Diesel Innovation

Table of contents

“Diesel pioneer the idea of luxury denim, and we still drive this market. But our marketing encompasses more: the consumers love the brand, the lifestyle and

1.0 Introduction

Diesel, the Italian jeans-maker, known for its luxury denim garments is back on our screens and causing interest on all major social media platforms. Since its start, Diesel have used “For Successful Living” as a slogan for the brands DNA (Diesel, 2023). The brand has also become part of the worldwide youth culture due to its surreal viral advertising content (Casagrande,2018) and it’s growing consistency in incorporating rising trends.

Due to their creativity in recent shows, the brand has returned to our screens. Especially within the interest of Generation Z. It could be argued that due to the recent come back in 90s and Y2K trends, Diesel has noticed its opportunity and seized the game.

In the recent decade however, Diesel was seen to be losing its charisma and hype. The brand almost became forgotten “somewhere between Instagram’s inception and the embrace of high-rise denim, the brands logo-packed pieces got

relegated to the back of our wardrobe and sent to donation bins to make way for more subtle, trend led looks” (Walcott, 2022) leaving Diesel in the dust and seen more regularly in off-price retailers like TK Maxx. But how will Diesel maintain this rapport with its new consumers? What innovation can it use to not only grab and excite the current consumers but create a lasting relationship and become an aspirational brand within the luxury market?

This report is to investigate how the brand can stay within the eye of the modern consumer as well as maintaining its heritage to present itself as a luxury brand. A review of the luxury market and Diesel’s current strategy will be unpacked, resulting in a recommended Innovation to suggest suitable directions.

All Images derived from Diesel’s Instagram page: @Diesel

2.0 Luxury Fashion Market

2:1 Customer Experience and Luxury

Figure 1 displays the expected sales of the luxury fashion market for 2023. As sales are set to grow in most regions, brands should consider what their brand represents, and which audience is most appealing.

According to Batat (2019) today’s consumer is looking for an “experience” that they can involve themselves in. Luxury businesses and brands need to rethink their strategies by evolving their traditional luxury marketing tools to better understand the consumer experience.

As direct to customer strategies are beginning to fall (See figure 2) , Brands like Diesel in the luxury market have an opportunity to seize consumer attention, through experiential innovations. There is a new focus for luxury to bring in both multi-channel and omni-channel strategies. At the forefront of today’s bricks and mortar boom are digitally native newcomers (Gen Z) that see stores as marketing opportunities rather than just a means of generating sales (Chen, 2022).

The customer experience has reversed back to more public events, with the introduction of possible collaborative work and partnerships with other brands and creatives, to create more multi-channel coverage, whilst exploring the world of digital to improve its omni-channel strategies.

(Figure 2, Yahoo Finance and CNBC, derived from Mckinsey and Company, 2022)

Figure 1, McKinsey and company 2022)

2:2 Gen Z and their Buying Habits

Focussing on the consumer profile of Generation Z customers. It has been stated by the Business of Fashion Studio (2021) that Gen Z will contribute 130 percent of market growth between now and 2025, with nine out of ten Gen Z consumers believing brands should detail their stances on environmental and social issues. How brands manage to communicate about issues that are important to consumers will also be critical.

Figure 3 shows that the age distribution of Diesel is largely between the 25-34 age bracket as well as the 1824 age bracket, with the gender distribution being close to 50/50. Diesel’s focus should largely be on developing innovations suited to both these age ranges with an overall gender-neutral appeal.

As shown in figure 4, Gen Z consumers view through the lens from a digital age, they are realist communicators, they value social movements, fluidity and mobility, with their overall spending habits being based around ethical products with the sources of influence stemming from social media and niche influencers. One important implication from fashion companies is that Gen Z are not only concerned for the brands values but with the value proposition that their products provide (Nanda, 2020). Turning to social media to gain a better understanding and review if a garment or product is worth the purchase.

Figure 5 shows how performance marketing costs have increased by 70% on TikTok, implicating that buying decisions, mainly made by the Gen Z consumer, are largely influenced by users on this platform. Influencers are already key partners for many fashion advertisers, with brands tapping their content-creation skills and accessing their loyal audiences (McKinsey and Co, 2022). Highstreet and e-commerce brands have been seen in recent years to adopt influencers as a marketing strategy, but it is now more relevant than ever to see luxury brands also adopt this approach.

Lastly, Gen Z consumers have are majorly influenced on whether brands have conscious development plans and show sustainable attributes.

The Graph in figure 6 shows how Gen Z consumers are willing to pay 10% extra for sustainable products (Nanda, 2020). Millennial and Gen Z consumers consider sustainability as a principle for their consumption choices, and this segment will account for half of global luxury sales by 2025 (Deloitte, 2020). Social responsibility and social sustainability are no longer a preference, and it is now an absolute requirement (McCormick and Ram, 2022). Any innovation created for any market will now have to be based on working towards a sustainable future in order for the brand to succeed.

(Figure 3, SimilarWeb 2022)

(Figure 4, Nanda M.C, 2020)

(Figure 5, Business Insider, derived from McKinsey and company,2022)

(Figure 6, Nanda, 2020)

Perceptual Map

2:3 Competitive Analysis

Diesel’s top five competitors (In chronological order) are Prada, Gucci, Calvin Klein, Yoox (luxury retailer) and their largest, G-Star RAW (SimilarWeb, 2023).

As seen by the perceptual map, many of Diesel’s competitors focus on contemporary garments within the availability of accessible luxury, providing the evidence of retailing towards the new Gen Z consumers.

Within the aspect of adopting the multi-channel and omni-channel strategies expected by the Gen Z consumer, brand collaborations with both smaller brands and influencers have been on the rise, especially within Diesel’s competitors. Gucci and their collaboration with Palace, as well as working with social media influencers like Emma Chamberlain have rewarded the brand with more recognition from the Gen Z consumer. Prada has been working largely with Harry Potter star and Feminist Emma Whatson, advocating sustainability within luxury. Whilst Calvin Klein advocates consistently their relationship with the Kardashians.

The focus now needs to be on what Diesel represents and the story they want to tell. How can a relevant innovation continue its brand reputation as well as project Diesel as an aspirational brand to the modern-day consumer?

3.0 DIESEL

Source: @Diesel via Instagram

3.1

The Diesel Story - For Successful Living

According to the Italian brands website, Diesel began in 1978 by Renzo Rosso with the ‘intention of creating the world’s most innovative denim’. The name originated from diesel being a good “alternative energy” amidst a world oil crisis. Therefore, providing the brand with the symbolism of alternative denim. You can determine that the brands story or identity is shown through their slogan ‘For Successful Living’ that first launched in 1991. Appealing to be a brand of difference that also represents reliability. The first flagship stores opened in New York, Rome, and London in 1996. Since then, Renzo Rosso expanded his portfolio of brands, purchasing additional fashion companies managed under the holding company Only The Brave in 2002 (Casagrande,2018). Fragrances were also released in a signed partnership with L’Oréal in 2007, named ‘Fuel for Life’ and ‘Only The Brave’, expanding their luxury growth into the affordable product market in the beauty communities.

3.2 Brand Identity

As stated by Batat (2019) “a luxury brand is attractive because of its know-how, its history, and its image, consumers who are not satisfied by their experiences can suddenly quit it” so why did Diesel fall from its symbolism of luxury jeans maker into the bracket of reachable high end?

In an interview by GQ’s Turner, the Creative Director Glenn Martens from Belgium admitted that when he joined the brand in October 2020, his colleagues all “had a different perception on the brand and what it should be” explaining why the brand may have lost its brand recognition in the last decade.

3.2.1 90s Aesthetic

Recently, Diesel has regained consciousness in the public eye due to its Spring/Summer 2023 show. The brand was rewarded with ‘The hottest Logo of the Year’ with Diesel entering Lysts hottest brand of the year (Hypebeast, 2022).

Diesel has always had a unique and fun atmospheric, well known for its innovative denim designs and its creative and out-the-box advertisements. The brand was a major symbolism of 90s culture.

The ‘Be Stupid Philosophy’ 2010 ad campaign encouraging consumers to “be stupid” displaying photography grade style images showing models interacting in unusual and ‘stupid’ activities, encapsulates the simplicity of 90s garments and grungy care-free attitudes. It could be argued that this campaign may have been too early for its time as post-pandemic was the space in which 90s style garments began to see a resurgence. However, this consistency of brand representation of its heritage and the values that made it so popular in the first place, may be what the brand needed to secure its place in the Gen Z consumer’s eye when they recollect on what encapsulated the true symbolism of the 90s.

Diesel’s most recent campaign ‘DieselXDiesel’ (2021) which shows imagery of models having their smiles warped to express the spirit of the decades that encapsulates [the] heritage #ForSuccessfullLiving in extra-joyful expressions of surreal imagery (Diesel,2021) adds to the wacky and artful emotions being re-explored by today’s consumers. The campaign developed a capsule collection and vintage archive including distressed denim, Americana workwear and acid washes, appealing to the wants and needs of the Gen Z consumer. With 90s trends recently taking control, who else could Diesel, the heritage Italian denim brand spanning 40 years, collaborate with to truly celebrate the enduring aesthetics of denim across the decades…but itself (Dazed,2021).

Diesel has been in a turnaround phase (Fernandez, 2020) since 2014 whilst Rosso worked on his brand portfolio, creating the OTB Group. Diesel returned to top-line growth in 2019, generating $1 billion, later hiring two chief executives a year later in 2017, one being former Balmain CEO Massimo Piombini (Fernandez, 2020). Piombini who had worked for one of Diesel’s competitors, Gucci, joined Diesel because it was one of the first global brands that made an impression on him as a young man in Italy, feeling that it has the history and narrative needed to draw in today’s customers (Fernandez, 2020). Not only does this illustrate how strong Diesel’s brand identity is, it proves that the brand can keep its ideal of appealing as a luxury jeans maker due to its consistency of storytelling not only the quality of the items #ForSuccessfulLiving but also their heritage of success in the 90s.

Images Derived from Fontsinuse.com

4.0 Innovation

4.1 Moodboard

Showing what Gen Z are interested in or looking for from the luxury fashion market

All images derived from Unsplash.com

4.2 The Innovation - DieselXStüssy

To combine these wants and needs from the consumer, one innovative idea is as follows:

Constructions begin to take place outside Stüssy’s London premises and passers-by notice a giant 8 ball forming around the architecture of the shop. Over the next upcoming days it is noticed that the well-known Stüssy 8 ball is decorated in denim, with Diesel logos constructing the eight.

An Image of Fred Again exclusively wearing items from the limited-edition collaboration begin to circulate all social media platforms and the hype begins.

To your delight, Fred Again, the TikTok sensation and most relevant DJ/Multi-instrumentalist in the current Gen Z dance music community is hosting a set in the basement of the skateboard brands store. You have seen the ad on social media platforms of influencers and young upcoming celebrities talking excitedly about the upcoming DieselXStüssy event at the Stüssy flagship store in Soho London. The event is open to the public and as the ad instructs, you download the Diesel app to find out more details. In a quick 2 minute video, you see that the Stüssy store will be displaying the new collection as well as hosting the exclusive nightclub event for one night only. You enter in your email and hope you are

one of the lucky winners.

You see that the Stüssy shop itself is presenting a limited-edition pop-up of the new collection. You gather your friends and head to the store. Once you have arrived, the interior is temporarily painted with Diesel’s iconic red. The clothes are displayed on mannequins skateboarding mid-air and on benches and ramps with music you recognise from the 90s playing all around. The back of the room displays the garments on rails and shelves, you and your friends go over to look through the collection and get to know the quality of the garments. Whilst in the changing room, Fred Again’s mixes are playing, creating the atmosphere of a night out in London. The Geo-locater on the app alerts your phone, notifying exclusive filters for you and your friends to take photos and selfies with.

One friend has tried on some of the new low-rise jeans but can’t find any in her size, due to the exclusivity of the drop she’s sad, but you show her that the app say’s there is some more in the stockroom and reserves one for her to collect at the till.

You’re happy that your luxury items are bagged up in an exclusive DieselXStüssy denim tote bag, as the price you paid for these garments and the time you spent waiting to go in is justified and you appreciate the thought behind using the tote bag rather than a plastic or felt bag.

Some hours later, you receive an email that you and a friend have won a ticket to the event!

Once you arrive at the venue, the #DieselXStüssy circulates on social media with photos of English celebrities standing at the decks with Fred, wearing the new collection and posting relaxed and care-free images of themselves and their friends. 90s tracks are played and remixed into his work, with guest appearances such as Skrillex, LaLa and other upcoming artists to debut new tracks and give the spotlight to fresh new faces that are hitting the London dance scene. Images of infamous 90s models are projected randomly across the venue, one in which being Naomi Campbell whom in 2017 collaborated with the brand, keeping the 90s aesthetic as the supporting theme of the night. The night is a success!

A couple days after the event, you see on the Diesel and Stüssy Instagram pages what the brands have decided to do post-event. It has been declared that the denim on the 8 ball is being washed and made into limited edition pieces, in which Fred Again has signed on the pockets of each garment (Jackets, Jeans, Shorts and exclusive tote bags) a separate image displays a paragraph on how they wanted to limit their carbon footprint and create garments in memory of the experience.

You are happy to see that the brands have taken an extra step forward to guarantee their responsibility and show leadership in the developing conscious world.

4.3 Key Aspects of the Innovation

Why Stüssy?

Based on the mood-board, the Gen Z consumer interested in the luxury fashion sector will be interested in events with an experiential experience. With the rise in streetstyle popularity, comes the rise in collaboration. One in which saw one of Diesels luxury competitors, Gucci, collaborate with the famous street style brand Palace. In an interview with GQ the Palace designer, Fergus Purcell stated how skateboard style was experiential, “especially in the 90s” where designs where stolen and re-imagined, inevitably giving an artistic approach to strict fashion houses (Cartter, E 2022). This scrapping of rules used by skateboarding brands appeals to the Gen Z consumer looking for new and re-imagined ideas in not just the fashion industry but in day-today life. Fashion and skate brand collaborations are an excellent way for luxury brands to tap into the window of a new audience and remain relevant in today’s digital worlds. Luxury brands have edged into the skateboarding communities to create luxurious sneakers and apparel (Fashionisto,n.d.) shown by Louis Vuitton’s collaboration with Supreme (A skateboard brand) . Proving that this is a route Diesel should undertake.

With Diesel’s recent collections showcasing their artistic side, a collaboration with a skateboard/street-style brand that focusses on art-based designs as well as sharing a relationship with the Gen Z consumer would be beneficial for Diesel.

Stüssy is well known for its symbol of the 8 ball. The art has been part of its heritage since its inception and has returned with devastating aesthetic power (Tuzio, 2021). Making it perfect for Diesel. The brand’s flagship store is home to a 5ft version of the iconic symbol, creating an exciting and artistic interior to the store. The brand also divulges into limited releases of artistic homeware pieces, something both Diesel and Stüssy have in common. This provides freedom to what the collaboration could include within the innovative event. Although the collaboration itself is not new to the consumer eye, the creativity in merging the iconic designs of both brands to create the temporary re-construction of the building alongside the nightclub, invites new and existing customers from both markets to experience something new.

Source: @Stüssy via Instagram

Store Design

The luxury aspect of the brand is expressed through how the store is designed. Images on the right show examples of the Diesel flagship store in Milan. Continuing a similar design for the pop-up shop will guarantee consistency in brand image. The layout of the store should resemble a ‘Boutique Layout’ style to reaffirm its luxury image.

Source: Goworek Retail Marketing Management (2015), adapted from Varley and Rafiq (2004) 25

Source: @Diesel via Instagram

Sustainability

Piombini, a chief executive of Diesel plans to make sustainability a key message connecting it to Diesel’s history of inclusivity and authenticity, words he says Rosso was using for years before they became the go-to jargon (Fernandez,2020). Diesel state that they now commit to taking on a bold new challenge, confronting the social, economic, and environmental impacts of the fashion industry at large, a challenge Diesel is ready to face – head on (Diesel,2023). Piombini stated that “the company and the brand is investing a lot of money in the sustainability area, not just what you see in the front end…but also re-discussing all the supply chain” (Fernandez,2020) with plans to release two upcycled collections each year. Providing reasoning behind the innovations final steps when de-constructing the denim 8 ball. The recycling of the material used for the structure will reassure the Gen Z customers of Rosso’s efforts as well as creating hype and excitement over the exclusivity of the products.

Source: @Diesel via Instagram

Technology

McKinsey and Company argue in the ‘State of Fashion report 2023’ that ‘the role of bricks and mortar is evolving. To generate higher revenue [therefore, higher consumer interest] stores should be digitally enabled and fit seamlessly into the overall physical-digital multichannel strategy.’ Generating the need for a phygital (physical and digital) retail experience. Which is why, within the innovation, you see the customers not only enjoying the geo-locator providing fun filters to take photos, but it also helps to transfer information from its stock intake onto the customer’s phone. Providing trust and reliability.

The aspect of social media is very important. As seen in Figure 4 and 5, social media and niche influencers on TikTok have the overall source of power. Which is why in terms of the presented innovation, the inclusion of using music from smaller artists is important. Gen Z admire new and fresh faces, as well as respect brands that give them a platform to promote themselves. This idea of the underground nightclub suits the Diesel personality and relates to their recent #NTSxDieselTRACKS campaign launching a series of radio mixes and Spotify playlists designed to showcase the music and nightlife culture specific to different cities around the globe (Diesel, 2022). Not only will this provide positive symbolism for Diesel’s reputation, but it will also continue the brands relevancy within the luxury fashion industry. If Diesel continues supporting small and upcoming influencers and artists, whilst keeping their brand heritage, this could inevitably keep the brand at an aspirational level for Generation Alpha. If the brand does not show interest in modern-day social influencers and the technology of the future, they could once again slip under the radar.

5.0 The Future of DIESEL

Diesel has always had a story to tell, led by Rosso and his passion for Denim and love for bold, tongue-in-cheek advertisements (Fernandez, 2020) exaggerates the fact that this innovation for the store to also become an event, not only shows the Gen Z consumer that this luxury brand is aspirational, but it also listens to what they want when it comes down to brand experience. The technology in today’s world pushes the consumer to want bigger and better experiences. Batat (2019) illiterates that brands should not just meet the functional needs of the consumer but also follow the elements of providing the buyer with; feelings of comfort, positive and pleasant emotions, a sense of belongingness to a family or a common luxury consumption culture, symbols reflecting the world and the value of customers, a pleasurable and enchanting social interaction, and feelings of well-being.

Post-pandemic, Gen Z consumers now want to do as many activities with their friends and peers as possible. Alongside the development of micro-trends, it is now more important than ever for brands to collaborate with well-known street-style brands, adding them to the list of brands that are seen as more reliable and wearable within the multitude of trends. Diesel is lucky to be the face of a garment that symbolizes long-lasting qualities. With the rise in sustainable and conscious buying habits and the

need for brands to show awareness is predictable on its success. With Diesels OTB Sustainability Report (2021) for a greener future, more innovations need to incorporate this vital aspect if it wants to see a future for the brand. To display these ‘feelings of comfort’ and ‘reflecting the world and the value of customers’ the approach to displaying their conscious behaviours but in keeping with the fun and “tongue-in-cheek” attitude is vital, putting a positive twist on sustainable thinking yet keeping the art and creativity of Diesel’s brand personality. Moreover, this innovation provides excitement and hype for the brand, bonding with the Gen Z consumer as they create a memorable and trendy event.

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