Gucci and Louis Vuitton have emerged as two modern luxury success stories, as sales continue to climb internationally at both brands. And even though they answer up to different chains of command at their respective parent companies, Kering and LVMH, similar success formulas can be traced in each of the brands’ strategies.

The recipe: Revamp stores but don’t build many new ones, invest in new manufacturing facilities, raise prices while strategizing distribution and, of course, foster millennial appeal.

“The big houses have figured out that they need to let these overarching masterbrands live on their own, because customers connect with a brand, not a parent company,” said Rachel Spiegelman, CEO of branding agency Pitch. “But still, what LVMH and Kering have done to foster the success is interesting from a strategy perspective; it’s basically a digital leg-up.”

At Kering, Gucci has shown no sign that its runaway success will be slowing down any time soon. Kering reported in its results for financial 2017 that Gucci, with an increase of 46 percent over the year prior, reached $7.4 billion in revenue in 2017. Overall, Kering brought in $19 billion in sales.

On Tuesday, for its first quarter of financial 2018, LVMH reported that revenue grew by 10 percent, to $13.5 billion. While LVMH doesn’t break out the individual revenue growth of its brands, its fashion and leather goods category, the largest and of which Louis Vuitton is a part, grew by 16 percent, to $5.3 billion. Louis Vuitton has long been the star brand, among other fashion brands like Christian Dior Couture, Fendi and Céline, and it was cited for its leading creative growth across categories and new collections.

Neither Kering CEO Francois Pinault nor LVMH CFO Jean Jacques Guiony is concerned that either brand is up against a forthcoming downfall. Pinault told investors in February that since growth was being sourced across all categories, there is “no Gucci bubble.” To LVMH investors, Guiony said, regarding Louis Vuitton: “We are not concerned with the risk of becoming overexposed — the risk is to lack momentum.”

Here’s how the luxury conglomerates plan to keep these brands on top.

Skew young
Both companies understand that to survive, luxury brands need to make direct plays for millennial customers’ wallets.

“Millennials and Gen Z are the future of luxury customers, and they care little about the brand heritage,” said Pinault. “It’s about brand interaction in the here and now, and standing apart in a new world where everything is similar. The Gucci universe is inclusive, immersive and open to collaborations, and it’s outperforming by targeting millennials, this new class of customers in luxury.”

That Gucci universe is one derived by creative director Alessandro Michele, who has struck the right chord with the customer subset: Millennials make up half of Gucci’s overall sales.

LVMH’s response at Louis Vuitton: Pluck a streetwear darling that shares a similar mindset and install him at the helm of a luxury brand.

“My approach is to make the creative industry inclusive, not exclusive,” Louis Vuitton’s new creative director and Off-White designer, Virgil Abloh, told Glossy in a previous interview. “Shifting the veil of secrecy feels new.”

Abloh’s ability to drive more millennials to Louis Vuitton has yet to be determined; in the meantime, the brand has counted the most-followed celebrity influencer on Instagram, Selena Gomez, as brand ambassador.

Bring production closer to home
Last year, Kering announced that the Gucci Art Lab would open in 2018: A new manufacturing and fabric sourcing facility in Italy that would bring production of leather goods and shoes closer to home, and shorten lead times when getting new items to market.

In March, LVMH also announced a forthcoming Louis Vuitton atelier set to open in France in 2019. The new facility will focus on increasing the speed-to-market of leather goods.

Essentially, if you want to win over millennials, you better tighten up your production schedule. Both brands are also moving to become more vertically integrated, meaning they’ll have tighter ownership over what fabrics are used in luxury goods, as well as who creates products and how quickly. At Louis Vuitton, Guiony said the goal is to get certain products on a 15-day production cycle.

“Internal decisiveness is probably the single biggest challenge in terms of speed to market,” said Ed Gibbons, the president of Alvanon, an apparel production consultancy. “Luxury has been more nimble at making decisions than, say, department stores or specialty retailers, which have been on an 18-month cycle. That doesn’t work anymore: Who knows what we’re going to want in spring of 2019.”

Fix stores while investing in digital
Both Gucci and Louis Vuitton aren’t opening many new retail stores, but they are fixing the ones they have in order to drive more direct retail sales.

Gucci’s “New Store Concept” is underway. The goal is to turn the spaces into more experimental, digitally driven shops that specialize in cross-channel customer service. Right now, about 25 percent of its 550 stores have been remodeled, with 30 more stores to be completed by the end of the year.

Guiony told investors this week that while Louis Vuitton’s store count would increase in the low percentages, it would be revamping the ones it does have, a process that will take some time. The purpose is to improve customer experience, increase store size and review how they’re operated, in terms of fulfillment and distribution.

But even as stores get upgraded, core investments are going to digital efforts. Online sales at Kering jumped 60 percent in 2017 as the company has angled its strategies around mobile apps and improved e-commerce. LVMH doesn’t break out a similar statistic, but sources have said online sales account for about 5 percent of the company’s revenue. The launch of online luxury marketplace 24 Sèvres was meant, in part, to improve that.

Part of the challenge continues to be understanding, and adapting to, new customer behavior.

“We try to understand the market; we try to understand the customers. But predicting their behavior and predicting external shocks as they may happen from time to time is always a very difficult task,” said Guiony to investors on Tuesday.