The business model of Gucci.


High end fashion and couture brands are good at predicting what people are going to wear in the future. However, when it comes to designing their future business model, they seem to follow trends rather than setting them. The industry has proven to be relatively slow in shifting from its traditional brick-and-mortar boutiques to online shops.

For ages, fashion houses, like Gucci, Prada, and Louis Vuitton, have been relying on their physical stores to serve their clientele. On top of that, most luxury brands believed that e-commerce was more suitable for lower and mid-price products. It wasn’t until McKinsey research showed that 80% of luxury sales are “digitally influenced” that the fashion houses started to change their strategy. Once they realized the majority of their customers were looking for online inspiration during or after purchasing a luxury item, Gucci knew it had to step up.

Equestrian background.

Italian brand Gucci was founded by leather craftsman Guccio Gucci in 1921 in Florence (Firenze). Up until then, Guccio was renowned for his high-quality horseback riding accessories. He started designing lifestyle products after he got inspired by the wealthy upper-class guests, whilst he was working at the Savoy Hotel in London. Up until today Gucci designs are still strongly inspired by Guccio equestrian background and Italian craftmanship, but they are rather described as eclectic, contemporary and romantic. The brand has a rich history and the reputation for serving some of world’s most early-day influencers such as Jackie O., Grace Kelly and Audrey Hepburn. 

Let's have a look at Gucci's business model canvas before 2015.

Redesigning its legacy.

After two turbulent decades filled with family feuds and changing creative directors, 2015 marked the beginning of a new area for Gucci. When Marco Bizzarri became CEO and Alessandro Michele joined him as Creative Director the company quickly adapted their strategy.

First, the new leadership focused on transforming company culture by creating an environment that empowers employees, encourages innovation, and builds on diversity and inclusion. Second, Bizzarri and Michele shared a bold vision for the company where they wanted creativity to become the priority and online presence to become as important as their physical points of sale: Gucci was to become the first legacy luxury brand to behave as a “digital native”. 

A new narrative for a new customer segment.

Gucci started focusing on a new customer segment that was not part of their target audience before; young adolescents. They not only redesigned their apparel and accessories but also their narrative so that they could connect with millennials emotionally through different channels. The brand evolved from traditional runway shows and models into using role models and Instagram. 

Following the strategy of its parent company Kering Group, Gucci, is focusing on its channels to tell its story. By integrating its digital and in-store experience, the brand was able to create an omnichannel strategy that makes its audience come back for more. 

Check out Gucci's business model canvas after 2015.

Predicting the future of fashion.

Stepping away from their physical business model and embracing the digital transformation was not easy for Gucci. The successful transformation of the brand is often used as the blockbuster story in the fashion industry. Currently about 50% of Gucci’s sales are coming from millennials, showcasing the success of their shift. The brand is working on an even stronger relationship with millennials so they can get them to buy into the brand image. 

Currently, the fashion house is implementing artificial intelligence in different parts of its business. They use it to forecast sales in their retail outlets, but more importantly, it’s to leverage data generated by their tech-savvy audience. By truly understanding its customer’s behavior, Gucci can predict what the future of fashion will look like.

"Sustainability is about fostering respect: respect for the people we share our planet with as well as for the environment." - Gucci

Gucci remains at the forefront of fashion innovation with recent updates showcasing its commitment to sustainability, inclusivity, and digital experiences. Notably, the luxury brand made waves in 2019 by launching its first NFT, leading the industry in exploring non-fungible tokens. In the Metaverse, Gucci offers immersive experiences, inviting individuals to explore the brand's rich history in interactive ways.

Artificial intelligence plays an important role in Gucci's sustainability efforts, reducing waste and providing insights into consumer trends. AI is seamlessly integrated into the sales floor experience through mobile applications, empowering sales assistants with real-time information and enhancing the personalized shopping experience. Gucci further embraces technology by using customers' smartphones for augmented reality virtual try-ons, offering a unique and personalized touch. 

Dedicated to inclusivity, Gucci has partnered with Aira to enhance in-store accessibility for disabled consumers. Additionally, the brand has introduced the Gucci Garden experience on Roblox, a captivating multimedia journey set in Florence, Italy. These updates underscore Gucci's ongoing commitment to blending fashion and technology while prioritizing sustainability and meaningful connections with a diverse audience. 

Niki Seelen
Head of Design Amsterdam

Niki Seelen

Super out-going, storyteller, sun-seeker, novel reader, lover of friends, fit girl, formula 1 fan, global citizen, design for impact, Barcelona.