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Burberry LTD in 20141

Christopher Bailey stood inside the Burberry Flagship store in London, the last one to leave after

the hustle and bustle of a city day. In 2012, he had introduced this store as a culmination of the

revolutionary new direction the clothing company had taken, seamlessly merging the digital and

tangible into a brand known equally for its cutting-edge technology and for its high fashion. He

had been serving as chief creative officer for Burberry then, working under then-CEO Angela

Ahrendts to transform the company. With Ahrendts at the helm, Burberry had been transformed.

Since 2006, the company had more than doubled its revenueand quadrupled its operating profit. Omnichannel marketing a new approach streamlining and synchronizing everything the company did online, offline and around the worldbrought the brand into the twenty-first century. Awards recognizing the company for their innovation and foresight poured in. But the

last six months of 2014 had seen a massive change in the structure of Burberrys leadership. Ahrendts had departed the company to work as senior vice president of retail and online stores

for Apple, and Bailey had been named as the new leader of the company in a title created just for

him: Creative Chief Executive Officer. It was a first in the industry: the designer, the creative, got the keys to the kingdom.

The future of Burberryall aspects of it was placed squarely on Baileys shoulders. The digital age was definitely upon them, and companies had to be agile to stay competitiveespecially one that had established itself as a leader in this new space. A company that above all

respected its heritage, the culture of Burberry centered on brand integrity, disciplined execution,

constant evolution and balance across channels in its business strategy. Its culture was one of

creative thinking, cross functional collaboration, intuition and open communication. The core

values of the companyprotect, explore, and inspirewere the foundation of where the company came from, and where it was going.

As Bailey looked out over the floor, watching the perfectly timed videos and interactive displays

blend seamlessly with the static fabrics and product presentation, he wondered: what was it

going to take to keep Burberry soaring the way that it had the last decade? And, perhaps more

importantly, was he going to be able to maintain the creative inertia that had brought the

company to its coveted position today, while also running the $2.33 billion brand?

1 This case was prepared by Ashley Meigs, MBA 2015, under the supervision of Lawrence J. Ring, Chancellor Professor of Business and EMBA Alumni Chair in Executive Education, and Professor Ronald L. Hess, as a basis for class discussion. It is not intended to illustrate either effective or ineffective management. Copyright, 2015, by the Mason School of Business Foundation Board.

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The Luxury Market

In December 2014, the luxury goods market had exploded. Couture clients were no longer the

name of the game, as the number of luxury goods consumers worldwide exploded to 330 million.

Spending on luxury products (jewelry, watches, clothing, handbags, etc.) had risen at double the

rate of global GDP (Exhibit 1). Following the global economic downturn in 2008, the luxury

market saw growth accordingly, and largely in Asia. A variety of global trends affected the

luxury industry. Once, product design, sourcing of raw materials, distribution and marketing

were all controlled by the luxury brands. Following the emergence and dominance of the

internet, however, luxury brands had to readjust their strategy. The internet placed power in the

hands of the consumer, allowing them to compare pricing, shop on their terms, adjust

expectations with regard to price, value and brand. Other key influencers in the luxury market

were ubiquity versus exclusivity (many luxury brands were slow to adopt an online sales

platform), the role of social media (giving a strong voice to the consumer), omnichannel,

globalization, tourism, custom, and communication. For a more detailed analysis of the macro

environment of the luxury market, please refer to the Digital Exhibit, which links to a

comprehensive Deloitte report.

The definition of luxury too had changed: once synonymous with overindulgence, branding and a wide variety of uses and companies mean that a luxury product could be authentic, aspirational, absolute or affordable. The generally enormously high price point associated with luxury goods came from a variety of different reasonings on the consumer side: status,

brand value, quality, and level of income. Luxury goods companies relied on telling this story

effectivelywhy is their product worth it? What is the X factor? It almost always included craftsmanship and a sense of place. For some luxury brands, the designation is not just

represented by a higher level of quality, but rarity (Pagani, an Italian car manufacturer, makes

just 38 cars a year). Other companies held that even though they might be mass-market or

manufactured in China, the soul of the company comes from the creative and legacy of a brand. The question almost every luxury product manufacturer (Exhibit 2 for a list of the

biggest and best) had to ask themselves was, is luxury in the eye of the beholder? And, if so, whos eye were they trying to catch? It was an entirely new market from the one Burberry first entered into, and was symbolic of the many changes both the fashion industry and brands had

been through over the last hundred years.

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Exhibit 1 Source: The Economist

Exhibit 2 Source: The Economist

Background of Burberry

Thomas Burberry, the former dressmakers apprentice who founded the company in 1856 when he was 21, set out with one, clear goal: produce innovative, functional outerwear. Burberry

developed a breathable, waterproof fabric, gabardine2 , which was instantly successful and

2 Gabardine is a tough, tightly woven fabric used to make suits, overcoats, trousers, uniforms and other garments.

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allowed him to open his first store in 1891. Burberryor Burberrys as it was known for most of the companys historyquickly became known for its high quality outwear. In 1901, the now-famous Burberry Equestrian Knight Logo was developed and registered as a trademark, and

Burberry was selected as the official outfitters for Ronald Amundsen who went on to become the

first man to reach the South Pole, as well as Ernest Shackleton (Exhibit 3) the leader of the

famous expedition across Antarctica.

Exhibit 3 Source: Burberry website

During the Boer War in South Africa at the turn of the century, British officers began wearing

Burberry weatherproofs, preferring the lightweight material to the heavy, rubberized Macintosh.

In 1912, Burberry patented the garment that would become synonymous with the brand: the

Tielocken, the early predecessor of the trench coat. Seeing the popularity of the garment among

high ranking officials, the British War Office gave its official approval to the Burberry

innovation, and the coat was used throughout WWI and the time after. Part of the appeal of the

trench coatgiven the name during the First World War was its sleek, lightweight design that closed with a single strap and a buckle fastening, and featured only a button at the collar. The

success of the military Burberry was cemented when Lord Kitchener, the commander in Chief of

the British Army, began wearing it himself.

The popularity of the Burberry name was sealed, and Thomas Burberrys dream realized. The brand was known throughout England as high quality outerwear. In the mid-1920s, the now-

iconic Burberry check pattern was created, and used as a liner in trench coats. Specially-designed

aviation garments were developed by the brand, outfitting completely A.E. Clouston and Betty

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Kirby-Green when they made history achieving the fastest flying time to South Africa in 1937,

piloting the aptly named Burberry. The Burberry trench coat became an iconic, inherently British item, establishing itself in the hearts and minds of customers around the world, and was

seen in films such as Breakfast and Tiffanys and Casablanca.

In 1955, the company was purchased by Great Universal Stores, marking the first change in the

direction of the Burberry brand. In the late 60s/mid 70s, Burberry began making its transition to

everyday outerwear. The iconic check pattern was used not just as a liner, but for umbrellas,

scarves, luggage and other accessories.

The brand became popular with the British casual clique, and took off in Asian and US markets,

where consumers clamored for the companys very British, heritage look. By the mid-1980s, exports made up more than 60 percent of company sales.

In the early nineties, believing that the company could not ride exclusively on the laurels of its

heritagethe company was concerned that a fine tradition is not, in itself, sufficient todayBurberry began moving away from the style that had been their trademark for the last century. It

sought to develop items for younger, more fashion-aware clients, and licensed their name, iconic

check pattern, and knight logo. While this strategy led to significant increases in sales, thousands

of goods bearing the Burberry name entered the marketwithout the control or approval of the design team. The lack of direct oversight in products meant that just about anything ranging widely in quality and makecould be sold under the Burberry brand, with the protection and reputation for excellence the company had spent so many years developing. The brand was no

longer in their control.

The cost was a severe blow to the Burberry name. Its place as a prestigious luxury brand was in

serious jeopardy. Facing cultural backlash from its target segment and the risk of losing the

equity of its brand, Burberry hired Rose Bravo in 1997 to rejuvenate what had become a stagnant

clothing line. Bravo immediately began breathing life back into the company, hiring Italian

American designer Roberto Menichetti to retool the brands image. The result was a stunning new ready-to-wear womens line, and the now-iconic Kate Moss as the face of the brand, whose own reputation as an ultra-hip, cool Britannia played perfectly into Bravos vision for the company (Exhibit 4). Bravo split Burberry into three distinct lines: high fashion Prorsum, a core

collection under the Burberry London label, and a younger line called Thomas Burberry.

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Exhibit 4 Source: Burberry Website

The reinvention of Burberry was underway, but far from complete. The brand, while back in the

minds of the consumer as a luxury good, still struggled with its identity. Was it a heritage brand,

or cutting edge fashion, or both? And while its initial effort to reestablish itself as a brand worth

having had succeeded greatly, Burberry still faced the challenges inherent in the new

millennium: how does a fashion company stay relevant in an age of technology? How do those

two worldsthe old world of its inception and the new world of endless change and innovationmerge successfully?

Ahrendts and Bailey: Revolution of the brand

When Angela Ahrendts assumed the role of CEO in 2006, there were a lot of questions

surrounding the new leader of the company. In what kind of direction would she take the

company? Was she going to be as good as Bravo? Was she going to be better? What if she was

worse?

When Ahrendts arrived in London, she looked around, examined the company, and had one very

simple question: Where were all the trench coats?

Arendt recounts:

With its rich history, centered on trench coats that were recognized around the world, the

Burberry brand should have had many advantages. But as I watched my top managers

arrive for our first strategic planning meeting, something struck me right away. They had

flown in from around the world to classic British weather, gray and damp, but not one of

these more than 60 people was wearing a Burberry trench coat. I doubt that many of them

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even owned one. If our top people werent buying our products, despite the great discount they could get, how could we expect customers to pay full price for them? i

Ahrendts believed that the brand had gotten off track once again. While Burberry was respected

and acknowledged as a luxury product, it was focusing on the wrong kinds of products. A shift

had been made from the outerwear that was the heartbeat of the company to a wide collection of

products without focus.

We had 23 licensees around the world, each doing something different, she recalled. Theres nothing wrong with any of those products individually, but together they added up to just a lot of

stuffsomething for everybody, but not much of it exclusive or compelling.ii

Ahrendts had her work cut out for her. She needed to narrow the focus of the brand, but with

annual revenue growth of only 2% an abysmal statistic in a rapidly growing industryshe would need to reinvent Burberrys position in the luxury brand category as well.

In luxury, ubiquity will kill youit means youre not really luxury anymore, she said. And we were becoming ubiquitous. Burberry needed to be more than a beloved old British company.

It had to develop into a great global luxury brand while competing against much larger rivals.iii

One of the biggest issues that Ahrendts noticed was a lack of consistencyin experience, in products, in serviceacross Burberry stores. A hallmark of a successful brandbringing to mind brand giants of the early 2000s such as Starbucks or Appleshe knew that this was a central issue to the brands reinvention.

At Burberry, inconsistencies in product development ranged dramatically from country to

country. During her first six months on the job, Ahrendts found that almost every region she

visited had a different plan.

In Hong Kong, I was introduced to a design director and her team, who proudly showed me the line they were creating for that market: polo shirts and woven shirts and everything with the

famous Burberry check, but not a single coat, Ahrendts recalled. Then we went to America, where I was introduced to another design director and design team. This team was creating

outerwear, but at half the price point of that in the UK. Furthermore, the coats were being

manufactured in New Jersey. So we were making classic Burberry raincoats that said Made in the U.S.A.iv

Great global brands dont have people all over the world designing and producing all kinds of stuff, Ahrendts said. 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. (Exhibit 5 shows Burberrys revenue by destination).

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Exhibit 5 Source: Burberry 2013 Annual Report

Enter Christopher Bailey, a mild-mannered designer with a keen eye who had been with the

brand since 2001, first as a design director, then as creative director in 2004. Bailey, who knew

Ahrendts from working at Donna Karan previously, was tasked with, essentially, purifying the

brand. That meant a return to its roots, and a rejuvenation of Burberrys core products.

Its not unusual for a luxury company to be born from a single product and then diversify, Ahrendts said. Louis Vuitton began with luggage and Gucci with leather goods. But even as they diversified, each continued to earn the majority of its revenue from its original core

products. Surveying the industry, we realized that Burberry was the only iconic luxury company

that wasnt capitalizing on its historical core. We werent proud of it. We werent innovating around it.v

Bailey, who had already carved out a name for himself as a leader in both design and innovation,

became the czar of design: everything that a consumer could see, smell, touch had to be signed off by him, creating a uniformity and quality that the brand had lost.

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But Baileys role was far more than just a rubber stamp of approval. His task was not just to put Burberry back in the game, but shoot it directly to the top.

For Bailey, Burberry was more than just a brand, a label that was sewn on the lining of expensive

garments. It was an experience, something that captured the magic of its legacy and past, and, of

course, its inherently British DNA.

The challenge: return to the companys core productsspecifically, the trench coatbut bring it into the 21st Century.

The How of It

Changing the Burberry brand image could be boiled down to two key segments: the product

being offered, and the way it was being offered. As part of the return to Burberrys core, Bailey began taking the traditional trench coat and breathing new life into the garment. Calling it the

ethos of the trench, Bailey and his design team took to basing everything they did on the Burberry backbone. Literally everythingfrom store design to ad campaigns to new collectionswas based on the timelessness of the trench coat and Burberrys legacy.

Organizationally, the company structure also needed work. As shown by the disconnect between

the stores, Burberry needed to tighten up on not just its image, but the mechanics behind it.

Primarily, that meant shifting the companys structure from one that was historically corporatesomeone over every category of product, for both men and women to a focus on the brand as a whole.

Ahrendts recalls: In addition to putting Christopher (Bailey) in charge of all design, we had to hire functional expertisea head of corporate resources, a head of planning, and a chief supply chain officer.vi

It also meant, she said, a retargeting of where and how to sell. As part of entering the big race

with luxury brands, Burberry moved their retail focus to markets where competitors had a

presence, opening 132 stores from 2007 to 2013.

It also refocused its sales force.

Trench coats are among the most expensive items we sell (many of them are priced over $1,000), but the staff was least equipped to sell them, Ahrendts said. Our salespeople had become accustomed to selling what was easyrelatively inexpensive items such as polo shirts. On commission, theyd be better off selling one trench coat than 10 polo shirts. They understood the math, but they needed tools to fully appreciate and communicate why the trench was the best

investment for their customers. We established strong sales and service programs to put product

education front and center.vii

The brand invention led to much more than just a refocusing for the companys image: it also led to a dramatic increase in revenue, even compared to fellow luxury brands (Exhibits 6 through

8b). The company received much attention for this turn-around, winning a wide variety of

awards including Retailer of the Year in 2012 and a spot on Fast Companys list of The Worlds Most Innovative Companies that recognized them not just for their brand reinvention, but the skill with which the company was managed while doing so.

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Exhibit 6 Source: Burberry 2013 Annual Report

Exhibit 7 Source: Bloomberg, case author

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Exhibit 8a Source: Bloomberg, case author

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Exhibit 8b

Another important element of re-establishing Burberrys brand image was a massive retooling of the marketing and advertising efforts. For Ahrendts and Bailey, that meant a new campaign

targeted at a brand new segment: Millennials, the group of tech-savvy twenty-to-thirty

somethings who had reached adulthood at the turn of the century.

We also began to shift our marketing efforts from targeting everyone, everywhere, to focusing on the luxury customers of the future: Millennials, Ahrendts said. We believed that these customers were being ignored by our competitors. This was our white space.viii

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It also happened to be a segment that had no knowledge of Burberrys core product.

The effort had to be led by designwe needed to create outerwear that was innovative, cool, and so inviting that people would become repeat customers, Ahrendts recalled. Burberry used to have just a few basic styles of trench coats: Almost all were beige with the signature check

lining, and the differences between them were minor.

All that needed to change.

We had to infuse the new lines with our heritage, Ahrendts said. We also had to rethink our entire marketing approach for these customersto make it digital.

With Bailey at the helm, design took center stage. Marketing and advertising efforts became

more than just selecting a target, it was about creating a complete experience to go along with the

brand. The campaigns were a blend of the digital and the artistic, the modern and exciting with

quality and legacy, the old and the new.

With this in mind, Bailey brought the new brand image to life, both online and in-store. A series

of breathtaking photo shoots, centered on the trench coat, of course, helped to re-establish the

Burberry brand. The companys website went from disjointed to a seamless, glossy experience highlighting both collections and products with stunning visuals and music.

It has become the hub of all our marketing and branding, and a trench coat is always one of the first things you see when you go online, Ahrendts said. The site is designed to speak to that millennial consumer through emotive brand content: music, movies, heritage, and storytelling.

And we understand how critical it is. More people visit our platform every week than walk into

all our stores combined. And the majority of our employees at corporate headquarters in London

are under 30. They understand who we are trying to reach. ix

Of Baileys reinvention of Burberrys digital space, Fast Company wrote:

Bailey has deployed a digital arsenal to transform the way the brand speaks to its

customer. Under his direction, fast fashion went from meaning cheap designer knockoffs to a Tweetwalk in which Burberrys newest collection was visible to anyone on the Web before its models hit the runway. Likewise, his efforts to democratize a haute

house of style dont come from deep discounts. Instead, he made some items, such as the trenches, available to purchase immediately after the show-effectively blasting through

the barriers of fashions old guard and the arduous months-long wait for them to hit the stores.x

This democratization of the company was another way Bailey adjusted the brand image. Customer service became front and center for the brand, as well as making it an accessible and

affordable one, by luxury standards at least.

I think theres an expectation that all fashion companies have to be cold and austere and arrogant, Bailey said in an interview with The New Yorker. I just think there are other ways of doing things. xi

Bailey also was able to merge old British charm with Milan-worthy design, hitting perfectly the

type of clothing for which the market was clamoring.

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From a New Yorker piece published in 2009, author Lauren Collins recounts an interview with

the fashion-news director of Vogue, Sally Singer. Bailey, she said, has a soulful, reflective spirit.

He brought that to a luxury brand at just the right moment, when glitz and bling were on the way out, and he managed to do it in a way that was just downbeat enough.xii

The article continued: Bailey is interested in paradoxesdisheveled elegance, real fashion things against things that have a sense of heritage. His designs range from muddy floral dresses and luxurious, metallic trenches to, this season, pieces of jewelry inspired by barbed wire. Exhibit 9 discusses the corporate definition of the brand.

Exhibit 9 Source: Burberry 201 3 Annual Report

And those trench coats?

We have more than 300 SKUs, Ahrendts said. From capes and cropped jackets to the classic Burberry trench in a range of vibrant colors and styles, with everything from mink collars and

alligator epaulets to studded leather sleeves.xiii

And they arent going anywhere, either.

Today its taken for granted inside the company that the trench coat must remain our most exciting, most iconic product. It guides all our decisions, she said. Our sales associates understand it. This product is who we are.

Omnichannel marketing

In addition to maintaining the integrity and message of the brand, one of Burberrys primary challenges was communicating and serving its consumers in a world that had been

revolutionized by digital and technological innovations, creating a shopping space that did not

exist for most of Burberrys existence as a retailer.

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Along with a strong and innovative presence in both the traditional and social media spaces, a

massive piece of the 21st century Burberrys strategy & marketing to end-customers (and department stores that carried their products) was the idea that Burberry was not just a product,

or group of products, but rather an experience. This was done through a unifying of all aspects of

the brandphysical stores, ecommerce, website experience, training of associatesto create a seamless and extremely positive experience for the customer, regardless of which channel they

were in.

As Burberry stated boldly and in large font on its investor relations webpage, their strategy was

to enhance consumer resonance and operate more effectively through exacting use of brand assets and coordinated action across the global organization. One brand, one company.

In more colloquial terms, Ahrendts referred to the company at large as the million square foot store, indicating that every interaction, no matter what channel customers choose, was as crucial as the next.

Most dramatically highlighted with their flagship stores and their website, both characterized by

beautiful graphics, music and sleek presentation and display of key merchandise, omnichannel

strategy was inherent in all facets of the brand, and was what the company credited with an

increase of 17 percent in sales in August 2014.

On the purchasing side, this strategy also allowed shoppers to view inventory online in-store,

offered in-store pickup and allowed customers to ship packages from both warehouses and

individual stores. Training of sales associates allowed them to both communicate this to

consumers as well as order it for them on the spot. This strategy was also implemented through

consistency in brand image and experience, keeping its finger on the pulse of the latest social

media trends (and developing its own), and constantly innovating to see around the corners of

what customers wanted instead of playing catch up.

As a global brand, integrity and maintenance of quality was essential to Burberrys success. Through implementing this omnichannel strategy, the company was able to move as one,

coordinated organization, in terms of brand image anyway, instead of fragmented regional areas

(as it was when Bailey first took over as creative director).

This was highlighted in 2014, when the company transformed its brand image in Japan. From the company website:

Burberry strengthened its presence in this important luxury market through the continued

roll-out of the global collection and the Roppongi store opening. This is an important step

in aligning the local brand perception with the global positioning and away from its

premium status under the current licensees.

The commitment to brand integrity led to a wide variety of recognition globally. In 2014 alone,

Burberry was listed in Interbrands Top 100 Global Brands for the fifth year in a row, was highlighted by Fast Company as the seventh most innovative company in retail, led media think

tanks L2s Fashion Digital IQ index for the third consecutive year and was awarded Best Brand and Christopher Bailey named Menswear Designer of the Year at the British Fashion Awards.

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Place: Burberry sold its products through both retail (including digital) and wholesale (Exhibit

10). Offline, the company directly operated 497 stores: 215 mainline stores (brick & mortar) and

227 concessions inside department stores. This included flagship stores in key markets London, Shanghai, LA, Paristhat generally included cutting-edge technology and digital experiences along with an exhaustive collection of Burberry products, embodying the companys digital/fashion blend and emphasizing the integration of its online and offline experiences.

Exhibit 10 Source: Burberry 2013 Annual Report

In-Store Experience

Often quite beautiful and featuring a variety of digital innovations, Burberry stores sought to

give customers in-store the same kind of visual and personal experience they received online.

Said Ahrendts of the London Flagship store, when it opened in 2012, Burberry Regent Street brings our digital world to life in a physical space for the first time, where customers can

experience every facet of the brand through immersive multimedia content exactly as they do

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online. Walking through the doors is just like walking into our website. It is Burberry World

Live.xiv

One of Burberrys biggest focuses, therefore, was not bringing store experiences to the website, as other clothing companies were trying to do, but the inverse. In a 2012 interview, Bailey said

that, essentially, the digital world came first. The store on Regent Street was designed as a

physical manifestation of Burberry World Live.

Standing in line to make a purchase, for example, was a thing of the past.

We designed it like that because when you are shopping at home online, you are on the sofa with your credit card, Bailey said in an interview with The Guardian. You dont stand up and queue.xv

I find it weird that anyone would find it weird [digital-first thinking], he said.

Clothing in the store had chips that could be read by screens and mirrors using radio-frequency

technology.

Stores also included a wide variety of multimediathings like recorded and live performances and broadcasted fashion shows.

When a customer walks into a changing room holding a jacket, a feature piece on the store by The Guardian detailed, one of the mirrors might respond by turning into a screen showing images of how it was worn on the catwalk, or how it was made.xvi

The stores were also outfitted to give customers immediate answers about inventory availability.

A network of small high-speed lifts concealed behind restored paneling has been added because the online shopper, accustomed to knowing in the space of a click whether an item is available in

their size, will not put up with waiting the 10 minutes it could take a sales assistant to travel to

and from the stockroom in a building which has 25 staircases and 1,500 sq m (16,000 sq ft) of

backroom space, the article continued. xvii

Music, a self-declared passion of Bailey, also played a large role. The London Flagship store had

420 speakers and a stage for live music. Bailey hand-selected many songs, and the musical

section of the website, Burberry Acoustic, showcased bands that captured the essence of

Burberry through music, clothing and videos. Bands were given front-row seats at Fashion

Shows, and often used in ad campaigns.

People arrive at Burberry.com through many entry points, because thats how the internet works. They might find us through music, for example, Bailey stated.

The blend of technology, music and aesthetics merged in stores to hopefully create what Bailey

referred to as moments for the customer. At the end of a musical set, for example, rain might fall in the store, emphasizing both the mood and tone of the clothing, but also the inherently

British weather matched with the iconic Burberry heritage of British outerwear.

Online Experience

The Burberry Website, AKA Burberry World Live, underwent a dramatic transformation and

consolidation when Ahrendts took over as CEO. It showcased seamless transitions, a sleek

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interface and supplemental content, such as music and design ideas. Displayed prominently were

both the products as well as high resolution photos featuring products and models. The website

was active and available in 11 languages, and was a vehicle for showcasing new products, brand

images and social media initiatives. While at its core it served as a way for customers to browse

and purchase product, its design was structured to emphasize and re-emphasize Burberrys brand identity through catalog and runway photos, featured ad campaigns and videos (often

highlighting British celebs like Emma Watson and, most recently, Romeo Beckham), and

musical collaborations. The websites aesthetics and creative vision is mirrored by the in-store atmosphere, creating a seamless, blurred line for consumers shopping in either space to be immersed in the over-arching Burberry brand experience.

Product: Burberry sold a variety of products in apparel, accessories & beauty, broken down by

gender. Considered luxury goods, items were generally made with high quality materials. Burberrys signature product was its outerwear, specifically its trench coat, which came in a wide variety of colors and styles. As part of the multi-channel strategy, the same products were

available at every location. Exhibit 11 shows a revenue breakdown by type of product.

Exhibit 11 Source: Burberry 2013 Annual Report

Broadly, Burberry offered three types of products (Exhibit 12):

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Exhibit 12 Source: Burberry 2013 Annual Report

Apparel: Included a wide variety of clothing and outerwear, including bikinis, coats, hoodies,

polo shirts, short sleeved shirts, suits, trousers, shirts, and dresses.

Accessories: Included a wide variety of bags/purses (clutch bags, sling bags, crossbody bags,

etc.), ties, scarves, shoes (rain boots, pumps, flats, etc.), belts, wallets and hats

Beauty: In 2014, the company launched a complete selection of beauty products in a range of

colors for face, lips, eyes and nails, to complement its existing line of fragrances.

Specifically, the company had three brands (or lines): Burberry Prorsum, a style baseline for the

companys other brands; Burberry London, heritage outerwear that included business wear; and Burberry Brit, the more every day, entry-priced brand.

Value: Burberry was considered a luxury brand, defined by high levels of craftsmanship, brand value (as perceived by the consumer) and sold at a high price point. Most of Burberrys items were priced between $250 to $2000, with some items (trench coats) at the higher end. The

value in the Burberry brand name was emphasized by the companys omnichannel strategy, which incorporated ad campaigns, a seamless online and in-store shopping experience, and brand

perception in the world at-large. For Burberry, the entire experiencefrom digital to in-storesought to emphasize value through high quality products, beautiful and innovative atmosphere,

high levels of customer service, and continued efforts to maintain the quality and luxury

reputation that it had reestablished in the last decade. Broadly, the value of a luxury brand can be

determined by price, quality, aesthetics, rarity, extraordinariness, and symbolism.

People:

A big part of Burberrys approach included high levels of customer service. Associates were also equipped with iPads that allowed them to provide customers additional detail (videos, statistics

and information about Burberry products), order an out of stock item immediately, and use the

Customer 1-2-1 platform. A permissions-based iPad application tool, 1-2-1 allowed associates to

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create and view customer profiles in one place, including visual wardrobe, global transaction

history online and offline, and recorded product and fit preferences (Digital Exhibits).

Customer support was offered 24/7 by phone, email, live chat and a Twitter customer service

account. Associates also spent maximum time on the selling floor, making them more available

to customers.

As part of the omnichannel strategy, associate training was high priority and ensured optimal

inventory availability and improved selling techniques. Burberry invested heavily in advanced

training, physical and digital synchronization and improved merchandising disciplines,

incorporating the same digital and technological prowess demonstrated in its customer-facing

innovations to improve its salesforce.

Online, Burberrys salesforce took the form of streamlined and easy-to-find products, supplemented by an active online support staff, apps and a variety of content aimed at making

the browsing experience both digitally and in-store as enjoyable as possible.

Burberry also supported the continued training and advancement of their employees through

programs such as the Retail Management Program, which prepared retail associates for a career

in store management, and an extended and improved new associate on-boarding program, which

improved training and culture/brand insights for employees in London, New York and Hong

Kong. Burberry also supported the development of 75 high potential associates towards

becoming next-generational leaders, indicating a high level of training and support in efforts to

recruit and maintain talent.

Communication:

Media

Burberrys entire marketing focus was driven by brand engagement based on an innovative use of digital and traditional media to connect audiences globally with the brand, with a strong

emphasis on targeting specifically the Millennials (born between 1981 and 1996). This was

accomplished through communicating the Burberry story through a variety of both traditional and digital campaigns, expanding on both its heritage and the innovation in both style and design

that made it a leader in the luxury market, again emphasizing the omnichannel strategy.

The Burberry story, as outlined by Bailey in the 2013 Annual Report:

In Burberry we have something truly unique: a company whose story threads through

British history and culture, from the wardrobes of the Royal Family, through the factories

of Yorkshire and mills of Scotland, to some of the worlds great acts of exploration and many of the icons of our popular culture. Deeply rooted in expert craftsmanship and

innovative design, and brought to life both physically and digitally, this story defines

both who we are today and what we can become. In an increasingly competitive

marketplace, and as luxury consumers globally place ever-greater emphasis on

provenance, it gives Burberry that most precious of things: an authentic and clear

identity.

Social Media:

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One of the first companies to both recognize and capitalize on the importance of social media,

Burberry continued to use it as a key element of its marketing, folding it into the signature mix of

digital innovation and aesthetics that has become its trademark. Recent social media endeavors

include:

A kisses campaign partnership with Google, an internet-based platform that enabled users to capture and send virtual kisses. Participants used a touch screen or desktop

camera, used a Burberry Beauty lip color, and then sent the kiss via email.

Partnership with mobile messaging platform WeChat at the Burberry 2014 womens fashion show. WeChat facilitated a personalized experience of the show, and generated

the most social media buzz in brand history, measured across all social platforms.

In 2013, Burberry finished the year with 17 million Facebook followers, making it the most followed luxury brand on Facebook.

In 2011, Burberrys marketing campaign for its Body fragrance sent 250,000 samples out to Facebook friends in return for customer details.

Burberry often used the work of key influencers, such as Emma Watson or musical acts, to help

color in the brand image as well. A 2013 campaign to promote its eyewear, the Spark collection,

featured music-based marketing campaigns by well-known British Bands. And Watson, at the

peak of her film popularity after the release of the final Harry Potter film, became one of the key

faces of the brand. The most recent of these was Romeo Beckham, the son of soccer superstar

David Beckham and Spice Girls diva-turned-fashionista Victoria Beckham (Digital Exhibits).

COMPARISON:

While Burberry effectively entertained and engaged customers on social media, it also was one

of the only luxury retail brands to really capitalize on it. In addition to providing exclusive,

interesting content that helped generate a positive brand identity, Burberrys online presence in terms of followers and total social media reach far outpaced its high fashion peers. Comparing

Burberry to other luxury brands (notably the also omnichannel and tech-savvy Gucci), the social

media numbers are shown in Exhibit 13.

Exhibit 13 Source: Case Author

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With the exception of Louis Vuitton, Burberry beat every other luxury brand in terms of social

media impact, almost always by a substantial amount and in at least two platforms.

Technology:

From streaming runway experiences to interactive digital displays at stores, one of Burberrys key communication strategies was the use of technology. Inherent in almost every store, and

receiving critical and design acclaim for interweaving it into the brick and mortar experience,

Burberry incorporated this technology into creating the ultimate experience for the consumer.

In late 2012, Burberry began using Radio Frequency Identification (RFID) technology in

flagship stores. This allowed them to identify individual product items using radio signals, which

both gave key inventory information and triggered multimedia content for the shoppers.

Burberry also incorporated the use of beacons, a Bluetooth-based technology that interacts with mobile devices. If a customer downloaded the smartphone app, the beacon sensors

communicated with them, pushing items like online promotions, product reminders and

suggestions.

Focused on providing a seamless merging of all Burberry worldsonline, in-store and on the catwalkBurberry also used a wide variety of cameras, screens and speakers to broadcast its fashion shows live in flagship stores, allowing customers to order pieces that had just debuted

immediately (Digital Exhibits).Technology also played a role in associate-customer interactionall sales associates are equipped with an iPadand in customer experience, everything from live band performances to rain falling in the store to RFID-triggered features that included videos about how the product was made, styling suggestions or even personalized information.

Conclusion: What now?

Bailey reached for the lights, but, before turning them out, took a last look before heading out for

the night. Animated and glittering displays, racks upon racks of beautiful garments giving way to

stunning centerpieces and sweeping staircases, he pondered what the next step for all of thisthe Burberry empirewas going to be. An ever growing, increasingly global market meant new opportunities, but also new challenges in both distribution and brand currency. The digital

innovations that had launched the company to the top were now nearly par for the course, with

other luxury brands closing in quickly. How should Burberry position itself to both continue

growth and stay relevant, but also stay true to its roots? Was the solution in more stores,

specifically, more flagship stores? Should he maintain the current digital initiatives, or was

Burberry going to really need to innovate to stay ahead? What was going to be the next

revolution in retail technology? Globally, how did they continue to maintain growth? Was it

going to be enough to do more of the same, or would that condemn them to falling back and

becoming one of the pack?

And how could he, a master of aesthetics, design and innovation, bring that foresight and

creative touch to the running of all aspects of a company?

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Exhibit 15 Source:Bloomberg

Exhibit 16 Source: Statistia

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Exhibit 17 Source: Burberry website

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Exhibit 5 Source: Burberry 2013 Annual Report

Digital Exhibits

Deloitte report on Luxury Markets:

http://www2.deloitte.com/content/dam/Deloitte/ch/Documents/consumer-business/ch-cb-en-

global-powers-of-luxury-goods-2014.pdf

Emma Watson Burberry Campaign: https://www.youtube.com/watch?v=wvZD2RHaqdA

From London with Love starring Romeo Beckham: https://www.youtube.com/watch?v=ojBufhpPgMo

Bailey gives tour of London Flagship store:

https://www.youtube.com/watch?v=CokbQWI_15U

Burberry Introduces Smart Personalisation - The Burberry Prorsum Womenswear A/W13

Collection : https://www.youtube.com/watch?v=gUD_ZPwiAvk&feature=youtu.be

Authentic Branding for a Global Audience: Angela Ahrendts (Future of StoryTelling

2013): https://www.youtube.com/watch?v=krQG2Hceov4

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