When brand impedes growth
When brand impedes growth
Are aesthetics and scale antithetical to each other?
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When Alessandro Michele stepped down as the creative director of Gucci last week, the first question, to the uninitiated, was why. Kering reported a “very solid revenue growth” in the Q3 of 2022, with Gucci contribution of €2,581 million, up 18% as reported and 9% on a comparable basis.
Gucci is making money, but apparently not enough. To successfully compete with its rivals - LVMH, Prada, Chanel, Hermès - Kering needs more. In the past decade, luxury fashion accelerated its oscillation between heritage and novelty, craftsmanship and chasing trends. In the process, its business model changed. Scale and global ubiquity are key. Store openings skyrocketed.
To serve their now massive footprints, luxury fashion brands need two things: a) constant novelty, and b) accessible aesthetics. They have to be on-trend and universally attractive.
In contrast, Gucci mostly shunned trends and put forward a signature aesthetic. When he joined, Michele established the Gucci Look, an androgynous, hippie, renaissance mix of florals and sequins, glamour and glitz, surprise and whimsy, subversion and creative expression. Since 2015, when it was first introduced, this maximalist, neo-Romantic look is instantly recognizable as quintessentially Gucci on the street and on the runway. “I feel Gucci!” and “That’s so Gucci!” are part of our cultural lexicon.
This was the right thing to do: a signature aesthetic is crucial to brand recovery. The more defined the aesthetic, the more curatorial rigor it offers to design, merchandising, and styling, and the more it allows these functions to align in delivering a new, shared brand experience. A signature brand aesthetic also translates into core products, which are the purest distillation of what a brand is. For Gucci, these products became GG Marmont and Soho bags, Princetown slippers and loafers, the GG belt, GG canvas print, and 1970s-inspired suits and dresses.
But once a brand revives itself and hits its stride, its aesthetic has to keep evolving to stay alive. One thing is to have a blueprint; another one is to have a dogma. Brands are living, breathing things, in constant dialogue with culture. Michele’s genius was to capture cultural shifts before they were happening on the global scale - today, everyone from Timothée Chalamet in Haider Ackerman’s red backless pantsuit to Brad Pitt in a skirt are sporting a version of the androgynous Gucci look pioneered by Michele and spread by Harry Styles and Jared Leto. But what made a brand exciting and successful in one cultural moment would not be as exciting (or successful) once it enters mainstream. We’re one step away from the ruffled men shirts being sold in Zara.
At a different time, Michele would have been fine to pursue his creative perspective. Traditional luxury fashion strategy has never relied on trends, novelty or accessibility to sell their wares. Luxury fashion founders - like Chanel, YSL, Balmain or Balenciaga - put forward their own signature aesthetic, and didn’t deviate much.
By their very definition, luxury fashion identities are an acquired taste. Acquired tastes do not scale. They also do not keep the margins high and the sales higher.
Mass tastes do. To keep growing its business, Gucci brand had to become more accessible. Michele was unwilling to do that. Instead, Gucci solidified into a particular taste, and - in place of wide audience, once the novelty wore off - kept attracting a particular taste community. For global growth, brands need more than one taste community. Even Demna, despite all the novelty (and teddy bears in bondage gear), still keeps Cagole in circulation.
Mature markets, including luxury fashion, have many different segments. A strong identity brand cannot successfully capture all of them without losing some of that identity. In order to address different market segments and serve its market as a whole, a brand has to expand its aesthetics.
There are multiple scenarios to do this:
Brand autocracies. Strong identities, especially when they are closely linked to the founder and the founder is still around, turn brands into autocracies. Ralph Lauren has kept his signature aesthetic for many decades. It has been widely imitated, borrowed from, and culturally celebrated but it doesn’t move the stock price upwards. Lacking the external financial pressure, Ralph Lauren doesn’t need to move fast. Lauren’s aesthetic, although unchanged for decades, is still attractive to a specific taste community. This taste community keeps the brand afloat.
Diversification. Marc Jacobs created Heaven to play the 1990s role that Jacobs once had: to stay close to urban young generations and design for them. The main brand focuses on Marc Jacobs’s creative vision when it comes to apparel and on archive revivals and core collection when it comes to handbags. Diversification is different than diffusion as the two brands have an entire different aesthetics.
Collaborations. This is the easiest way for luxury fashion brands to stay afloat of culture. An established luxury brand, with an established and recognizable identity, collaborates with a culturally exciting brand or personality. LV collaborations, Kim Jones’ Dior and Fendi collaborations, Balenciaga collaborations, etc. are all ways to achieve novelty while keeping the brand identity. Gucci didn’t collaborate much until it’s global slowdown a few years back; since 2020 it collaborated with Adidas, North Face, Disney, and Balenciaga, another Kering brand.
Talent turnover. Creative directors of luxury fashion brands change houses every few years. Michele’s run was an exception as is Olivier Rousteing. By frequently changing their creative directors, luxury fashion brands keep reintroducing different aesthetic interpretations of their core identities, keeping these identities fresh.
Diamond model of growth. Unlike the traditional luxury fashion pyramid model, in the diamond model, products and/or services at the bottom look differently but do not diminish in quality compared to those at the core. At the core, the diamond model features limited editions, special collections, small product series, and/or limited distribution. The core has a more selective and/or controlled distribution than the entry level. The levels are all part of the same brand aesthetic, but adhere to the different audience segmentation criteria.
A strong brand identity gives brand recognition, differentiation, consistency and loyalty. A strong brand identity can also be antithetical to scale. The mode of balancing the two - aesthetics and growth - chart a company’s business trajectory.