Gucci’s Dilemma
The Gucci Spring 2020 runway show at the current Milan fashion week marked a new beginning for the legendary fashion brand. Significantly different from his previous work, Alessandro Michele, the creative director of Gucci, delivered a radical aesthetic shift that embraced a much simpler, minimal and edited focus. This shift shocked many in the industry because his signature maximal designs had revived and brought unprecedented growth in sales and attention for Gucci since 2015. His fantastical design lexicon took place at the right time, providing a rich world of escapism for luxury shoppers that proved to be an instant success and continued to captivate shoppers.
While the approach led to dramatic growth in the past few years, Gucci’s sales have started to slow down in 2019 due to a combination of factors including the unstable political turmoils around the world, the aesthetic fatigue shoppers are experiencing, and so on, Its growth rate in the Asia Pacific region, one of its strongest performing sales region, has slowed from 47 percent in 2018 to 23 percent in 2019. In order to combat the decreasing sales, Michelle changed the creative direction of Gucci to a more contemporary and wearable approach to meet the needs of mass public and combat against other major luxury brands in the market. The decision to introduce a new aesthetic incorporates the theories and thought process of game theory introduced in class.
Take one of its chief competitors, Louis Vuitton, who is continually achieving higher sales throughout the past few years with its minimal and streetwear designs, as the first player in the game, and Gucci as the other, there are four outcomes possible for the game. If Gucci changes its artistic style to cater to the public while Louis Vuitton remains the same style, they both share positive payoff. If both Gucci and Louis Vuitton stick to their current designs, Gucci is going to have negative payoff while Louis Vuitton gains positive payoff. If Gucci remains its style while Louis Vuitton changes its direction similar to Gucci’s, both will receive negative outcomes. Last but not least, if Gucci moves toward a minimal aesthetic while Louis Vuitton moves toward a maximal vision, Gucci gains positive payoff while the latter receives negative payoffs. Therefore, Gucci should change its design direction to more simple creatives no matter what its competitors do to ensure a positive payoff. In this sense, we can easily understand Gucci’s decision to abandon the old designs that have once brought it to its glory and move on to a new era, even at the risk of losing customers and facing criticism.