H E EJ U NG K I M
DANA C AR I EL LO
C AT H ER I N E BAT R ES
T I A N YI WA N G
P ROFES S O R AL ES SANDRO C A N N ATA FAS M 4 3 0 PO P U P EX P ER I EN C E D U BA I
DISCLAIMER This p ro ject was co nd u cted by P rofesso r A lessand ro C annataâ€™s Fashio n Market ing and Management co u rse 4 3 0 : Retail Management / Fall 20 16 . The co ntent in t his b o o k i s used fo r ed u cat io nal p urp oses at the S avannah C o llege of A rt and Desi gn and will b e so u rced at t he end of thi s b o o k (p lease see b ib liograp hy ).
TA B LE OF CONT E N TS
0 1 . INTRODU CTION 0 2. C OMPANY OVE RVIE W
Executive Summary About Gucci Company Information Market Analysis Communication Strategies Brand Analysis SWOT Analysis
0 3. STRATE GIC INITIATIVE UAE Market Analysis Target Market Proposal Communication & Promotional Plan Financial Plan
0 4. C ONC LU SION References
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“Captivating architecture and design, intuitive technology, the integration of public and private spaces, and an active, collaborative role for the world’s leading creators are pillars of transformation” turning retail centers into attractive destinations with community and cultural experience at their core. (BOF) Retail stores no longer are spaces that are only a point of transaction measured by “sales per square foot” , but a new measurement of “experience per square foot”. Brands across the world are transitioning to a new generation of retail which invite customers to experience their world developed by creative and engaging strategies. The following project tackles the current challenge the fashion industry faces with recreating retail spaces. The case study presents comprehensive research and strategies for an exciting experience with Italian luxury house Gucci.
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E XE C U TIVE SU MMA RY As Gucci enters a new era under Alessandro Michele, the brand is witnessing a renaissance of aesthetic. This rebranding has left many questions about the future of the brand, and what it will become. Through collaboration of old versus new, GucciArcade will supply consumers with the story of Gucci while guiding them through the evolution to come. Gucci has designed a popup experience installation as an immersive experience through the eyes of Alessandro, set in the equally as extravagant Dubai Mall in the United Arab Emirates to follow corporate plans to expand the brand into tourist saturated areas. This booklet shall outline the location selection along with the process that lead to this branding opportunity for Gucci.
AB O U T G U C C I Founded in Florence in 1921, Gucci is one of the world’s leading luxury fashion brands. Guccio Gucci began the company as a small leather goods and luggage store, offering high quality products to aristocrats clients. Gucci was innovative during times when it was difficult to acquire luxury materials, using fabrics such as canvas, jute and hemp to create h andbags and luggage. His creative solutions are still used to create luxury handbags, luggage and clothing.
At the beginning of 2015, Gucci embarked on the next chapter in its history. Under the creative direction of Alessandro Michele appointed by current CEO Marco Bizzari, the introduction of a new contemporary vision is reestablishing the brand’s reputation as one of the world’s most influential luxury fashion brands. Eclectic, romantic, and above all contemporary, Gucci is currently inventing a wholly modern approach to fashion and thereby
redefining luxury for the 21st century. Through Gucci’s new direction, Kering ’s shares reached a new peak in 15 years, according to the Financial Times, and saw a 17% rise in sales over the past year (2016). Gucci is constantly changing with the current times. Alessandro Michele’s mission is to make “Gucci the 21st century statement of contemporary cool” with vintage archives and historical elements of Gucci.
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Tom Ford became Creative Director of Gucci in 1994, appointed by Dominique De Sole. By bringing his uniquely glamorous visions to Gucci, sales increased by 90%. Ford and De Sole’s vision for Gucci gave the brand the opportunity to transform itself from a single
brand company into a multibrand luxury group under PPR, now Kering group. From its humble beginnings as a small leather goods and luggage maker, Gucci expanded their offerings of products to eyewear, ready-to-wear, fragrances, time pieces, jewelry, and cosmetics.
C O R PO R AT E I N F ORM AT I ON Under Kering Group, Gucci is a brand worth 4.5 billion USD and is responsible for more than 60% of Kering ’s operating profit. CEO Marco Bizzari hopes to increase the brand’s worth by 6.5 billion USD by the end of 2016. Currently Gucci owns 525 directly operated stores globally and has a traffic of 100 million people visiting the gucci.com website.
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Gucci has an average of 10,570 employees and operates headquarters in Florence, Italy. 4 billion USD in revenue was made in 2016 with a operating profit of almost 2 billion USD. Small leather goods was the leading product category with 57% responsible for Gucci’s current revenue; following after were shoes, ready-to-wear, and other accessories. Gucci has a current outlook to continuously push their rebranding in 2016-17 throughout all aspects of the brand: from store concept to web design in order to revitalise its image and confirm the resolutely contemporary direction it has chosen.
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M A R KET ANALYS I S The global luxury goods market looks set to continue to expand in the next year, although the growth is expected to be slow. As tough global trading environments continue to prevail, the market and key luxury players face mounting risks for 2017 - social and political unrest in Asia Pacific, economic slowdown in Latin America, and conflict in Eastern Europe will conspire to restrain growth in both key emerging and developed markets. Major luxury goods markets suc h as France and Hong Kong will continue to see growth as well as large emerging markets, such as Russi a and Brazil. Although there is instability in the Middle East, it is expected to see steady growth and continue of luxury purchases and travel to this region, specifically Quatar, United Arab Emirates, and Kuwait. Hong Kong and the UAE account for the highest luxury spending among wealthy tourists as well as the highest per capita spend on luxury goods. Gucci is part of this global luxury goods market under Kering group, a French luxury goods holding company that owns Saint Laurent, Bottega Veneta, Alexander McQueen, Balenciaga, Stella McCartney, among many others.
The luxury goods market is saturated with reputable brands of great history and iconic identity as Gucci does. Louis Vuitton, Chanel, Christian Dior, Prada, Fendi, Givenchy are the six main identified competitors that have high market share and sales of luxury small leather goods. Louis Vuitton, Christian Dior, Givenchy, Fendi are under LVMH group, another French luxury holding company which made 13 billion USD in total revenue through their fashion and luxury goods with 4 billion USD in operating profit. Chanel made 5.2 billion USD in revenue, and Prada made 3.91 billion USD in revenue but still saw a fall in the US market by 9% due to fluctuating currency.
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According to Business of Fashion, “Gucci has been named the ‘hottest’ luxury brand” along with Chanel and Louis Vuitton, brands that are progressive with the current times and answer to the needs of the fast changing and trendy customer. Prada was reviewed to be losing their momentum, and in need to rethink their current strategies of marketing and product offering.
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KE Y C O M PET I TORS
LO UI S V UI TTON
Founded 1854 in Paris, France by Maison Louis Vuitton Current CEO and Chairman: Michael Burke Creative Directors: Nicolas GhesquiÃ¨re and Kim Jones Employees: 121,289 Number of Stores/Locations: 3,708
Founded 1925 in Rome, Italy by Adele and Edoardo Fendi Current CEO: Pietro Beccari Creative Director: Karl Lager feld Employees: 380
C H A NEL
Founded 1909 in Paris, France by Coco Gabrielle Chanel Current CEO: Alain Wertheimer Creative Director: Karl Lager feld Employees: 10,000
Founded 1913 in Milan, Italy by Mario Prada Current CEO: Alain Wertheimer Creative Director: Miuccia Prada Employees: 5,000 Number of Stores/Locations: 622
C H RI ST I A N DI OR
GIVE NC HY
Founded 1947 in Paris, France by Christian Dior Current CEO: Sidney Toledano Creative Director: Maria Grazia Chiuri Employees:122,736 Number of Stores/Locations: 210
Founded 1952 in Paris, France by Hubert de Givenchy Current CEO: Alain Wertheimer Creative Director: Ricardo Tisci Employees: 500 Number of Stores/Locations: 50
I N D I R E CT COM PET I TORS Armani, Burberry, Dolce & Gabbana, Versace, Lanvin, Oscar de la Renta, Tom Ford, Ralph Lauren, Stella McCartney, Roberto Cavalli, Christian Louboutin, Valentino (Base d on the l o cati o n of the p o p - u p exp e ri en c e )
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Number of Stores/Locations: 310
Number of Stores/Locations: 197
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C U R R E NT M ARK ET I NG AND C OM M UN I CAT I ON ST RAT EGIES Gucci adopts an effective advertisement policy for the promotions of the products. The advertisements in the electronic and prints media along with different advertising campaigns can help to increase the publ icity of different ready-to-wear collections. Content was once limited to offline and print initiatives, but quickly adapted to e-commerce, social media, digital marketing and integration of mobile apps to cater to a younger demographic. Gucci uses a suite of content methods, from shoppable mobile videos to usergenerated photography. The brand is heavily involved in social media such as Facebook, Instagram, and Snapchat, as well as email newsletters and website. The content is adapted to format for every environment, yet remains consistent and on-brand across its overall marketing ecosystem . A traditi onal media effort compliments Gucciâ€™s offline and online strateg y, putting the brand in front of customers no matter where they are. Facebook: 15,625,654 likes Instagram: 11.3 million followers Twitter: 3.86 million followers
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Gucci utilizes strong partnerships to help grow its digital efforts, working with partners from Hollywood to car manufacturers, to art museums and digital influencers. This empowers the brand to reach into other demographics and customer bases while maintaining its own identity and brand.
It’s proven to be a win for the company ’s digital business, helping to not just create online buzz but establish Gucci as an innovative, creative “new ” world luxury brand—despite that the company ha s been in business for nearly a century.
BR A N D AN ALYS I S B RA N D AS A P ROD UCT
BRA ND AS A PE RSON
LEATHER HANDBAGS Dionysus Bag GG Marmont Bag Slyvie Bag
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SHOES Gucci Loafers Gucci Slippers Gucci Pumps
Empowered Young Trendy Eclectic
ACCESSORIES Floral Pattern Scar f Logo Belt
READY-TO-WEAR Evening Gowns Suits
B RA ND AS A SY MBOL
BRA ND AS A ORGA NIZ ATION
FABRICS Gucci GG Canvas Gucci Vintage Web in Green/Red Stripes Gucci Flora Gucci Guccissima Gucci Diamante
CEO: Marco Bizzari
HARDWARE & SYMBOLS Gucci Interlocking G Bamboo Handle Dionysus Lady Lock
Contemporary and Collaborative
PEOPLE Guccio Gucci Tom Ford
CREATIVE DIRECTOR: Alessandro Michele Influential and Trend-setting Progressive
Italian Craftmanship Classic and Romantic GUCCI DUBAI EXPERIENCE 17
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S WOT AN ALYS I S ST REN GTH S
W E A KNESSES
Strong and iconic brand identity
Affordability and accessibility despite media buzz
Utilization of e-commerce and social media presence to attract millenial customers Global recognition and diversified geographic presence Local production in Italy (euromonitor) Actively aware in sustainable practices and strong corporate responsibility - â€œChime for Changeâ€? Positive reviews and sales potential of new brand direction Effective marketing strateg y of exclusive products Strong distribution channel network
New brand direction can look ostentatious and too kitschy for customers Removal of affordable products to upmarket brand
Wider selection of ready-to-wear available online
Accessible luxury goods with similar quality
Strengthen presence in the US
Rising labor costs in Europe
Continual deliverance of Gucci’s “new dream”
Fast paced trend cycle which can quickly outdate Gucci’s current product offering
Expanding Mens small leather goods product offering Reinforce presence in luxury markets for luxury c ustomers to increase brand recognition and growth Connecting consumers efficiently through omni-channel integration Seek the luxury travel market to incorporate new marketing strategies
Customers who would rather fashion a minimalist aesthetic The slow-death of tradtional department stores High risk in current rebranding and product offering
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O P PO RT UN I TI ES
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A R EA AN ALYS I S Based on research of tourist destination and luxury travel, Russia, Brazil, and the United Arab Emirates (UAE) were three countries that had the highest potential of the growing luxury travel market and selling of luxury goods. After much research regarding the three countries, UAE had the highest potential for the growing in the luxury market and setting new standards in luxury for the coming decade. In the Middle East, luxury travel and overall travel will grow at similar rates from 2015-202 5. In the Kuwait, Qatar, and the UAE , the overall travel market will grow by 4.4%, while the luxury market will expand by 4.5%. These nations will experience growth despite their oil-dependent economies. Their current innovation in the global luxury market demonstrated in the world-leading first class products of airlines, hotels, and recreational experiences contribute to the choice in creating a pop-up shop in this area.
Luxury goods in the UAE continued to be driven by consumers who look for supreme quality and well established brand names that are synonymous with high prestige and long term investment. Rolex, Cartier, Louis Vuitton, Dolce & Gabanna, and Gucci are major brands that lead the luxury good s sector in the UAE due to their strong brand heritage and presence. The UAEâ€™s stable economy continued to support sales of luxury goods with the industry increasing at a current value CAGR of 9% reaching AED 17.6 billion in 2015. Tourists especially from Saudi Arabia, China, Russia, and India help drive sales in luxury goods, but consumers in the UAE usually prefer to experience the item first hand through an in-store experience before committing to a purchase. A great part of the market sales were generated by designer ready-to-wear with 43%, following luxury jewelry and timepieces with 37%, and luxury leather goods with 9%.
POLITICAL Current Strengths: A prosperous country, political stability amidst regional instability, strong business confidence Current Challenges: Absence of democracy, government clampdowns Future Prospects: Strong relation with the UK Future Risks: Unresolved issues with Iran
SOCIAL Current Strengths: Mandatory health insurance, gender equality Current Challenges: Deteriorating human rights situation, low number of women per men Future Prospects: Healthcare strateg y Future Risks: Lack of freedom of expression TECHNOLOGICAL Current Strengths: Improving biotechnolog y sector, improving E commerce and Banking Current Challenges: Poor science education, rising piracy level Future Prospects: Growing market information technolog y Future Risks: Low level of intellectual property registration
LEGAL Current Strengths: Strengthening GREâ€™s corporate governance, easy tax structure, strong internal Security Current Challenges: Lack of judicial independence, lack of a proper insolvency regime Future Prospects: Center to facilitate business and attract investment,high Salaries for Expats, Bankruptcy law for SME Future Risks: Stringent legal laws
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ECONOMICAL Current Strengths: Expanding tourism sector, sound banking s ector, ongoing economic diversification and Non-Oil Trade Current Challenges: Mounting debt, property prices Future Prospects: Improving economic ties, Free trade zone Future Risks: Sustained decline in oil prices
ENVIRONMENTAL Current Strengths: Reducing ecological footprint, legislation to protect natural habitats and wildlife, proactive government on environment Issues Current Challenges: Increasing emissions levels, lack of natural freshwater resources Future Prospects: Measures to reduce water wastage, cooperation on environmental issues Future Risks: Increasing hazardous effects of desalination
STRATEGIC INITIATIVE European countries; 23% are from Arab and Iran and the rest are from America, Canada, Australia and South Africa. The diversity suggests that people speak various languages including Persian, English, Hindi, and Urdo, with Arabic being the official language. There are less females than males in UAE: the ratio is 2.18 men per woman.
PSYC HOGRA PHIC S
76% of UAE population is Muslim, and 9% is Christian. Every ninth month in the Islamic calendar is Ramadan month when Muslims conduct religious activities.
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LO C AT I O N
The UAE is located in the Middle East between Oman and Saudi Arabia. It has a total area of 83,600 sq km in land that consists of barren deserts and mountains that are in the east. The weather there is hot and dry with frequent sand and dust storms due to the desert. For the same reason, they have a lack of natural freshwater but rich with natural resources like petroleum and natural gas. United Arab Emirates is formed by seven emirates know as trucial states include the capital Abu Dhabi, Dubai, Sharjah, Ajman, Fujairah, Ras Al-Khaimah and Umm al-Quwain. Within UAE, each emirate has its own separate ruler to oversees the local government in addition to the federal president a prime minister. And they have a mixed legal system of Islamic law and civil law. Out of the seven, Abu Dhabi and Dubai are the most liberal emirates due to the development of tourism, while the others being more conservative and stricter with Is lamic law.
D EM O G RA PH I CS
The population of UAE is 5,927,482 as of July 2016, which has grown 2.47%. Dubai is the emirate that has the most population of 2.415 million. Immigrants make up 85% of the population. Among them, 50% are from southeastern Asian countries especially India and Pakistan; 8% are from western
UAE is a conservative country and portrays their conservative nature through their fashion. Men usually wear ankle length white shirts woven from wool or cotton, and women wear Abaya, a black garment that covers most of the body. Western styles can be seen on street, but it is more respectful for women to cover the body below the neckline. Public display of affection may cause trouble. Physical contact between two unrelated bodies of opposite sexes is illegal, and any intimate and romantic behaviors in public may raise problems.
SHOPPING HA BITS
Shopping is an important activity in UAE, especially in Dubai. The overall governmental strateg y is to encourage foreign and local spending in order to expand retail businesses. Emirati women have the most secretive shopping habit, with one in five keeping their shopping habits private. On average, the Emirate women spend 43% of th eir total income on shopping each month and a third of the women spend up to 60%. They see shopping as a leisure activity and treats malls as a place to relax and socialize. Malls are an experience that is hard to satisfy online. Consumers will visit malls looking for experiences that go beyond their traditional shopping. The immigrants in UAE tend to be more conservative and cautious on their
spending. They only spend 15%-16% of their income. Overall, residents like to compare both offline and online rates for more expensive purchases, and delay purchases to benefit from discounts during religious holidays. For tourists, shopping is an inherent behaviour and is a growing component of the tourism value chain. Shopping constitutes an activity on the touristâ€™s itinerary, and could be the primary motive for travel. The level of disposable income continued to grow at a robust rate of 14% from 2010 to 2015, driving high rates of consumer spending over that period.
T EC H NO LO GY
The UAE has a vision to advance in its achievements in the field of science and technolog y. It hopes to transform its economy into a model where growth is driven by knowledge and innovation.
SA LES POTE NTIA L/ A RE A STAB IL IT Y OF TRA DE The UAE has proved to be immensely resilient economically, with its favorable financial position, diverse economy, and pro-business policies, foreign investment has been extremely attractive. A continually successful combination of fiscal/ financial resources, consistent infrastructure development, and political stability will fuel economic growth into the long term. Oil is still a dependent sector, but is seeing a decline thanks in part to the phenomenal development in Dubai. Their industry sectors have shifted as non-oil sectors currently counting for 70% of the overall GDP. Abu Dhabi along with Dubai have seen significant growth in foreign trade, their development spending tops in comparison to other cities. The UAEâ€™s free trade zones have been expanded by the government so that all seven emirates can establish financial free zones. These zones provide 100% foreign ownership along with zero tax policies, but each emirate has the ability to adopt their own unique strateg y.
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As of 2015, there are 17.943 million mobile phone users in the UAE including tourists. There are 5.274 million internet users which are 91.2% of the total population. Dubai set up a free zone such as Dubai Internet City to support technolog y companies in the UAE and boosts technological advancements and economic growth in the UAE and the Middle East. The large amount of mobile phone users increased the preference of making mobile payments; 57% of online shoppers in the UAE purchased online via mobile device in the past year.
Productivity and competitiveness will come to rival the best in the world, as a result of investment in science, technolog y, research and development throughout the fabric of the UAE economy where businesses form effective partnerships.
T H E A REA / LOCATI ON JU ST I FI C ATI ON
Dubai is the 4th most visited location in the world, and the 2nd most visited city behind London. In Dubai, the Dubai Mall is the biggest mall in the world, and there are over 10 new malls in the pipeline in Dubai. The mall itself had 80 million visitors in 2015 and reported to be the most visited shopping mall worldwide for 4 years. Malls in the area serve as tourist attractions as they have come to be promoted in tourism products and brochures by local marketing organizations, and this contributes to the local economy.
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A REA AT T RACTI ON S
Dubai has many attractions to offer, from recreational, to architectural and manmade islands, to religious. Wild Wadi Water Park, Dubai Creek Golf Course, Dubai Zoo, Universal Studios Dubailand, Palm Islands, The Emirates Tower, Grand Mosque, and the Dubai Design District are few of the many attracti ons listed. Just in the Dubai Mall alone has attractions like the At the Top Burj Khalifa, SEGA Republic, Dubai Fountain, and the Dubai Aquarium.
A REA FACTORS
Pedestrian Traffic Dubaiâ€™s lack of walking friendly zones has sparked a movement. The cities busy traffic paired with a lack of convenient crossings have made life for those who travel by foot especially difficult. Pedestrian bridges have provided the much needed solution. The biggest of these projects is a AED 120,000,000 sky bridge that will soar over one of the busiest intersections, connecting Al Khail Road to Financial Centre Road. This will also have access to the parking terminal attached to the new Dubai Mall Expansion. Public Transport Besides cars, the metro is the top resource for transportation to dubai. The current system includes over 421 km Metro-Tram Network. The Dubai mall is currently hosting two busses that service the mall every 15 minutes from two popular bus stations. Mainly serving tourists, this service has a specifically set aside area for
easy access. Due to the weather conditions and the continually crowded Metro system, many locals prefer to use their personal car for transportation. Directions are provided from the Dubai Mall to best guide visitors through rough traffic areas. Upon arrival, the mall itself has a private lot of over 14,000 spots. Vehicular Transportation / Parking Beyond the bus service, the Dubai Mall provides valet parking, a taxi service, trolley, Metro tickets, and a private club car membership to serve the average 200,000 daily visitors. Infrastructure Among the benefits of the Dubai infrastructure are highly developed transportation services, a free enterprise system, sophisticated financial as well as services center, high quality accommodations for residents and visitors alike, and first class services. Their commitment to continually development also includes an array of destinations beyond their world famous malls, such as hotels and restaurants. Residents can enjoy world class logistical facilities, conference centers, and advanced industry sectors for business along with no shortage of schools, hospitals, and universities.
LE GA L ISSU ES
The Dubai Mall is owned and operated by Emaar Properties. Since the mall is currently at 95% capacity, there is currently a waitlist of 4,000 businesses to rent within the mall. Emaar requires that each business who operates within the mall comply with the federal laws business activity, which includes, the Commercial Companies Law, Registration Law, Agencies Law, and codes. Building Emaar is not allowed to sponsor any visas for for businesses, those will be handled by the leasing companies. A leasehold property defined by the parent company is one that is is a property that is leased out by Emaar Properties to a Lessee for a specific period of time. The sales agreement specifies an estimated completion date for construction and allows the Vendor the right to reschedule
the completion date within certain time limit beyond the Estimated Completion Date whereby the Vendor can delay the Completion of the project. During any sort of construction, modification to any existing property is not allowed, unless discussed prior. Every rental space is required to have a mortgage. This mortgage must be registered with Emaar Properties with all mortgaged properties requiring registration. A registration fee as of date payable to Dubai Land Department is 4% of the contract value along with a nominal fee of AED 5,000 is charged for registration of the mortgage.
Trade Regulations The Dubai Mallâ€™s parent company requires a valid, professional trade license to be issued from the department of economic development that should be available at any given time. Each individual emirate within the UAE has their own personal control over regulatory powers that covers commercial activities such as issuing of trade licences and the incorporation of
Payment Rent for the Dubai Mall averages AED 6,000 per square foot per year, rising at an average of 7% per year. Utility payments can be made through a variety of methods - smart phone applications, online, text message, one of the many service centers, or even through direct mail.
HU MA N RESOU RC ES
Employee breakdown The pop up experience employee structure will begin with a head manager that will oversee all of branding and the market strateg y for the space. They will be personally selected from Gucci corporate headquarters to work during the pop up experienceâ€™s duration. Their travel expenses will be covered by Gucci and their salary shall cover his or hers pay. Below them will be a assistant manager, whose role will be to manager financial operations. The assistant manager shall be an employee of Gucci Dubai, to ensure a local to the area can supply input for the space. Each room for the shop will be required to have at least one associate present to aid customers. The Gucci Customization room will have one additional employee to handle projected higher traffic. The arcade center will require only one employe present. An Amusement Technician will be require too overall all equipment and machinery before and after store hours. During operatio nal hours, they will be on call to solve any technical issues. To ensure safety, two security officers will be present at the pop up space during any shift.
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Health and Safety According to Emaar Properties, the following are basic regulations for any lessee: carpets of any sort are not allowed, the building shall be well maintained, and the floors, walls, ceilings,stairs, doors and elevators should be free from defects and always kept clean, ventilation and lighting should be sufficient in all sections, all cleaning staff should get valid occupational health cards issued from Dubai municipality, staff must wear issued uniforms during work hours & should be kept clean, a changing area must be provided for all staff to prepare for their shifts, personal hygiene for the staff should be maintained & unavoid all unhealthy pract ices, first aid box shall be provided with all required first aid items and should have at least 2 well trained staff as emergency rescuers, leisure areas must be cleaned once a day, smoking is prohibited in all sectors (but designated areas should be provided outside), and any sort of cinema must expose awareness procedures for all visitors in at least English and Arabic.
corporate entities, where the activity is not already regulated under federal legislation. If any goods are intended to be exported, it it highly suggested to appoint an agent, distributor or franchisee, which must be either a UAE national or a company entirely owned by UAE nationals. Within the free trade zones, no national agent is required for branch offices of foreign companies, there are no customs duties on imports and re-exports (except re-exports into onshore UAE), and there are guaranteed exemptions from corporate taxes.
C H O I C E O F LOCATI ON
Within the Dubai Mall is a circular area called the Fashion Catwalk, a space surrounded by luxury and high fashion retailers, incl uding the existing Gucci store at the location. Multiple brands have used this area for pop-up events as well as local designers and high fashion magazines using this space for runway shows. Located on the ground floor from which customers enter, this area attracts a lot of customers and is large e nough to facilitate our pop-up experience.
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C O NC EPT JUSTI F I CATI ON
Through the cinematic, surreal campaign that is Gucci’s Fall/Winter 2016 current advertisement, the eyes are lead through a journey through the neon lit streets of Japan nightlife. Models were dancing through various locations, including tea houses, parlors, and a slot machine filled arcade. The released campaign film sent viewers into a Gucci dreamland. Many questions surrounding Gucci’s new direction under Alessandro Michele were answered through this campaign. The goal of our pop up shop was to go beyond shopping, and fully embrace the experience which embodies the new Gucci. The color ful imagery and lighthearted atmosphere of the campaign became the inspirational catalyst for the store instillation.
DAT E J U ST IF I CATI ON
Dubai typically has two seasons - hot and hotter. High temperatures drive most locals and visitors alike to travel in a ir conditioned vehicles and spend a ma jority of their time indoors. The key travel period from November to April is when weat her
begins to cool down. Travelers worldwide take advantage of the change to enjoy various festivals or visit popular beaches. January is the peak month, for this is when the year ’s most popular attraction, The Dubai Shopping Festival, is held. As the largest festival of its kind, it brings immense hoards of tourists to the various supermalls around Dubai. The Dubai Mall still holds the top spot for tourist appeal since it offers far more than retail therapy - visitors can ski, skate, and even swim while sampling the thousands of retailers available. To capitalize on key tourist season, festival attraction, and experience, January was the pivotal month to o pen our pop up installation.
TE C HNOLOGY
Multiple innovative technolog y services will be used in the GucciArcade space. Ubi Software Technolog y enables projection screens to become touch interactive. This software will be used in conjunction to Lumo Software in our interactive touch screen Gucci Ghost game room. Lumo Software also enables projections to become touch interactive from projecting on to the floor. Wall projectors and touch screen displays will be used in a pattern projection room for customers to select and create patterns and project them on the walls of the room. Touch screen displays will also be used in the customization room for customers to create a bag of their own digitally. Flatscreen displays will be used on the outer walls within the space to play previous campaign videos and runway shows.
Th e D ubai Mall Flo o rpl an of Gro u nd Fl o o r - re d area id e nt if ies t h e a rea of pop-up ex pe r ie n c e
D U BA I TA RG ET M ARK ET
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Suzan Kingston (27 years old) Beauty Consultant and Blogger in London, United Kingdom Graduated from Royal Holloway University of London with a degree in English Literature and Writing Earns $80,000/year Lives in Shoreditch in a studio apartment with her Persian cat Mimi Suzan loves traveling and documenting her travels through diary entries Adventurous, free-willed, sociable, and fun personality Travels to Dubai often for business t rips and freelance consulting with brands
Elie Kroeger and Hussain Obiero (30 years old and 33 years old ) Elie: a menswear blogger and interior designer currently working at a design firm located in New York City. Earns $90,000/year Hussain: a business consultant and freelance fashion editor for fashion magazines produced in Dubai, London, and Berlin. Earns $100,000/year Elie and Hussain are college friends from the Royal College of Art in London, United Kingdo m Elie visits Dubai for leisure activities with Hussain and a lso for business projects for clients Hussain travels to Dubai to attend events at the Dubai Mall and the Mall of the Emirates Both share personalities of being loud and passionate, but seem reserved toward unfamiliar people
Usman Ra hal (31 years old) Freelance software developer living in Dubai, UAE Graduated from University of Dubai, BS in Computing and Information Systems (with a Concentration in Information Systems Security) Earns AED 361085.34/ year (equivalent to $98304) Enjoys the finer things in life as a single man Remembered and known for his confident and focused attitude Visits the Dubai Mall to shop with family and friends, as well as meet with current clients
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Amal Bishara (26 years old) Works as a marketing manager at Sorouh Real Estate Graduated from the University of Wollongong in Dubai, UAE Bachelor of Commerce: Marketing Earns AED 456,789/ year (equivalent to $124365.71) Extremely detail oriented Lives in 3 bedroom condo with her husband of 2 years and 1.5 year old daughter, Mariam Loves to visit the Dubai Mall during the weekend with her family in their family car Enjoys splurging on designer handbags and accessories Describes her fashion as classy and chic
F I N A L D ES I G N
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The GucciArcade pop up experience is 4000 sq ft with a lobby area that contains a mini arcade, resting area, and a prize wall that acts as our indoor visual display. After the lobby area is the three rooms that showcase th e experiences: a projection room that allows customers to customize Gucci patterns and project them to the walls of the room, a Gucci ghost interaction room that allows visitors to catch a Gucci ghost through motion sensor technolog y within the projector, and a customization room that allows visitors to customize a limited edition Dubai GucciArcade bag that is able to be ordered for purchase or saved and shared on social media. AMBIANCE The overall ambiance of the GucciArcade is dim, with the rooms only lit by the projectors within each space.
GucciA rcade Flo o r P l an
VISUAL DISPLAY The visual display of the pop-up experience space will have custom arcade machines, a prize wall that will display Gucci bags and other merchandise, a custom Gucci Camel in a Gucci pattern, a vending machine that holds Gucci mystery boxes, and custom furniture such as cushion seats and ottomans in the lobby area. OBJECTIVES The goal of this initiative is to encourage Gucciâ€™s new story and brand direction through a memorable experience #GucciArcade. The objectives is to increase social media following, increase foot traffic to the Gucci Dubai Mall location, drive sales of the exclusive customizable handbag, and gain global media attention.
G ucciA rcade Custo m i zati o n Ro o m
GUCCI DUBAI EXPERIENCE 31
G ucciA rcade E x te ri o r
GUCCI DUBAI EXPERIENCE 32
G ucciA rcade Proj e c ti o n Ro o m
G ucciA rcade Guc c i g host I nte rac ti o n Ro o m
G ucciA rcade Lob by Ang l e 2
GUCCI DUBAI EXPERIENCE 33
G ucciA rcade Lob by Ang l e 1
GUCCI DUBAI EXPERIENCE 34
G U C C I M YST ERY BOX Gucci Mystery Box is sold through a Gucci vending machine in the GucciArcade. It contains handpicked Gucci products ranging from per fumes, lipstick, and nail polish set to headband, scar f, key chain and patches. It is called a “Mystery Box” because customers will not be aware of the product inside the box before the purchase. A game on its own, the mystery box delivers a surprise and requires a bit of luck. It is priced at 327 USD and 1200 AED, but the object value within the boxes could worth more than expected. One may get a box with a mix set of beauty products, four of our signature patches, or a silk scar f with a retail value of 465 USD. The vending machine is worth a try to test one’s luck and find out what is inside.
GUCC I M YSTE RY B OX 327 U S D/ 1 2 00 AE D p e r o n e
FR AGR ANC E FOR WO M EN
M AT T E L I PST I C K
M AT T E L I PST I C K
68 USD / A E D 250
75 U S D / AE D 276
39 U S D / A ED 14 3
4 0 U S D / A ED 147
NAI L POLISH SE T
GU C C I GHOST S HAW L
G U C C I G H O ST S C A R F
G A R D EN S I L K S C A RF
79 U SD / A E D 29 0
42 0 U S D / AE D 1 543
4 6 5 U S D / A ED 170 8
4 6 5 U S D / A ED 170 8
GUCCI HE A DBAND
G U C C I K EY C H A I N S
375 USD / A E D 1 378 eac h
370 U S D / A ED 1 3 59 eac h
GU C C I PATC HES 90 U S D / AE D 330 eac h
GUCCI DUBAI EXPERIENCE 35
F RAG R A N CE FOR ME N
GU C C I A RC A D E D I S PLAY D ETAI LS
GUCCI DUBAI EXPERIENCE 36
All visual display materials will be customized to fit the experience of the world of Gucci. Game machines, prize wall, and television screens will reflect the brand of Gucci and be an effective contribution to the atmosphere of GucciArcade.
P RO M OT I ON A L PLAN GucciArcade plans to open for approximately four weeks at the Dubai Mall. The communication and promotion plan runs a total of three and a half months, with two months of pre-launch, on e month of the actual launch and half a month of post-launch. The plans include Omnichannel marketing strategies, press kit for traditional media outlets, Print advertisements placed in the chosen location, and the launch party event.
L AUN C H PA RT Y
Facebook, Instagram and Snapchat are the three main social media platforms Gucci will utilize during this event. Pre-launch, Gucci will post #GucciArcade related contents once per week. On the day of the launch party, GucciArcade snapchat geo-filters will be live at the location within the pop-up space. During the month of the actual launch, Gucci will post once per day with photos that highlight the visitors at the GucciArcade and feature new designs visitors created from the pattern projection room and customization room. For the post-launch, Gucci will post twice per week to recap the GucciArcade in Dubai.
The PR kit is the one page of summarized information about the event and pop-up experience that will go out to the media and press in order to gain attraction and anticipation for the launch.
GUCCI DUBAI EXPERIENCE 37
The launch party is an exclusive event for invited editors, celebrities, brand ambassadors, collaborating artists, models in previous campaigns, select bloggers, and press to experience the GucciArcade before the public. “Gucci Snacks” that consist of branded signature desserts and food will be served to guests during this event. Photo props with Gucci designs and #GucciArcade written on them will be offered to be used throughout the night for guests to engage in social media and remember their night of fun. The goal of this event is to strengthen the relationships with existing Gucci customers and increase the following of the brand. Because this is a promotional event, Gucci aims to receive as much media attention as possible and create “internet buzz”.
SOC IA L ME DIA
P RO M OT I ON AL PLAN P R E - L AU NC H
L AU N C H
PO ST-L AU N C H
1 6 ,0 0 0
I NSTAGRA M
1 6 ,0 0 0
2 3 ,971
1 6 ,0 0 0
4 5 ,0 0 0
MAGA Z IN E
2 ,1 0 0 ,0 0 0
1 6 ,0 0 0
91 ,0 0 0
LAU NCH PA RTY
36 ,73 0
P RESS RE LE ASE
3 ,6 0 0 TOTA L: 2 ,36 4 ,3 0 1
OP E R AT I O N A L PLAN P R E - L AU NC H
L AU N C H
PO ST-L AU N C H
F LOOR DE CA LS
1 0 ,1 0 0
A RC AD E MACHIN ES
91 ,83 5
9 6 ,5 0 0
14 6 ,92 0
73 ,4 6 0
RE N T
24 ,0 0 0 ,0 0 0
H R WAGES
1 6 9 ,4 0 0
T R ANSPO RTATION
36 ,2 56
26 ,2 2 0 TOTA L: 3 ,0 5 0 ,6 91
SA L ES F ORECAST
W EEK 1
W EEK 2
W EEK 3
W EEK 4
1 ,4 0 0 ,0 0 0
1 ,4 0 0 ,0 0 0
1 ,4 0 0 ,0 0 0
1 ,40 0 ,0 0 0
% of Conve rs i o n Traffi c /Fal l
0 . 0 07
0.0 0 6
Fo otfal l
9 ,8 0 0
8 ,4 0 0
7,0 0 0
8,4 0 0
C o nv. %
0 .0 5
3 ,6 0 0
2,4 0 0
2,4 0 0
3 ,6 0 0
1 ,76 4 ,0 0 0
8 0 6 ,4 0 0
672,0 0 0
1 ,51 2 ,0 0 0
70 5 ,6 0 0
26 8 ,8 0 0
6 0 4 ,80 0
1 ,0 5 8 ,4 0 0
4 8 3 ,8 4 0
4 0 3 ,20 0
9 07,2 0 0
70 5 ,6 0 0
26 8 ,8 0 0
6 04 ,80 0
Myste ry Box AE D 1 , 2 00 ( U ni ts )
Cu sto mize d Bag A E D 1 ,745 ( U ni ts )
Locatio n fo ot traffi c p e r we e k
Ave rage Bas ket ( AE D) Total Reve nu e ( AE D) C O GS ( AE D) P RO DU CTS Myste ry B ox ( AE D) ( 60% )
TOTAL M yste r y B oxes : 2,377 TOTAL C ustom Bags : 1 ,0 9 0 TOTAL RE V E N U E ( AE D ) : 4 ,754,4 0 0 TOTAL C O G S ( AE D ) : 1 ,9 0 1 ,76 0
P ROF I T & LOS S STAT EM EN T ( AE D) TOTAL OPER AT I ONA L C OSTS : 3 , 05 0, 691 TOTAL PROMOT I ONA L C OSTS : 2 , 364, 3 01 TOTA L R E V E NU E : 4,754,400 TOTA L C OGS : 1 , 901 ,760 TOTA L P ROFI T: 2 , 8 52 , 640 TOTA L LOS S : ( -2 , 562 , 352 )
The GucciArcade initiative is at a loss of AED 2,562,352 after subtracting the total operational expenses and promotional expenses from the total revenue. Although it ends up as a loss, the effect of the GucciArcade pop up experience will be an unforgetable event that people will enjoy and increase customer relationships.
GUCCI DUBAI EXPERIENCE 39
Custo mize d Bag ( AE D) (40% )
GUCCI DUBAI EXPERIENCE 40
RE F E R E N C ES “A b o u t G uc c i. ” G uc c i. N . p. , n.d . Web. 26 Oct. 2016 . A g n ew, Ha r r iet, a nd Rac he l S an d erso n . “Gu cci Fash io n s Its Reinvent i on i n S ty l e. ” F ina nc ia l tim es 28 Oct. 2016 . Web. 8 Nov. 2016 . A r i ent i , Patr izia . “G loba l Powers of Lu xu ry Go o d s 2016 .” 2016 . Web. 8 N ov. 2 0 1 6. “ Bags an d Lug gage in the Un ited A rab E mirates.” 20 S ept. 2016 : n . pag. P r i nt . “C h an el . ” Cha ne l. N. p. , n.d. Web. 20 Oct. 2016 . “C o m pany Ove r view. ” 201 5 : n . pag. Print. “C o n s u me r Le nding in the Un ited A rab E mirates.” 12 Oct. 2016 : n . pag. P r i nt . “ D u bai I nfra str uc ture. ” Vis it Du bai. N.p., n .d . Web. 8 Nov. 2016 . “ D u bai Ma ll G ets 8 0m Vis itors in On e Year.” Th e A rab ian Post. N.p., Ap r. 2 0 1 6 . We b. 8 N ov. 201 6. D u bai : L i ve. Wor k . Explore. Exp lo rer Pu b lish in g & Distrib u tio n , 2006 . Web. 8 Nov. 201 6. “ D u bai : Wor ld-Cla s s I nfra str uctu re an d a Glo bal Hu b fo r Trad e, Tran sp o r t , an d Tour is m . ” For bes Magaz in e: Fo rb es Cu sto m. Web. 8 Nov. 20 16 . “ Em aar Ma lls G roup PJSC a nd Its S u bsid iaries.” 31 Mar. 2016 . Web. 8 N ov. 2 0 1 6. “ Em aar P rope r ties . ” Em a a r Pro p erties. N.p., n .d . Web. 8 Nov. 2016 . Fen n el l , Kate. “ Wome n’s Shopp in g Hab its In Du bai Revealed .” E mirates Wo m an 4 Apr. 201 6. We b. “ F i n an c i a l Ca rds a nd Pay me nts in th e Un ited A rab E mirates.” 12 Oct. 2 0 1 6 : n . pag . P r int. Fran c i s , Sne ha . “Pe destr ia n B rid ge fo r Du bai’s Al Nah d a Resid ents.” Em i rates N ews 24 /7 3 0 Ma r. 2016 . Web. 8 Nov. 2016 . “Gi ven c hy H istor y. ” G ive nc hy. N.p., n .d . Web. 27 Oct. 2016 . G o u vei a, Alexa ndr ia . “ T he D ubai Mall Of fers Best S h o p p in g E xp erience I n t h e Wor ld. ” Em irates Woman 10 A p r. 2016 . Web. 8 Nov. 2016 . “Gover n me nt of D uba i. ” G overn ment of Du bai Department of E co n o mic D evel o p me nt. N . p. , n.d. We b. 8 Nov. 2016 . “Gu c c i I n for m ation G uide. ” Yo ogi’s closet. N.p., n .d . Web. “Gu c c i : A H istor y Les s on. ” 23 Feb. 2011. Web. “Gu i d an c e : D oing Bus ines s in th e UA E : UAE Trad e an d E xp o rt Gu id e. ” 2 1 D ec . 2 0 1 5 . We b. 8 Nov. 201 6. “ H eal t h Re quire me nts for Sh o p p in g Malls an d Centers.” 2010. Web. 8 N ov. 2 0 1 6. H i l l , R h o nda . “D uba i - T he Road to a Fash io n E cosystem.” E d ge Market . N . p. , 4 N ov. 201 5 . We b. 8 Nov. 2016 .
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“ Lu m o P l ay I nte rac tive Software.” Lu mo Play S of tware. N.p., n .d . Web. 2 N ov. 2 0 1 6. “ Lu xu r y Goods in UAE. ” n. pag. Print. “ LV M H Compa ny Ove r view. ” Lo u is Vu itto n Mo et Hen n essy. N.p., n .d . Web. 2 0 O c t. 201 6. “ M et h o d s of Pay me nt. ” G overn ment of Du bai E lectricity an d Water Aut h o r i ty. N. p. , n.d. We b. 8 Nov. 2016 . M i l l er, S tua r t. “Op-Ed - D is r uptin g th e Mall.” Bu sin ess of Fash io n 4 O ct . 2 0 1 6 . We b. 8 N ov. 201 6. Peter, S a nge eta . “D e c onstr u ctin g th e S h o p p in g E xp erien ce of To u rist s to t h e Duba i Shopping Festival.” Cogent Bu sin ess & Man agement 3.1 ( 2 0 1 6 ) : n . pag . We b. 8 Nov. 2016 . “ P rad a. ” P rada . N. p. , n.d. We b. 1 Nov. 2016 . S attel , J u lia . “Sha ping the Fu tu re of Lu xu ry Travel: Fu tu re Traveller Tr i b es 2 03 0. ” We b. 8 Nov. 2016 . “ S c i en c e a nd Te c hnolog y. ” T h e Of f icial Po rtal of th e UA E Govern ment . N . p. , n .d . We b. 8 N ov. 201 6. S i n d i n g , Ada m. Le 21 e me. N. p., 2016 . Web. 2 Nov. 2016 . S tot h ard, Mic hae l, a nd N ath alie Th o mas. “Kerin g S h ares Hit 15- year H i g h as G uc c i Sa les Clim b 17 %.” Fin an cial times 26 Oct. 2016 . Web. 8 N ov. 2 0 1 6. “ T h e Du ba i Ma ll. ” T he D uba i Mall. N.p., n .d . Web. 8 Nov. 2016 . “ Traffi c to D uba i Ma ll to Ea s e with New Brid ge.” Kh aleej Times 3 Jan. 2 0 1 6 . We b. 8 N ov. 201 6. “ U b i I nte rac tive Softwa re. ” Ub i S of tware. N.p., n .d . Web. 8 Nov. 2016 . U pad hyay, Ritu. “D uba i Ma lls E xpan d S ap ce, S ervices.” Wo men’s Wear Dai l y 3 Aug . 201 6. We b. 8 Nov. 2016 .
APPE NDIC ES H E EJ U NG K I M
DANA C AR I EL LO
C AT H ER I N E BAT R ES
T I A N YI WA N G
P ROFES S O R AL ES SANDRO C A N N ATA FAS M 4 3 0 PO P U P EX P ER I EN C E D U BA I
APPENDIX A G U C C I I N D EPT H H I STORY Influential, innovative and progressive, Gucci is reinventing a wholly modern approach to fashion. Under the new vision of creative director Alessandro Michele, the House has redefined luxury for the 21st century, further reinforcing its position as one of the world’s most desirable fashion houses. Eclectic, contemporary, romantic— Gucci products represent the pinnacle of Italian craftsmanship and are unsurpassed for their quality and attention to detail. 1921: Guccio Gucci opens his first stores in Florence on Via Vigna Nuova and then Via del Parione 1935 to 1936: As a result of a League of Nations embargo against Italy, Gucci finds alternatives to imported leather and other materials. It develops a s pecially woven canapa, or hemp, from Naples, printed with the first signature print — a series of small, interconnecting diamonds in dark brown on a tan background. Gucci’s first successful suitcases are made from it. 1947 to 1948: Production of leather goods resumes after World War II. Aldo Gucci introduces the pigskin, which becomes a signature house material. The first bamboo-handled bag, inspired by the shape of a saddle, is thought to be produced in this period 1951: Gucci opens the first Milan store, on Via Montenapoleone. Around this time, the green-red-green web becomes a hallmark of the company. 1953: Gucci becomes a pioneer of Italian design in the U.S. when Aldo opens the first American store in the Savoy Plaza Hotel on East 58th Street in New York. Guccio Gucci dies at age 72, 15 days after the New York store opens. The Gucci loafer with metal horsebit is created. 1955: The house’s crest becomes a registered trademark
1960: The New York store moves to a Fifth Avenue address next to the St. Regis Hotel at 55th Street. 1961: Stores open in London and Palm Beach. The bag that Jacqueline Kennedy is seen with is renamed the Jackie. Around this time, the GG logo is applied to canvas and used for bags, small leather goods, luggage and the first pieces of clothing. 1963: The first Paris store opens. 1966: The Flora scar f print is designed for Princess Grace of Monaco. 1968: Gucci opens in Beverly Hills 1972: A store opens in Tokyo. Around this time, the brand is hitting its fashion stride. A store dedicated to clothing opens at 699 Fifth Avenue in New York, while 689 Fifth Avenue focuses on shoes, bags, luggage and accessories. 1974: A flagship opens in Hong Kong. 1975: The first fragrance launches 1981: Ready-to-wear parades for the first time at the Florentine fashion shows at the Sala Bianca, playing heavily on the Flora print. 1982: Gucci gets the legal SpA designation; leadership eventually passes to Rodolfo Gucci. 1985: The iconic loafer is displayed at the Metropolitan Museum of Art in New York and becomes part of the permanent collection 1989: The Anglo-Arabian holding company Investcorp purchases 50 percent of Gucci shares. The fund lures Dawn Mello, then president of Bergdor f Goodman, to revitalize the brand. She brings Richard Lambertson, head of Bergdor f ’s accessories department, to be design director. 1990: American designer Tom Ford is hired to oversee women’s rtw. 1993: Maurizio Gucci transfers his shares to Investcorp, ending the family ’s involvement in the firm 1994: Tom Ford is appointed creative
director. His first collection, for fall 1995, focuses on jet-set glamour and is a critical and commercial success, putting the label back at the forefront of fashion. 1995: Domenico De Sole, previously chief executive officer of Gucci America Inc., is appointed Gucci Group’s ceo. He immediately begins reining in licenses, franchises and secondary lines to reverse a decade that saw overexposure of the brand and cheapening of its image Maurizio Gucci is gunned down by a hit man commissioned by his ex-wife, Patrizia Reggiani 1996 to 1997: Ford’s collection of white cutout j ersey dresses fastened with abstract horse-bit belts sets the sleek, sexy, modern style of the house’s look in the Nineties and establishes it as a brand dedicated to evening glamour — and con sequently attracts hordes of Hollywood actors and actress. 1999 to 2000: The Jackie bag relaunches in many colors and variations, t riggering a huge and sustained response. It opens the era of the Gucci “It” bag. The company weathers a hostile takeover bid by LVMH Moët Hennessy Louis Vuitton chief executive Bernard Arnault. It is ultimately saved when white knight François Pinault of strategic investment firm PPR (known as Pinault Printemps Redoute at the time) starts amassing a portfolio of luxury brands 2002: Frida Giannini, previously handbag designer for Fendi, joins the label’s accessories department, contributing bold reinventions of house sign atures as part of Ford’s design team. 2004: Ford and De Sole leave the company when they and parent PPR fail to come to terms over a new contract. John Ray takes over men’s design; Alessandra Facchinetti takes women’s, and Giannini becomes creative director of accessories
Robert Polet, the head of Unilever ’s $7.8 billion frozen-food division, trades ice cream and fish sticks for handbags and stilettos as the new ceo of Gucci Group. Mark Lee, ceo of PPR-owned Yves Saint Laurent, is named Gucci brand chief. 2005: Giannini is appointed creative director of women’s rtw following her successful relaunch of the Flora print as a bag collection. A year later, she adds the role of creative director for men’s wea r 2006: The Ginza flagship opens in Tokyo, and the Landmark Hong Kong flagship opens. 2007: The first TV ad campaign runs. It is for the Gucci by Gucci fragrance and is directed by David Lynch. 2008: Gucci opens the New York global flagship in Trump Tower on Fifth Avenue. The company celebrates with an event co-hosted by Giannini and Madonna — “A Night to Benefit Raising Malawi and UNICEF.” The renovated Rome flagship is reopened. During the celebration for the 70th anniversary of its Roman store, the 2009 cruise collection show is livestreamed on the Web site. Gucci by Gucci Pour Homme, the first men’s scent created by Giannini, makes its debut with actor James Franco starring in the ad campaign. The house also renews its eyewear licensing deal with Safilo until 2018. 2011: The company prepares to celebrate its 90th anniversary Currently Gucci is in the rebranding process under creative director Alessandro Michele and CEO Marco Bizzari.
APPENDIX B KE Y S U C C ESS FACTORS (K S F) & C OMPANY PROFIL E ICONIC, TRUSTED BRAND INVESTMENT IN INFRASTRUCTURE LOCATION OF HIGHEST FOOT TRAFFIC QUALIT Y SERV ICE IN STORE EXPERIENCE QUALIT Y PRODUCTS SENSE OF STATUS COMPANY PROFILE Gucci is a worl d leading luxury fashion house owned by Kering Group, a French luxury goods holding company that also owns Alexander Mcqueen, Stella McCartney, Balenciaga, Bottega Veneta, Saint Laurent Paris, etc. among luxury brands, and Puma, Volcom, and Cobra among sportswear brands. Gucci designs, manufactures, and distributes most of their products, and their headquarters is in Florence, Italy, where the brand first began. Starting with leather goods that entail handbags, accessories, and luggage, the brand expanded their product category to shoes, ready-to-wear, silk scarves, timepieces, jewelry, cosmetic s, fragrances, and eyewear. 33. 6% of total revenues from Kering came from Gucci in 2015, earining $4,325.7 million. For Gucci, prices for products range from $28 to $41,500, their lowest price being their beauty products, and their highest price being their luxury leather goods. Listed on the right are the prices for each product category offered in Gucci stores all across the world.
WOMEN Handbags $780-$41,500 RTW $450-$37,000 Shoes $270-$2,480 Accessories $70-$9,980 MEN Bags $590-$41,500 RTW $540-$15,980 Shoes $175-$3,100 Accessories $115-$1,500 CHILDREN Baby $45-$1,490 Girls $65-$2,350 Boys $65-$2,350 JEWELRY/ TIMEPIECES Fine $390-$15,950 Fashion $160-$1,750 Silver $125-$1,950 Watches $495-$8,600 FRAGRANCE Mens Fragrance $68-$134 Womens Fragrance $72-$200 MAKEUP Eyes $28-$65 Lips $32-$42 Face $44-$79 Nails $29
APPENDIX C CO R POR AT E ST RUCT URE
S H AREH OL DE RS OF KE RING GROU P
K ERI NG BOA RD OF DIRE CTORS
CEO : MARC O BIZZA RI (EXEC U TIVE C OMMITTE E)
BOARDâ€™S C OMMITTE E
G EN E RA L MANAGE ME NT (M ANAGING DIRE CTOR )
AS S I STANT MANAGING DIRE CTOR
CR E ATIVE DIRE CTOR (ALESSA NDRO MIC HE L E)
APPENDIX D P EST L E A N ALYS I S F OR OT H ER POTE NTIA L C OU NTRIES Based on research of tourist destination and luxury travel, Russia, Brazil, and the United Arab Emirates (UAE) were three countries that had the highest potential of the growing luxury travel market and selling of l uxury goods. After much research regarding the three countries, UAE had the highest potential of growing in the luxury market and setting new standards in luxury for the coming decade. Below is the PESTLE information regarding the analysis of the countries Brazil and Russia.
RU S S I A
PO LITICAL Russia ranked in the 18.96 percentile on voice and accountability in 2013. Voice and accountability measures the extent to which a country â€™s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and the availability of free media. Russia ranked very low due to its closed and controlled attitude toward the press. In comparison, China ranked in the 5.21 percentile in 2013. Stronger trade and investment relations with China may soften the impact of western sanctions. Current Strengths International Integration, Open budget Current Challenges Strained relations with the west Future Prospects Strong Russia-China relations Future Risks Terrorism, Pressure from bureaucracy ECONOMIC The depreciation of the rouble due to capital outflows; supplemented by counter sanctions imposed by Russia on western food imports (August 2014) has raised inflation, especially food inflation. The rouble lost its value by a quarter in the three months to November 2014, which raised import
prices. In October 2014, Standard & Poor â€™s affirmed the BBB- rating while retaining the negative outlook on the economy. The present rating is one notch above the junk status and on par with Brazil and South Africa. S&P cited strong foreign exchange reserves (around $400 billion as of November 2014) for retaining the rating, which it has given it in April 2014. Many critics thought that S&P would cut the rating to junk status in the latest revision. Current Strengths Oil and gas reserves Current Challenges Rising inflation, Containing capital outflows Future Prospects WTO Accession Future Risks Declining oil and gas revenues in the long term SOCIAL The government has been reducing education and healthcare spending due to redistribution of budget expenses towards defense and security. The Global Gender Gap Report by the World Economic Forum quantifies the magnitude of disparities on the basis of gender and tracks the progress over time. According to the 2014 report, Russia has been ranked 75th out of 142 countries. Although, the country is ahead of China (87th) and India (114th ), it is behind countries like Nicaragua (6th), Germany (12th), and the US (20th). Current Strengths Declining poverty rate, Controls on alcohol abuse Current Challenges Gender gap, Plight of the migrants Future Prospects Measures to control tobacco consumption Future Risks Democratic challenges, Crackdown on civil society, War possibility
TECHNOLOGICAL Russia, known for its excellence in space technolog y, has one of the most successful national space programs. For many years, Russia has per formed badly in terms of registering patents for the technolog y it develops. In 2013, just 417 patents were registered; this is particularly low when compared to the US, which registered 1,33,593 patents during the same year. Current Strengths Strategi c partnership in nanotechnolog y Current Challenges Poor per formance on patents, Weak science and technolog y systems Future Prospects Partnership with China in the development of military technolog y Future Risks Piracy and poor infrastructure LEGAL Among the BRICS countries, Russia has one of the least regulated product market. Product market indicators are a set of metrics that measure the extent to which policies framed by the government promote or inhibit competition in areas where competition is possible. In October 2014, Russia passed a bill, which would seek to limit foreign ownership of Russian media to 20%. The new law will come into force from January 1, 2016 and will impact several print and online media outlets, apart from television and radio stations. The passage of the law will seriously undermine right to freedom of speech. Current Strengths Improvement in business ranking Current Challenges Weak judicial system Future Prospects Improving product market segmentation Future Risks Personal liberties at threat, Media freedom threatened
ENVIRONMENT Prime Minister Medvedev signe d a law in May 2013 that mandated the co nversion of almost 50% of all city buses to run on natural gas by 2020. The main objective of the government is to use natural gas as a motor fuel and initiate measures to promote its use. Russiaâ€™s carbon dioxide emissions growth contracted 0.20% in 2012 after registering a growth 8.88% in 2011,according to MarketLine. Current Strengths New environmental policy, International co-operation Current Challenges Illegal logging, Spillages causing environmental hazards Future Prospects Promotion of clean energ y Future Risks High energ y intensity
POLITICAL The country is challenged by widespread corruption scandal involving both the president and her key ministers. Moreover, the legislature has reached a political impasse over the passing of important bills. In May 2016, President Dilma Rousseff was suspended from office. She is accused of manipulating the government budget. Current Strengths Strong federal republic, Efforts toward economic integration, Increasing ties with the US and Mexico Current Challenges Freedom of speech under threat, Weak rule of law, Impeachment of the president Future Prospects Efforts to clean up the electoral process Adoption of Marco Civil law Future Risks Prevalence of violent crime, Political uncertainty
P EST L E A N ALYS I S F OR OT H ER POTE NTIA L C OU NTRIES ECONOMIC According to the IMF, the current account stood at a deficit of 4.31% of GDP in 2014, and expected to be narrow down to 3.32% in 2015. The deficit was driven by a fall in commodity prices th at reduced the export earnings. Brazil has relatively little external debt. Total external debt stood at 23.73% of GDP in 2014, up marginally from 20.22% in 2013, according to the MarketLine. This was low compared to most emerging economies and hence is expected to bolster Brazil’s net liability position in the international market. Current Strengths Strong macroe conomic framework, Strong FDI inflow, Strong agricultural base Current Challenges Stubborn inflation, Low productivity, Infrastructure woes, High cost of Doin g Business Future Prospects Investments in infrastructure projects, Energ y self-sufficiency, Support to agriculture Future Risks Dependence on commodity exports Manufacturing downturn continues Low business confidence SOCIAL Approximately 22.8% of Brazil’s population is below 14 years of age and around 8% is above 65 years of age in 2016, according to MarketLine. Brazil is a relatively young country, with approximately 69.2% of the population between 15-64 years. According to the OECD, the proportion of people with secondary education and tertiary education has witnessed a sharp rise during 2003–12, which should benefit a large chunk of the population over the longer term as higher education is positively correlated with higher earning potential and exiting poverty.
Current Strengths High percentage of working age population, Improving urban living, Improving Healthcare, Measures to eradicate hunger and poverty Current Challenges Regional disparity and urban poverty, Informal employment, Child labor, High crime rate and violence against women Future Prospects Measures to reduce the spread of AIDS, Progress in education Future Risks Aging Population TECHNOLOGICAL According to MarketLine, mobile penetration stood at 139.9 per 100 people in 2015, with total subscribers at 281.15 million. Mobile subscribers grew by an average of 17.47% during 2001–15. According to MarketLine, internet use rs as of 2014 stood at 114.4 million, with a penetration rate of 57.3%. Internet subscribers grew at an average rate of 13.21% during 2006–14. In March 2013, the government launched the BRL32.9 billion ($14.84 billion) Inova Empresa Plan to boost productivity in certain key sectors. The plan intends to boost competitiveness of firms in sectors such as information and communication technolog y, agriculture and agribusiness, energ y, oil and gas, defense, environmental sustainability, and health. As per the reports from 2013 to 2014, $14.8 billion were made available for the plan. Current Strengths Government encouragement to improve R&D, Large aerospace and defense industry Current Challenges Low R&D output, Lack of national and international collaboration on innovation Future Prospects Inova Empresa Plan
Future Risks Low availability of human resources in science and technolog y Legal Brazil has not per formed well in product market regulation. Product market indicators are a set of metrics that measure the extent to which policies framed by the government promote or inhibit competition in areas where competition is possible. Overall, Brazil is regulated to a greater extent than Colombia, Peru, South Africa and Russia. In January 2014, a new anti-corruption law came into effect in Brazil. It reinforced the country ’s pledge to check corruption under the OECD’s anti-bribery convention. The law is applied to any business operating in Brazil, including foreign companies. The new law imposes fines up to 20% of their turnover, or BRL60 million ($27.07 million) if it is hard to find the exact turnover. Current Strengths Comprehensive Legal Analysis Current Challenges Complicated tax system, Concerns over intellectual property protection, Trade and industrial policies not focused on competition and productivity growth Rising Corruption in the Country, Judicial delays Future Prospects Anti-Corruption Law Future Risks Inefficient regulatory environment, Product market regulation Environmental Over 75% of Brazil’s electricity comes from hydropower, making the nation one of the world’s largest producers of hydroelectricity. This has helped Brazil to reduce dependence on conventional power plants that pollute the environment. According to MarketLine, CO2 emissions rose to 537.6 million metric tons in 2013,
up from 500.2 million metric tons in 2012. Rising CO2 emission is likely to hamper the country ’s efforts to reduce its carbon footprint. Current Strengths Rich Biodiversity, Hydropower Current Challenges Changes to the forest code, CO 2 emissions and Air Pollution, Po or Waste Management Future Prospects Reduced deforestation, Propagation of ecotourism, Reforestation and renewable energ y plans with th e US Future Risks Projects fraught with environmental risk, Threatened and Endangered Species
APPENDIX E G U C C I C U STOM I Z AT I ON S ERV I C E As mentioned in the main body of the project, GucciArcade will have a room dedicated for customers to experience a customization feature for a limited edition bag only at this event. Customers will interact with the screens in front of them to decorate a Gucci Lilith Bag and have the option to purchase, or share their design on soc ial media. To experience the customization service please follow this link: goo.gl/UPwbIL
APPENDIX F IN S P I R AT I ONS AND M OOD BOAR DS The following i mages were used to ins pire and conjure the theme of the GucciArcade project.
Â© FAL L 2 01 6 C ONT E NT BY DA N A , T I A N YI , C AT H ER I N E, a n d H EEJU N G
FASM 430 Heejung Kim Tianyi Wang Dana Cariello Catherine Batres Retail Management Project