Wednesday, October 14, 2015

Why Gucci is Losing at Social Media

Luxury fashion houses, such as Prada, Louis Vuitton, and Gucci, are facing a turning point. Even being some of the most recognizable names in the world, some of these brands are facing declining profits. Prada, for example, faced a 28% decline in net profit in the last 9 months of 2014, with a growing reputation of being "outdated" and lacking relevancy. Other up-and-coming brands, like mid-level luxury brand Kate Spade, are becoming praised for their well-curated online content. With the rise of social media, these brands now face an enormous task - being widely recognizable and gaining market share, but also remaining elite and exclusive.

http://www.designscene.net/wp-content/uploads/2013/10/Prada-Store-Orlando-03.jpg

To look at how these brands compare in their social media influence, we turned to Instagram, which has an API to query for limited data. Looking at these brands' number of followers, hashtags, and averages on likes and comments for their 20 most recent posts, we analyze how "with it" each of the top luxury brands truly are.


We can see that in terms of pure numbers, Chanel, Prada, Dior, and Gucci reign supreme in the number of hashtags of those companies' names. A quick search through Instagram branded hashtags indicates that people usually tag pictures of that company's products that they've bought, of its stores, or of products (mainly counterfeits) that they are trying to sell. Having a large number of hashtags indicates wide recognition - this intuitively seems correct. Taking an informal survey of my friends, it seems that everyone - even disinterested males - have heard of these four brands before.

Looking at the number of followers, however, it seems that this hierarchy doesn't hold. In terms of followers, Louis Vuitton ranks number 1. Chanel, Prada, Dior, and Gucci still have a large number of followers, but they are nearly caught up by brands like Michael Kors, which actually does overtake Prada.




Looking at the proportion of tags and followers, we can more clearly see which brands have more loyalty. Louis Vuitton and Michael Kors have a greater proportion, out of the total of all the brands, of followers than they do of tags. This may mean that they have a loyal fan base - getting more interested followers rather than random tags. It may also mean that they have better content, or the other brands have worse content - lots of tags from people liking the product, but less followers because their Instagram feeds are just not that good.

We also look at the average number of likes and comments on each brand's 20 most recent posts.


This graph shows a plot of luxury brands with their average number of likes per post on the x-axis and the average number of comments per post on the y-axis. We draw a regression line to see trends in the relationship between the number of comments and the number of likes, and constrain this regression line to have a y-intercept of 0, since it makes sense that a post with no likes should also have no comments. We also draw confidence bands for this regression line, which is a confidence interval for each predicted y-value, within which sample points should fall if they follow this postulated distribution.

Again, we see that well-followed brands from above like Chanel, Michael Kors, and Louis Vuitton have a high absolute number of likes on their posts. One main outlier is Kate Spade, which has a much higher number of comments per post than predicted. This is indicative of the Kate Spade brand's social media savvy, which they have focused on building as an integral part of their marketing strategy. Kate Spade also has a few posts with an extraordinarily high number of comments because of their giveaways and promotions that depend on social media interaction, such as one in which they raffle off prizes to commenters.


Having a high number of comments in proportion to likes may show that Kate Spade has relatively loyal followers who feel like they're interacting with the brand and want to communicate back. Many of the comments consist of users tagging their friends, recommending them the advertised products.

An outlier on the negative side is Gucci, which has a lower number of comments than predicted.


This may speak to the reputation of Gucci as catering to the middle-aged wealthy, rather than the young and social media-savvy. However, the fact that Gucci had a large proportion of followers, as shown above, but a low absolute number of likes per post, may also speak to poor content on its Instagram page. As shown above, Kate Spade posts are accessible and straightforward (cupcakes, happiness) while Gucci posts are avant garde and harder to understand. Perhaps Gucci strives to maintain its image of absolute luxury and high-fashion and wants to maintain its exclusivity.


A photo posted by CHANEL (@chanelofficial) on

However, comparing Gucci posts to Chanel posts, Chanel being another extremely high-fashion competitor, it seems that Chanel's content is still more accessible and aesthetically appealing than Gucci. Chanel also features popular celebrities like Cara Delevingne and Kristen Stewart while Gucci posts do not leverage the same star power. Perhaps Gucci should revise its social media content to be more traditionally appealing in order to avoid putting off its followers and by promoting more celebrity endorsements and giveaways through social media posts.


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