Business lessons from Burberry: how the brand smashed its competitors

By on July 17, 2013
Burberry

The luxury fashion label has announced great results again – how does it do it? Gabriella Griffith reports. 

We are living in precarious times for fashion retailers. Brands from the whole spectrum of price points are falling into the administration abyss each quarter. Yet Burberry proclaimed ‘better than expected’ results on Wednesday, with 13% growth for the three months prior to July (analysts had predicted just 5.5%).

The brand has put its triumph down to a popular Spring/Summer collection, increasing interest in its menswear and accessories collections, and strong growth in China.

That may be true for this season, but Burberry has been en route to victory for some time. There was a time, not long ago, when Burberry’s famous check was more likely to be draped around the shoulder of an Eastenders actress or football hooligan than the sloany characters and top celebs who do it now.

It was the hiring of an American, Angela Ahrendts, back in 2006, that fired the starting pistol on the turnaround of the great British label. A series of very clever decisions saved the brand from its downfall.

So what is a brand to do to mirror this success?

Well, short of poaching Angela Ahrendts (virtually impossible given that last year she was the highest paid chief executive in the FTSE 100), you might do well to take note of these bold Burberry moves.

Here are our top five winning moves from Burberry

1. Installing a creative director

When Ahrendts took the helm of Burberry it was a bit of a mess. There were 23 licensees spread all over the world, all able to design pieces and launch them under the Burberry name – from dog leashes to kilts. With no central quality control, the brand was getting lost in mediocrity.

Ahrendts knew this needed to end and so appointed promising young Burberry designer Christopher Bailey to become creative director – with all Burberry products okayed by him.

‘Great global brands don’t have people all over the world designing and producing all kinds of stuff,’ Ahrendts told the Harvard Business Review in a rare interview.

‘It became quite clear that if Burberry was going to be a great, pure, global luxury brand, we had to have one global design director. We had an incredible young designer named Christopher Bailey, with whom I’d worked at Donna Karan and who I knew was a sensational talent.

‘So I introduced him early on as the “brand czar.” I told the team, “Anything the consumer sees—anywhere in the world—will go through his office. No exceptions.”’

2. Conquering China early on

In 2010 Burberry bought out its Chinese franchise partner for R1b, which turned out to be a small price to pay for the control it gave the brand over their Chinese operations.

The deal saw Burberry take over 50 stores in the country, strengthening its brand and reaching shoppers directly. It now has over 60 stores.

The opening of the flagship store in Beijing has gone down as one of the most lavish parties ever thrown by a fashion house (and that’s saying something). One thousand guests went along, pop band Keane played, it hosted the first ever holographic fashion show and there were wall-to-ceiling television screens. Swish.

3. Mastering technology

As you might guess from its holographic efforts, Burberry and cutting edge technology have been great friends for some time now.

It was extremely quick off the mark using iPads, furnishing its stores with them back in 2011.

Ahrendts started her technology revolution in China, given that the age of luxury shoppers there is much younger than in the UK, and therefore more tech-savvy. But in 2012 the brand’s Regent Street flagship received a technology make-over to such an extent it was described at the time as ‘a walk-in website’.

The store has 22-foot screens beaming images of collections and catwalk shows. Its clothes are fitted with interactive screens and radio frequency identification tags, which allow customers to swipe clothes past screens and get extra information.

4. Social media mastery

A fan of technology firsts, Burberry hosted the world’s first Twitter catwalk show at London Fashion Week in 2011, showcasing the latest collection on the social media platform before anywhere else. Christopher Bailey himself took over the twitter account for a day in preparation of the event.

Not satisfied with using the likes of Twitter and Facebook, Burberry has even created its own social platform, The Art of the Trench. The site encourages Burberry fans to post pictures of themselves wearing their Burberry macs and comment on or ‘like’ the images of others.

For this kind of luxury brand, creating this social accessibility is generally a no-no as many of big-ticket brands like to remain aloof. Burberry however has opened itself up to its fans with great results.

5. Canny, culturally relevant celebrity models

Burberry has done as much as it can to drive home its British-ness. The Made in Britain badge has made a resurgence over the past few years and who better to ride on its coat tails than the very English inventor of the trench coat – Burberry. One of the ways the brand makes this salient point is through its models.

Brit actress Sienna Miller is the latest face of Burberry, along with little Romeo Beckham (his campaign has been named by the company as one of the reasons for its menswear boost). Looking back you’ll also find Harry Potter actress Emma Watson.

 

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