There’s apparently no stopping Gucci’s sales growth, and parent company Kering is confident revenues can keep rising.
On Tuesday, Kering reported its results for financial 2017, and its biggest brand showed sustained domination. Gucci, with an increase of 46 percent over the year prior, reached $7.4 billion in sales in 2017. Overall, Kering brought in $19 billion in sales.
Anyone watching Gucci’s rise over the past two years under creative director Alessandro Michele and CEO Marco Bizzarri has to wonder how long the brand’s growth rate can last. In response to investors who raised questions during Tuesday’s earnings call around Gucci’s lasting momentum, Francois-Henri Pinault, CEO of Kering, said that while the company is focused on customer retention, he’s not worried about the brand crashing and burning.
“Gucci’s growth would be risky if it was focused on a few product categories, geographies or demographics, but the truth is that they’re all growing. There’s no Gucci bubble,” said Pinault. “Its desirability is tremendous, and while it’s created by ready-to-wear, the creative universe covers all product categories, so growth is homogenous. I’m highly confident in the continuing development of the brand.”
In order to maintain Gucci’s growth, Kering has supported the brand’s strategy to analyze, grow with and retain customers using a database and CRM platform led by Kering chief digital officer Grégory Boutté, who is leading e-commerce management, data platforms and CRM across all brands in the company’s portfolio. Pinault also spoke to a plan to make Gucci’s products as high-quality as possible, while making products available to customers everywhere. The Gucci Art Lab will open this year, which will “enhance efficiency,” according to Pinault, by bringing manufacturing and fabric sourcing in-house.
To get its products in the hands of as many customers as possible, Gucci’s retail strategy has included building up e-commerce operations both on Gucci’s owned website and through online retail partners. In December, Pinault said that Gucci’s website saw 5 million visits in 2017 (overall at Kering, online sales increased by 86 percent). The brand continued to maintain momentum on social media, as well, with Instagram followers increasing by 70 percent last year.
About 150 Gucci stores also underwent a transformation to adapt a new in-store concept with higher-touch customer service, in-store customization capabilities and cross-channel customer profiles. The brand also opened The Gucci Garden in Florence, a retail hub that includes experiences like art exhibits and restaurants, as well as multi-brand collaborations.
These endeavors encapsulate what Pinault believes to be the future of luxury.
“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.”