Case spotlight: Gucci in the Metaverse

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This case was featured in the May 2024 issue of Connect.

Who – the protagonist

Robert Triefus, EVP of Brand and Customer Engagement at Gucci between 2018 and 2022.

What?

Gucci is the famous Italian luxury fashion house that was founded in Florence in 1921 by Guccio Gucci.

Under Marco Bizzarri and Alessandro Michele’s leadership, Gucci underwent a comprehensive creative and cultural transformation that made it relevant to a younger and more diverse customer base. Between 2015 and 2021, Gucci’s revenue more than doubled, from $4.2 billion to $11.1 billion.

Avatars shopping in the metaverse

Why?

By 2021, the explosion of the metaverse saw people in developed countries spend more time interacting with others online than offline, and consumer interest in digital goods went through the roof.

Whereas many luxury firms initially dismissed the metaverse as all hype and no substance, Treifus spotted an opportunity.

Initiatives such as forming a ‘gaming squad’, creating Gucci-clad avatars, selling luxury virtual sneakers and buying a plot of virtual land, cemented the brand’s place as a first mover in the metaverse.

When?

By 2022, a multitude of luxury brands were rushing to get a foothold in the metaverse market.

Where?

Gucci was a worldwide brand, operating more than 500 stores with over 20,000 employees.

Key quote

“We have taken the view that we could lean into opportunity. That doesn’t mean that we must embrace technology for technology’s sake. Rather, we look for opportunities that can enrich the experience of our customers and lead to a deeper engagement with our community.”
Robert Treifus.

What next?

Despite Gucci’s standing in the metaverse market, more luxury brands started taking advantage of social gaming and NFTs (non-fungible tokens) to tap into the cultural zeitgeist and monetise a potentially sizeable opportunity.

In the spring of 2022, Gucci’s senior management would meet with investors and analysts for the biannual update on the company’s strategy, financial performance and future outlook.

Triefus and his colleagues contemplated the best way to position the metaverse business. What could the metaverse contribute to the personal luxury goods industry revenue and profit pool? What market share could Gucci realistically seize? And what could the company do to rein in operating costs while fostering learning and innovation?

AUTHOR PERSPECTIVE 

On the reasons for writing the case…

Stefano said: “The metaverse – the three-dimensional successor to the internet we use daily – is a polarising subject as business leaders have vastly different views of whether, how and when it might take shape. Yet, amid debate and uncertainty, they must strive to form a practicable vision and strategy for the metaverse. When it comes to the metaverse, or any other new, ambiguous opportunity, decision makers need to hone their edge in three key areas: strategic fit, effective forecasting, and innovation and learning. Our case study focuses exactly on these areas, linking theory and practice.

headset Gucci

On the case writing highlights…

Stefano continued: “We all recognise a great story when we read one. But when it comes to write a teachable case study, data comes first. My co-author, Umberto Lobina, and I formed hypotheses and identified the needed data sources and metrics long before we started writing the case. We were lucky because Gucci’s parent company Kering is exceptionally transparent in reporting financial and operational data. Also, Umberto did a great job liaising with Gucci’s key stakeholders, securing their availability and support throughout the case preparation process.”

On teaching the case…

He continued: “The case has been received enthusiastically by masters-level students and business executives as they could relate to the challenges the protagonist, Robert Triefus, faced to overcome the inherent tension between experimentation and monetisation, from the early steps in gaming to establishing a metaverse business unit with P&L responsibility, and refining a test-and-learn approach reining in operating costs while increasing innovation and learning.”

On case writing tips…

Stefano suggested: “Immerse yourself in the subject you want to document, ideally long before you start writing the case. Explore the subject from a variety of angles until you identify a framing that resonates with you and your target audience. And don’t be afraid to share your interim findings with colleagues and students. Exposing your work to criticism early in the process will save time (and unwanted surprises) later in the process.”

THE CASE 

The case

Who – the protagonist

Robert Triefus, EVP of Brand and Customer Engagement at Gucci between 2018 and 2022.

What?

Gucci is the famous Italian luxury fashion house that was founded in Florence in 1921 by Guccio Gucci.

Under Marco Bizzarri and Alessandro Michele’s leadership, Gucci underwent a comprehensive creative and cultural transformation that made it relevant to a younger and more diverse customer base. Between 2015 and 2021, Gucci’s revenue more than doubled, from $4.2 billion to $11.1 billion.

Avatars shopping in the metaverse

Why?

By 2021, the explosion of the metaverse saw people in developed countries spend more time interacting with others online than offline, and consumer interest in digital goods went through the roof.

Whereas many luxury firms initially dismissed the metaverse as all hype and no substance, Treifus spotted an opportunity.

Initiatives such as forming a ‘gaming squad’, creating Gucci-clad avatars, selling luxury virtual sneakers and buying a plot of virtual land, cemented the brand’s place as a first mover in the metaverse.

When?

By 2022, a multitude of luxury brands were rushing to get a foothold in the metaverse market.

Where?

Gucci was a worldwide brand, operating more than 500 stores with over 20,000 employees.

Key quote

“We have taken the view that we could lean into opportunity. That doesn’t mean that we must embrace technology for technology’s sake. Rather, we look for opportunities that can enrich the experience of our customers and lead to a deeper engagement with our community.”
Robert Treifus.

What next?

Despite Gucci’s standing in the metaverse market, more luxury brands started taking advantage of social gaming and NFTs (non-fungible tokens) to tap into the cultural zeitgeist and monetise a potentially sizeable opportunity.

In the spring of 2022, Gucci’s senior management would meet with investors and analysts for the biannual update on the company’s strategy, financial performance and future outlook.

Triefus and his colleagues contemplated the best way to position the metaverse business. What could the metaverse contribute to the personal luxury goods industry revenue and profit pool? What market share could Gucci realistically seize? And what could the company do to rein in operating costs while fostering learning and innovation?

AUTHOR PERSPECTIVE 

Author perspective

On the reasons for writing the case…

Stefano said: “The metaverse – the three-dimensional successor to the internet we use daily – is a polarising subject as business leaders have vastly different views of whether, how and when it might take shape. Yet, amid debate and uncertainty, they must strive to form a practicable vision and strategy for the metaverse. When it comes to the metaverse, or any other new, ambiguous opportunity, decision makers need to hone their edge in three key areas: strategic fit, effective forecasting, and innovation and learning. Our case study focuses exactly on these areas, linking theory and practice.

headset Gucci

On the case writing highlights…

Stefano continued: “We all recognise a great story when we read one. But when it comes to write a teachable case study, data comes first. My co-author, Umberto Lobina, and I formed hypotheses and identified the needed data sources and metrics long before we started writing the case. We were lucky because Gucci’s parent company Kering is exceptionally transparent in reporting financial and operational data. Also, Umberto did a great job liaising with Gucci’s key stakeholders, securing their availability and support throughout the case preparation process.”

On teaching the case…

He continued: “The case has been received enthusiastically by masters-level students and business executives as they could relate to the challenges the protagonist, Robert Triefus, faced to overcome the inherent tension between experimentation and monetisation, from the early steps in gaming to establishing a metaverse business unit with P&L responsibility, and refining a test-and-learn approach reining in operating costs while increasing innovation and learning.”

On case writing tips…

Stefano suggested: “Immerse yourself in the subject you want to document, ideally long before you start writing the case. Explore the subject from a variety of angles until you identify a framing that resonates with you and your target audience. And don’t be afraid to share your interim findings with colleagues and students. Exposing your work to criticism early in the process will save time (and unwanted surprises) later in the process.”

THE CASE 

The authors

stefano Turconi
Teaching Fellow of Strategy and Entrepreneurship
Umberto Lobina
Junior Engagement Manager

The protagonist

Robert Triefus
EVP of Brand and Customer Engagement
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CASE - Reference no. 823-0089-1
TEACHING NOTE - Reference no. 823-0089-8
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