FASHION MARKETING - BURBERRY

1- Overall Context

The year 2014 has been a huge turning point for Burberry with Angela Ahrendts leaving the company and with Christopher Bailey taking over major roles as the Chief Creative and at the same time the new CEO of the company. As the annual revenue grows more as a result of a stronger Burberry under the undeniable leadership of past and current CEO’s Rose Marie Bravo, Angela Ahrendts and Christopher Bailey, the company is moving upward as it embraces the innovations and new challenges of the current times. Burberry still revolves around its values and identity of keeping the brand unified, strengthening its origin and history, emphasizing on its british legacy by creating a strong focus on its core product which is the trench coat in which Burberry is famous for, building a stable structure amongst its internals and employees which provided a venue for employees both recent and veteran to grow and maximize their potentials and capabilities, and to become a forward thinking brand by adapting and even innovating to the growing changes of modernity and digital technology. As Burberry now grows with operation for more than 200 stores, hitting its revenue more than double from 2006 and obtaining a growing number of more than 11,000 employees, through its new leadership under Bailey, Burberry is not pacing down as the brand strengthens its core to provide a complete customer experience. Burberry’s products are divided into Accessories, Women’s, Men’s and Children’s in which these products go through a strict standards of design, product development, as well as merchandising and planning. Architecture was also one of the main focus of the constant improvement and innovation under the current Burberry wherein the advancement of technology was heavily adapted to the new concept of their new flagship store in London. By using “microchips” and “magic mirrors” and even equipped with surround sounds system which can provide live entertainment since the brand is also collaborating with new British artists. The new store reflects the runways of Burberry, providing more information about the products and services and most of all bringing a whole new level of customer shopping experience for Burberry’s consumers. Lastly, the strengthened Burberry also made sure that as high as the quality of the products and as innovative as their new concept in architecture, the brand’s creative media is stronger than ever. Burberry’s attack on Creative media is highly visual, technology driven and very interactive as the brand strengthens its reach to its consumers around the world. Through Burberry’s various social media platforms and a highly informative website known as the “Burberry World” which also serve as an e-commerce for the brand, the company is able to connect not only to its consumers but also to their employees as their creative social media platforms reflects the image delivered by Burberry. Through the constant efforts of strengthening the brand, Burberry stands firm as it faces the challenges of modernity, strengthening its market, satisfying the new change of leadership from Ahdrendts to Bailey, as well as internal and external changes surrounding the brand.

2- Questions

A. Main changes that Ahrendts brought were: PRODUCTION
- Unify Burberry’s identity and image by cutting down too much licences, creating one culture, direction, brand image in different countries.
- Concentration of production in UK to strengthen history, origin and legacy as a true British brand which also strengthened the positioning of the brand.
- Give importance to the core products of Burberry such as the trench coat, which the goal of producing a constant collection, inventory as well as style and cut assortment to fit the needs of different countries while still maintaining the focus on the consistency of its core products distributed in stored across the globe. INTERNAL ORGANIZATION
- The current internal organization changed from seven to two executive officers for the entire world. This change allows Ahrendts to have better transitions and disseminate information clearly.
- Young generations have more responsibilities because the CEO understood that young people will create and manage the brand in the future, and they could propose innovative and original ideas for the good of the brand. To boost them, Burberry put in place “a strategic innovation council” that allowed employees to have crazy ideas and generate new concepts. CEO and Bailey also organized a strategic executive council, and “Icon Award” to motivate employees and recognize their contributions.
- Creation of a Creative media team to manage, have the power on all Burberry’s actions of the brand and transmit appropriate values and culture on Online and Offline (events, social media, advertising…). This new team is a capital gain for the company because it reflects the “British-Style” that the CEO wants to promote. Employees were trained on how interact with customers in order for them to “educate” about Burberry’s values. Another benefit of this new structure is that the CEO arrived to save money because she didn’t have to work with an external agency.
- Usage of modern tools, like Facebook for the internal communication. COMMUNICATION/MARKETING
- With the CEO’S common sense and creating the Creative media team, the communication and marketing strategies were totally reviewed. As oppose to how Burberry use too much Internet tools, it is now simplified but strengthened by creating a revolution. Today, Burberry is one of luxury brands that has an innovative, attractive and logical communication. There are different kind of Online platforms for specific demand such as, Burberry World, Burberry Acoustic, and Art of the Trench. These actions are in continuity of Burberry’s decision: create a special charismatic luxury brand that promotes a British universe, touching different areas like music and personalization. “Online, Burberry was one of the dominant brands in luxury fashion” page 6 paragraph 2 In conclusion, Ahrendts arrived to create a connection between all the teams with intelligent and smart tools. Concerning the image and identity of the brand, she understood that to communicate to external targets, employees have to be motivated, take decisions, know the brand by heart and live the brand, “British-Style”. Ahrendts with her strong partnership with Bailey, totally unified and revolutionized the brand internationally in all its aspects; products, architecture, and media, and internal organization.

B. Embracing new Technology

* Apple iPad: a bridge between offline and online shop
Every sales associates are equipped with an Apple iPad. Through these, associates are able to track the customer’s purchasing history. This also allows to generate database of product availability in the store and in the central warehouses, provide detailed product information. Through this platform, with the help of sales associates, customers can also purchase online and enjoy free delivery service. It is a good way to connect the brick-and-mortar and online shop. This is a good strategy for Burberry to make itself more modern compared with other luxury brand, save labor cost and no matter how small the shop or wherever it’s located, products are available offline and online to provide customer convenience.

* High-technology driven: an innovative competitive advantage
Burberry Flagship stores are armed with high technology such as radio-frequency identification microchips, digital display and audio-visual displays. People can use high-technology to appreciate the advertising, runway shows and new collections. This gives Burberry an innovative competitive advantage as it is the first mover of such kind of in store technology experience. This also adds on to Burberry’s brand image as a forward thinking brand as it strongly keeps up with the advances of technology.

* Burberry World
Burberry build up its own official website called “Burberry world”(Domain: www.burberry.com), which Burberry employees and customer can search information and obtain the products for themselves.

* Burberry Chat
The employees and key partners can view and discuss company announcements, communicate through working groups and manage key relationship. Bailey updates on it by creating a video about current topics and updates for the company. This strategy increases the effectiveness of work, disseminates information faster and resolves problems efficiently.

* Social media
Burberry uses social media to express their brand image and reputation like
Twitter via “Twitterwalk” which greatly appeals to the customers from younger generation which generates a bigger market for the brand.

For Burberry, it puts the new technology in service, design and interior, and build up own official website, create own software, use social media to spread brand image and reputation. By embracing technology, Burberry can provide its customers with more comprehensive services and interact with customers not only in, but also out of the store. Equipped with high technology, Burberry only proves its capabilities as a game changer for the whole luxury industry.

C. How Burberry is touching its customers - Strategy:

As we speak about before, we viewed that Burberry touches its customers through 3 different aspects: Products, Architecture, and Creative media. As far as we are concerned, Burberry has a good strategy which could develop and keep its target customers very well. They let the customers not only learn about their products but also make them experience the brand’s universe through its online world and physical spaces that are high on visual imagery and advanced technology. They bring the customers to a whole new level of purchasing experience which is also driven by the company’s constant efforts to strengthen its product image, enhance its product value to satisfy the needs of their customers. * Burberry has wide categories: Accessories, Women’s and Men’s apparel, Children’s apparel with accurate brand extensions to fit every customer’s taste.

| Target Customer and Position | Revenues(%) | Prorsum | -Bringing the key features of haute Couture-Exquisite craftsmanship and innovation-Most fashionable and dedicated customers | 10% | London | -Core label-Smartly tailored-Professional clothing | 40% | Brit | -Sportier and casual wears-Suitable for spare time | 50% |

* Burberry provides personalization services; initials on the products as well as customizing the cut and style of the trench coat to fit customer’s location and preferences. * Burberry has a multichannel distribution from high-end department stores, specialty stores to online stores which provides consumers for more venues to exercise its purchasing power. * In stores, the digital technology which took them over a year to build providing various functions like recording the personal shopping history in Burberry and allowing customers to purchase directly on the floor but no needs to a fixed register. It is a fantastic movement in Burberry’s strategy. At this info era, Burberry provide us a better shopping experience through these technologies. Customers would feel convenient and fast when they decided to make the purchase. * RFID technology could show the details to the customers through the numerous “magic mirrors” in the shop which provide other clothes and accessories to match with. And also with RFID ,Burberry can make more profits through stimulating customers’ desire to buy more items which can match with. * Burberry has a unique model of creative media for luxury brands, such as “Burberry World” “Burberry Acoustic” in online platforms, and also the fantastic runway fashion shows combined with high quality concert. It is a good way to enhance brand image and attract customers in multi-direction. * “runway-made-to-order” systems makes the consumers able to purchase items while the runway is ongoing
D. Challenges faced today

* Maintain old customers and invest on new market especially the younger market Faced with the political and economic instability background, it is more difficult for Burberry to control itself. Though Burberry still got the increasing sales and is able to keep itself profitable, how to control the market and maintain the customer also becomes an indispensable challenge. For this, Burberry uses the digital channel to tell stories of Burberry including its history, clothing fabric and even runway show in which they also create the opportunities for personalization. While having the benefit to learn about Burberry’s history and products, customers not only enjoy the purchasing experience but also get the knowledge in the product and the brand they purchase. To find and open new market, based on the original brands it has: Burberry Brit, Burberry London and Burberry Prorsum, Burberry operate the new collection-Burberry Bespoke collection which let clients to personalize their iconic trench coat, they can even share and purchase across social media channels, appeal to the younger and more fashionable customer who likes to be different. To open the new market, involved in new technology in decoration and service (via apple iPad or Burberry official website) also bring Burberry what they want. First step, let teenagers or younger generations know what is Burberry, and what Burberry stand for, while Burberry build up a “Burberry World “(official website) to get this point, and via modern media and high-tech, it is not only stand for old, long-history and something else, but also high quality, various products to choose and also a brand always catch up with the modern trend. Second, how let them become the loyal customers, Burberry Prorsum and Burberry London maybe too expensive and mature for them, so Burberry launch Burberry Brit collection, they can also experience the exclusive service and high quality product. Social media and various events are platforms used to maintain the interest of their growing market.

* Challenges within the international retail landscape

For Christopher Bailey, it was the first year for him to be the CEO of Burberry, under his leadership, Burberry ‘s revenue was up 11% led by a 14% big jump in retail sales, however, this still has not satisfied the investors. To adjust the strategy and reconnect with the customers, the company decided to focus more on core product: Trench coat. They only provide 3 fits and 3 colors for this collection; fragrance-My Burberry, with its Kate Moss and Cara Delevingne to be the ad campaign, they all can be the representative figures in their own time. This can make cash flow more smoothly, share more markets in the world. Regardless the background of shrink market.

* Remain the top place As we could find in the case, Ahrendts did a lot for the Burberry and make it become popular among the world, bring the new thing into Burberry, so it is not a easy job for Bailey to move on, how to make brand always in the top place and how to bring Burberry new are the big challenges. While Bailey repositioning the brand position and try to keep brand value through innovation, not only about the product but also in the management of employees, bring in new technology and control everything about Burberry, to achieve such goal.

3- Key Learnings

* Digital technology can save labor cost and build the bridge between offline and online shop, also, it helps to operate the new market especially with regards to targeting the younger generation. * Technology improvement would provide customers a better shopping experience. It will help to enhance brand image and increase the customers' loyalty.

* Before changing the external aspect of a brand, it’s really important to have a good internal structure because the brand’s employees are the people who will transmit the brand identity and live experience to consumers. e

* Importance of creating harmony and engagement among employees in which Burberry creates different tools for them to generate new ideas, know the brand as a whole and maximize the potentials and capabilities of the teams.

* As Burberry is a huge “luxury” brand, it’s primordial to have the image around the world. That stores have the same collection, the same speech on the collection and the same knowledge about the Burberry British-Style to transmit the core values of the brand.