Market Analytics Jan 7, 2020 5 min read

Discounting for Gucci rose at luxury e-tailers. Is Bottega Veneta’s success responsible?

Gucci was the luxury brand that defined the last half of the decade. But as hype starts to die down, Bottega Veneta is emerging as Kering’s new darling.

Gucci

Gucci was the luxury brand that defined the last half of the decade, celebrating maximalism and gender fluidity with clashing prints and romantic silhouettes. But as hype starts to die down, Bottega Veneta is emerging as Kering’s new darling.

While boasting vastly different aesthetics, both Italian heritage brands have a rich history. The appointments of their current creative directors have propelled them even further to become two of the hottest brands in the world right now. 

We dive into the product, pricing and discounting strategies across Gucci and Bottega Veneta by using EDITED’s Retail Data Platform to understand what’s responsible for each brand’s success.

EDITED data takes the guesswork out of retail and lets you seamlessly perform your own brand analysis. Get in touch with a Retail Specialist to show you now. 

Demand is built on hero products

As consumers look for a brand to satisfy their minimalistic style in a post-Phoebe Philo era, Daniel Lee’s arrival at Bottega Veneta was well-timed. Dubbed on social media as the ‘New Old Celine,’ the simplified brand aesthetic helped boost Bottega Veneta’s sales by 9.8% in Q3. In only a short time as Creative Director, Lee’s vision for the brand unearthed several iconic products to rival other successful brands in Kering’s portfolio.

Gucci

The Pouch bag was the most carried style during runway season. According to EDITED data, its commercial success attributed to a 12% price markup in less than a year. Bottega Veneta is also responsible for popularizing the square toe silhouette, as represented in the Stretch sandal. During Fall/Winter ranging, US mass retailers were quick to interpret this shape in their footwear assortments, which resulted in an impressive 1550% growth YoY. 

On the opposite end of the spectrum, with Alessandro Michele at the helm, Gucci’s brand narrative evolved from sexy to eclectic while incorporating more elements of streetwear. Under his tenure, several instantly recognizable products became cult classics, spurring countless imitations within the mass market.

Gucci

All examples of these products have never received a reduction on Gucci’s site. In fact, they’ve increased in price since they first became available, allowing the brand to further capitalize on their success. The Marmont belt bag has increased to $1,050, the original Ace sneaker to$535 and the GG Logo belt to $420. 

Despite the hype surrounding Bottega Veneta, Gucci’s hero items continue to remain a status symbol today as the brand maintains relevance by updating colors and fabrications, alongside capsule collections. Lyst reported that two Gucci belts sold through their site every two minutes in 2019. The Marmont bag continued to pop up outside Spring 2020 shows. And a collaboration with Disney has seen the Ace sneaker updated in time for Chinese New Year.

Pre-Daniel Lee, deeper discounts were recorded on Bottega Veneta’s own site

Using EDITED’s Discounting Over Time features, we can see how consistent Gucci’s promotional strategy on its own site has remained. Since 2017, the average discount depth month-by-month rarely rises above 10%. 

Whereas at Bottega Veneta, products have been more subjected to reduction. The brand took deeper promotions, twice a year, with discount averaging as high as 40%. In 2019, discount amounts dropped off around November.

The proportion of products discounted also remains relatively flat for Gucci, showing no key times in which products go on sale – something quite typical of a luxury brand. 

At Bottega Veneta, the number of products reduced significantly rose from November 2018 to May 2019. This was due to markdowns taken across accessories and footwear. Reductions then saw a noticeable drop with the number of products discounted for November and December 2019 lower than last year. With fewer products reduced under Lee’s direction, this indicates Bottega Veneta closed out 2019 for these markets stronger than previously.

Gucci

Mid-2019, discounting at luxury e-tailers for Gucci soared

Analyzing the top US luxury e-tailers stocking both brands shows the strategy for Gucci products exercising the same shallow discounts in line with its e-comm site. From April 2019, there is a huge spike where discounting outpaces Bottega Veneta for the first time, with average reductions climbing between 40-45%. Even after this fluctuation, discount averages are still higher than previously seen.

Gucci

Growth at Bottega Veneta, while Gucci slows down

After experiencing impressive growth since Gucci’s brand revival, the growth for the brand has naturally started to lose momentum over 2019, especially due to a sluggish Q2. Comparing new arrivals over the last quarter for menswear, womenswear and childrenswear across major e-tailers stocking Gucci saw a decline of 11% at Net-a-Porter and 15% at Nordstrom YoY.  Growth was noted at Ssense, which increased its range by 22% YoY. 

New arrivals of Bottega Veneta’s Spring 2019 collection stocked across e-tailers were up 31% in the US compared to Spring 2018, while the UK saw a growth of 124%. Categories driving this growth across regions included handbags (up 83% season-on-season) and dresses (50%). Another area of growth is footwear (64%), owed to the sartorial success of the square-toed sandals.

Additionally, these retailers are regularly leveraging Bottega Veneta’s “it” status within marketing promotions. Over the last quarter, mentions of the brand across email communications in both regions rose 20% YoY. 

These brands continue to make Kering a powerhouse and will further shape fashion this year. With romanticism emerging as a strong trend to note for 2020 in menswear, we can expect Gucci to be a key player in this area. As more of Lee’s collections filter into retail, discounting for Bottega Veneta will start to level out. The brand will continue to reign supreme, particularly within accessories. 

EDITED will have all the looks for both of these designers covered in our upcoming runway reports. Be sure to sign up to our weekly Insider Briefing to stay up to date on the Fall 2020 shows.