Kering, a Luxury Digital Advertising & Strategy Case Study
Kering is an international luxury group founded in 1963 in Paris. As the parent company to Gucci, Yves Saint Laurent, Balenciaga, and other high-end subsidiaries, Kering is one of the largest luxury retail conglomerates in the world.
No longer restricted to the barriers of one-page magazine advertising, luxury brands and conglomerates like Kering are flocking to social media platforms to target the increasingly younger luxury demographic as the new form of their luxury marketing strategy.
While social media icons wield extensive influence among their hundreds of thousands and even millions of followers secure up to $22,000 for every sponsored post, the investment seems to be well worth it for luxury brands.
In December of 2019, Kering earned an estimated $36 million in media exposure thanks to Gucci and Saint Laurent’s combined 3,700 social media influencers. This figure is reflective of why Kering’s media budget has grown to cover digital advertising more and more every coming year, something we can only guess means more spending with advertising agencies. And while Kering does not reveal its total advertising expenditures, we can confirm that the luxury conglomerate believes in its digital advertising and marketing strategy now more than ever. Its digital chief, Gregory Boutte, said of Kering’s online strategy, “There’s a big shift in how we’re thinking about advertising and creating aspiration. Now with every type of social platform, you need different types of videos, of pictures. You don’t create content on YouTube as you do on TV.”
Kering’s understanding of the importance of native content is certainly a big reason why its brands have garnered high marks for engagement across all the platforms they utilize. From Saint Laurent’s short, yet million-view-racking YouTube videos to Gucci’s mastering of the Instagram world, Kering has demonstrated through an acute awareness of social transmission just how effective it is to leverage its brands’ names for greater consumer recognition. Of course, this translates incredibly well with Kering’s marketing strategy. While most brands carefully guard their image and are adamant about their publicity efforts being the only presentation of their business, Kering has fully embraced the power of consumer-driven content.
“As arguably the most notable brand in hip hop, Gucci’s unwavering popularity among rappers signifies a cultural dominance that boosts the luxury name with an increasingly younger consumer audience,” says Juan Manuel Gonzalez, founder of UI/UX and luxury marketing agency G & Co.
It’s been almost a decade since Kanye West made “What’s Gucci?” the new “What’s good?” And yet, Gucci still finds itself the obsession of the hip hop world, with the 2017 hit Gucci Gang’s 53 mentions of the Kering subsidiary and Kylie Jenner sporting the brand with her baby carrier preceding record sales in the first half 2018, most of which came from consumers under 35.
This is of no surprise to Gucci’s creative leadership, whose director—Alessandro Michele—understands the power of social transmission, especially in a luxury marketing strategy. Under Michele, the brand has leveraged streetwear culture’s heavy influence to deliver a strategy that compels enthusiasm.
The almost viral nature of Gucci’s approach bodes well with tech-savvy millennial consumers, who with greater buying power as they mature into their careers and everyday social media usage flock to the brand and flash their wares in the same sense that hip hop artists do to signal their rise to high-status and notability.
But it’s not just the personal display of the brand’s products themselves that’s part of the Gucci and Kering digital strategy. As image-driven as their approach has been, you’d be hard-pressed to not find Gucci as the target of photographers and creatives across Instagram. The contagious inclination for individual users to mimic others by posting their own creative twist propels Gucci’s reach even further online, magnifying the efforts of any marketing agency online.
From the brand’s #GucciGram campaign and independent posts showcasing experimental ways to display the Kering subsidiary, Gucci has an enviable mastery of the visual platform and of the culture that reins it.
As an advertising agency, we commend Kering’s marketing strategy and digital innovation. It’s this kind of approach that’s led to Gucci consistently ranking as one of the top luxury brands online in terms of social media savviness.
Of course, Kering’s advertising strategy and brand style differ with every name it holds. After all, the luxury group considers every one of its houses and manufacturers to have its own, unique personality in tune with its artisans. And in the case of Yves Saint Laurent, influencer marketing has been an effective tool of choice.
In Saint Laurent’s online strategy campaign for its “Y” male fragrance, the French fashion house selected a group of male models who, like Kering, each have their own style in an effort to appeal to the growing market of modern and vogue men. This two-pronged approach did two things: one, it gave consumers the perception that Saint Laurent is a brand for the fashion-forward millennial man of today; and two, it built an association between the models and the brand itself, with the former’s following being a new targeting pool for future Saint Laurent consumers.
The result of using selected sponsors has turned out well for the French fashion house. In 2017—the year the “Y” male fragrance campaign was launched—Saint Laurent saw its follower count grow by 70% and boasted nearly 28,000 mentions, accompanied by a record 25% annual growth in revenue and profits. As such, Kering has continued to utilize social media influencers for Saint Laurent.
Such an approach to a luxury advertising strategy preserves the aura of exclusivity by way of allowing selected “ambassadors” to do the talking for luxury brands rather than promoting the brand itself in the mainstream sense, which in the high-end world gives the impression of undesirability and can do far more damage than good.
That’s the same concern luxury brands had in adopting an online strategy. “It wasn’t even ten years ago that hardly any brand had something you could consider a viable eCommerce strategy,” says Manuel Gonzalez, head of the digital agency G & Co. “Now, you see this necessity for luxury brands to adopt a digital strategy—especially because of the challenges and consumer trends 2020’s brought on.”
The difference with Kering is their proactiveness in approaching the online medium. As one of the first luxury brands to have embraced eCommerce, Gucci knows perhaps better than any brand as of now that an online store is only the first step in a comprehensive digital strategy. With Kering having gotten a taste of what would come when it was reported to have 100 million visitors for the Gucci website in 2015, the luxury conglomerate went ahead and invested more in its digital transformation.
At a time when luxury brands either hesitated an online entry or failed to take it seriously as the belief had been that consumers would always prefer shopping in-store, Kering extended Gucci’s mantra of “brand first, channel second” to offer the same immersive experience to its customers online. Kering’s omnichannel strategy signaled its intent to provide an engaging way to connect with consumers whichever way they preferred. That move could not have come at a better time; the luxury shopping demographic had begun increasingly getting younger, whose expectations now called for brands to adopt a digital innovation that met them where they frequent most.
Among the key initiatives in Kering’s design strategy for the first Gucci website overhaul in thirteen years was to streamline ease of use for an optimal user experience, a “find in-store” option feature, extensive product information, gift wrapping, and the implementation of customer service via phone and e-mail. Then, there’s the highlighting of Gucci’s recent runway collections, pictured prominently under their “What’s New” catalog that allows shoppers to pick pieces that immerse themselves right into the fashion-forward experience.
It’s this kind of design strategy that’s allowed Gucci—and Kering—to iterate, excel, and continue to dominate the luxury digital landscape. An omnichannel approach has allowed the luxury brand to raise the bar for a well-catering experience both online and offline. And because it has invested methodically in its digital capabilities for years now, Kering was able to turn a rough 2020 into the single best year for online sales, with Q3 reporting a 101.9% growth since the previous quarter led by North America and Asia-Pacific.
While the trends we see from a pandemic-induced economy show eCommerce rapidly growing its share of all retail sales, it is not a phase that will descend back to pre-2020 trends. Rather, the pandemic succeeds the steady rate at which eCommerce sales had been rising and only accelerated its growth for years to come. This means that luxury online strategies will have to adapt with a rapidly digital world and assume bold advertising strategies that resonate with today’s consumers.
The successes of Kering’s digital marketing strategy is only one example of how high-end brands can flourish through a virtual medium. While no business can dare ignore an online approach now, the apprehension that once withheld luxury brands from committing has faded by the streaks of success the most recognizable names have netted. If high-end brands can learn anything from Kering’s advertising strategy, it’s that there is no such thing as trading grandeur for accessibility and reach. Both Gucci and Saint Laurent have demonstrated that it is more than possible to be vogue and online.
What is Kering’s spend on digital marketing/advertising?
While Kering does not reveal total advertising expenditures, its 2017 investment in advertising was approximately €1.1 billion, or $1.3 billion.
What did Kering do for a digital transformation?
Kering led the way in digital transformation at the group level, strongly believing in the growing online medium to become one of the most digitally acclimated businesses in the luxury space. Gucci’s early adoption of eCommerce signaled Kering’s conviction that eCommerce would be the way of the future, and its brands have followed suit by extending their reach online.
What is Kering’s digital strategy?
The core of Kering’s offering is that its products create a desire among luxury consumers. That philosophy translated online to engage shoppers in a more accessible manner more fully than they could in-store. Right now, Kering’s approach to digital is emboldened by the seismic shift in consumer trends that accelerated eCommerce growth, as it plans to further innovate and heavily invest in anticipation for a sustained luxury space.
What is Kering’s customer experience (CX)?
Kering’s customer experience is defined first and foremost by consistency across all of its distribution channels and providing a unique customer relationship wherever and however shoppers may choose to interact. The luxury conglomerate’s biggest focus is on enhancing its omnichannel capabilities to offer a seamless method of engaging with consumers and spurring its brands’ digital presence.
Whose Kering’s target market/customer?
Kering understands that people want a brand they can associate their own unique style and personality with, which is why every brand the luxury conglomerate houses has its distinct flair. Kering’s target customer is that of someone who seeks self-expression and can find synergy in their brands to share their potential and creativity with the world around them.
What is luxury brand digital marketing, how is it different?
Because of the brand positioning, a luxury brand’s digital strategy will have to look different than any other brand’s in terms of how it engages with customers, showcases its products, and communicates its value.
Instead of the push promotion strategy, luxury brands need to pull consumer interest in their brand through relevant and engaging content. How a luxury brand chooses to pull that interest is for them to choose.
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Why is UI/UX important for luxury brand eCommerce stores?
A good user interface (UI) and user experience (UX) is essential for any eCommerce store in that it helps browsers easily navigate a website for the sole purpose of making their customer journey easier to finish. Most importantly, an eCommerce store is a window into a brand’s image; the first impression a browser makes when coming across a shop can easily determine whether or not they will continue browsing and ultimately purchase something.
Why is eCommerce important for any luxury business?
In the rapidly changing world we live in, it’s important now more than ever for brands to adapt to evolving consumer needs. And that includes meeting them where they are.
How is eCommerce different for luxury and non luxury brands?
It’s not enough for luxury brands to have a branded site just to check the box off on eCommerce. Consumers today want an experience that matches the quality of a luxury product they purchase. That’s why luxury brands place a great emphasis on tailoring their approach to play on consumer sentiment and meet the mark of exclusivity.