Gucci puts other luxury brands on notice by accepting crypto
Gucci’s move into crypto shows that it pays to constantly push the envelope and play to win. What can other brands learn from the brand’s bold strategy?
May 10, 2022 04:52:00 AM | Article | Daniel Langer
One of the best predictors of future success or failure of a luxury brand is the ability to innovate, influence, and inspire. Brands that set the tone, that disrupt, and that gain cultural influence through relevant actions that resonate with their target audiences typically grow disproportionately. Brands that just follow trends are typically those that decline.
Since the arrival of Marco Bizzarri and Alessandro Michele at the helm of Gucci, the brand has repeatedly raised the bar and challenged conventions. It is now one of the most influential brands in the luxury space, leading to a spectacular business performance in recent years and making it one of the world’s most appealing luxury brands among Gen Z, outperforming almost all peers in that critical customer group.
Gen Zers are already today the most influential luxury customers and by 2030 they will also be the number one customer group in terms of luxury spending. Therefore, it is critical for luxury brands to be seen as leader of the pack by this extremely critical audience.
Gucci has a track record. It was the first major luxury brand to ban fur years ago. At that time, the move was seen as very controversial by its competitors, given that many brands had a high exposure to fur. And while, according to personal shoppers of affluent luxury customers, some traditionalist customers simply switched from Gucci to other brands that were still offering fur, the brand made a much more important point. That it puts sustainability before short-term results — and this resonates with Gen Z and millennials. This move, and others that followed at rapid pace, made Gucci overnight one of the leaders in sustainable luxury.
Other firsts were the introduction of a gender-fluid line, Gucci MX, and the Hacker Project with Balenciaga. It was a disruptive initiative where each of both brands reimagined the other’s icons. In music, Gucci embraced K-Pop much faster than most other luxury brands, making Exo’s Kai the new face of the brand, now dubbed the Human Gucci. The recent Love Parade collection included sex toys, again a first for a luxury brand.
Alessandro Michele’s Spring/Summer 2022 collection featured sex toy jewelry. Photo: Gucci
The Italian brand also was among the first and most influential movers in the luxury metaverse, which is rapidly evolving into the new playground for luxury brands. Gucci was the first luxury brand to release an NFT in the form of an art film, which was sold for $25,000 (166,650 RMB). Two subsequent NFT collections, SuperGucci and Gucci Grail, became instant hits, and Gucci just announced on its Gucci Vault Discord server that the owners of these collections have the exclusive right to pre-order a new collection prior to its public release. Additionally, Gucci started to develop real estate on the blockchain-based platform The Sandbox. While others wait and see, Gucci acts rapidly.
For the Gucci Grail project, Gucci customized 11 PFP (“Picture For Proof”) NFTs with looks inspired by collections from Alessandro Michele. Photo: Gucci
Now Gucci is making a significant new move in accepting crypto payments in North American stores. Accepted coins include Bitcoin, Bitcoin Cash, Ethereum, Wrapped Bitcoin, Shiba Inu, Dogecoin, and Litecoin, among others. This is particularly clever given the extraordinarily high adoption of crypto among Gen Z.
In recent qualitative focus groups by Équité, there was a directional indication that the diffusion of crypto among Gen Z luxury customers is significantly higher than among Gen Xers and beyond. Therefore, leading in crypto in luxury will further solidify Gucci’s influence among Gen Z.
An aspect of crypto that is often overlooked is that owners often see crypto as something different compared to established currencies. In the focus groups, mentions like “crypto feels like a computer game,” “it does not feel like money,” “the fast fluctuation of value makes it practically impossible to understand the true value of a coin,” and “it’s like a chip in a casino” indicate that traditional pricing anchors through reference prices don’t exist here or are much more muted. This means that crypto may lead to a much higher willingness to pay compared to traditional currencies, making it enticing for the luxury sector.
Gucci’s moves show that it pays to constantly push the envelope and play to win. It creates extreme value, increases the brand’s desirability, and makes it culturally one of the power players. Other brands: take notice before it’s too late. Catching up will not be sufficient to be influential and inspiring. It requires determination to make bold moves first. The future of luxury is unfolding in plain sight.
Daniel Langer is the CEO of the luxury, lifestyle and consumer brand strategy firm Équité, and the executive professor of luxury strategy and pricing at Pepperdine University in Malibu, California. This article first appeared on Jingdaily.com