With money to blow off and lifestyle to expertise, millennials are swapping first-home down obligations for luxury purchases.
Utilizing cultural synergies, such as among its most recent with streetwear’s Dapper Dan, Gucci’s re-branding and targeting beneath the design leadership of Alessandro Michele have collaborated together with youthful hypebeasts and road luxury enthusiasts. It is no wonder that the fashion house was deemed among millennial’s favorite luxury brands, according to the poll and social-media data analyzed by UBS. We believe there are a few reasons for this.
Accessories will be the entry point to luxury brands, and the Gucci brand, in particular, opens that gate to its shoppers, with a lot of its accessory offering priced under $500 (over 70%). When many millennials can be spotted donning the available items, fantastic luck trying to get your hands on one of those Marmont straps, since we’ve seen stock-out rates nearing 40% for retailers stocking these enviable belt styles.
Once we speak luxury, totes are oftentimes top-of-mind and that’s because they comprise a substantial part of category spending. Nonetheless, a luxury purse nearly always means a hefty price tag, another step up concerning a customer’s investment. The typical cost for a Gucci bag rang at $2,377, ranking the highest from its tony counterparts. The closest runner up in average cost was Kering cousin, Saint Laurent.
It Varies Its Offering By Channel
Among the drawbacks some manufacturers fall into, is not significantly differentiating their offering by electronic channel. While Gucci only trades at the premium of luxury marketplaces and department stores, it doesn’t take a one-size-fits-all strategy with its trading partners.
Bloomingdales, as an example, only sells Gucci accessories and accessories on the web, so its average price is lower. Another four merchants, Net-a-Porter (NAP), Nordstrom, Saks, and Neiman Marcus, have offerings across sections. Furthermore, NAP dedicates the most significant chunk of its Gucci offering to clothing, which distinguishes it from other retailers and leads to it having the greatest average price for Gucci goods.
Another channel worth mentioning is the resale market, one that is growing in the mind-boggling rate of 24 times that of standard retail, based on research by ThredUP. While not without its own issues, based on expert analysis by Business of style, luxury brands may think about resale stations as ways to create new data and present the opportunity for new revenue. Gucci is no exception for this. If you go onto The Real Real, you are going to see no fewer than 5,000 (verified authentic) Gucci women’s handbags. It’s a way for youthful customers to get their hands on their first Gucci bag, and in turn, it is a way for Gucci to catch a shopper that will probably be considering trading up in the future.
There’s Always A Surprise
Alessandro Michele infamously pulls inspiration from the weird, wacky, and mainstream alike, combining them in ways that, under another designer’s charm, may come out embarrassing and cringe-worthy (but save some courageous fashion souls.) Nonetheless, he pulls things off like Yankees embroidery on driving shoes, Dollly Parton sweatshirts, and collaborating with legendary”knock-up” master, Dapper Dan, in a sense that hit on the pitch-perfect ironic note the new generation of luxury consumers dig. Whereas many iconic luxury houses have taken themselves and their legacies quite badly, Michele recognized that in order to preserve the house of Gucci, he needed to create and have a little fun at its cost. Turns out this strategy interpreted to cash in the bank – last year’s Gucci’s earnings forecasted in at an envy-inducing 45% growth over the last year.
Will Kering’s Gucci continue its run(a)manner achievement? It’s a fantastic question, and while each style label has its peaks and valleys, if it continues to keep a pulse on the sentiments of a young consumer (like their love of resale), empower its design group’s imagination, and remains tactical about its own pricing and variety composition, it must remain firmly in a place of millennial significance.