise of Gucci, the industry has questioned the sustainability of its heat. In the face of the industry's idea that the concept of Alessandro Michele is overriding the product itself, Marco Bizzarri said that the era of fashion only has passed, and that the unique style and vocabulary created by Alessandro Michele are durable and sustainable.

According to his disclosure, the growth of Gucci sales in the second quarter of this year has not slowed down.

On the online channel, Gucci's business sales increased by 108% in the first quarter, and last year's e-commerce sales rose from 120 million euros in 2015 to 270 million euros.

In terms of communication with consumers, Marco Bizzarri once again emphasized the importance of digitalization. The brand new Harry Styles advertising film has received more than 1 million praise in social media, and the official Instagram account of Gucci has 25 million fans.

Fashion headline earlier analysis that Gucci broke the popular theme of the theme division, carrying a unique aesthetic concept of products showing a distinct personality.

Obviously, Alessandro Michele is much smarter than other brands who blindly follow suit.

According to Tribe Dynamics, Gucci's media value ranks first in the industry with a valuation of up to $62 million.

Marco Bizzarri said that Gucci will continue to invest more in digital marketing channels in the future. This year's investment will account for 55% of the total expenditure of media marketing, and will not reduce investment in traditional paper marketing channels.

He believes that paper media have many possibilities for luxury brands.

At the moment, Gucci is betting that the move of the electricity and youth market is gradually playing its role. However, Gucci is still seeking greater market potential through macro structural reform and business layout.

In March 1st this year, Gucci formally implemented a new organizational structure to further promote its global business expansion.

Gucci pointed out in the statement that the introduction of the new framework aims to further strengthen and deepen the relationship between the brand and consumers, and to better apply new technologies to various channels on the basis of personalization.

At present, Gucci's beauty and perfume business has been pferred from Procter & Gamble group to Coty group, and eyeglasses business is responsible for Kai Yun group.

Marco Bizzarri revealed that the new Gucci beauty makeup and perfume products, led by creative director Alessandro Michele, will be available in 18 months. The beauty products will be released in May next year, and perfume will be released in September next year.

For the annual sales target proposed by Gucci, HSBC analysts think it can be realized and will be reflected in the stock price. Since this year, the Gucci parent company's group has increased its stock price by more than 35%.

Luca Solca, head of the luxury sector at Paris bank, shows that the growth rate of the market in the second half of 2018 has been rising or rising at a low level.

The global luxury industry also conveys positive signals.

According to a research report released by Bain on Thursday, the global sales growth of personal luxury goods such as footwear and clothing will increase by 6% to 8% at the constant exchange rate this year, following the increase of 6% in 2017. The scale will be 276 billion to 281 billion euros.

Among them, luxury goods sales in mainland China are expected to grow 20% to 22% this year, far exceeding other markets such as Europe.

The report points out that the expansion of China's middle class and younger generation of consumer groups is a driving force for the growth of the luxury market.

This is also the most important market for Gucci to catch up with Louis Vuitton.

Data show that sales of Gucci 67% now come from female consumers, consistent with 2015.

According to nationality, European consumers account for 14%, American consumers account for 24%, Japanese consumers account for 9%, Chinese consumers account for 28%, other Asian consumers account for 19%, Middle East consumers account for 5%, and brands earn 56% of their income from the millennial generation.

Obviously, Louis Vuitton also felt the market impact brought by Gucci, and is actively implementing a comprehensive layout of young initiatives.

Unlike Gucci, Louis Vuitton chose to add youth culture elements to the product and expand the influence by digital marketing.

The luxury brand relies on cooperation with fashion brands, and the role of social media in helping traditional luxury brands to regain the attention of young consumers.

LVMH has pointed out in the earnings report that Louis Vuitton's LV x KOONS and Supreme x LV series have all received a positive market reaction, which greatly enhanced the exposure and influence of the brand in social media.

More importantly, the social media effect is finally effectively converted to purchasing power.

Earlier, the US media reported that the Supreme x LV cooperation series created more revenue than the sales of Supreme 6's physical stores and official website, which has sold more than 100 million euros so far.

The freshness of this mix of luxury brands and luxury goods directly prompted Louis Vuitton to announce the appointment of Virgil Abloh as the creative director of men's clothing in March of this year, and was also the founder of the fashion brand Off-White.

Or in order to narrow the distance from the millennial generation, Louis Vuitton showed the whole process of Virgil Abloh's first day to work on the official Instagram live broadcast to 24 million fans instead of the traditional form made by well-known photographers or creative teams.

Anusha Couttigane, a luxury retail analyst, believes that the role of social media marketing is not only "exposure" but also "dialogue".

She emphasized that the exclusiveness of luxury goods is important, but after an irrational "show off" purchase period, the best embodiment of consumer upgrading is that consumers are becoming more socially conscious.

"The most important factor in the success of luxury brands today is creating relevance," explains Anusha Couttigane. "Consumers buy brands because these products meet their beliefs and lifestyle needs and can attract their products to be reliable and familiar brands."

Some analysts pointed out that in the rapidly changing luxury industry, with the influence of social media, consumers' preferences will become increasingly difficult to consider. Brands need to attract consumers' attention by constantly introducing unique and innovative designs or gimmick fashion shows.

Federica Levato, partner of Bain company, said luxury brands should be responsible for themselves. In the increasingly smart days of consumers, forward-looking brands will win more potential consumers.

Quote

A famous saying circulated around the world that you may be out of the office tomorrow.

Needless to say, Gucci business brain Marco Bizzarri has greater ambitions.