Case study: Burberry

Within luxury branding, customers' perceptions drive everything, and brands can be taken off the most-desired lists if they do not conform to the up-market image. The business is built on brand names that instill luxury and confidence that they are part of the elite and customers will pay for that brand experience. Burberry fell from the luxury brand category when the brand became associated with values of a lower-class grouping called 'Chavs'. The turnaround since that time has been amazing, with the Duchess of Cambridge now among the many A-listers and royalty that embraces this brand. How did Burberry reinvent the brand and rank eighth in the top luxury global brands of 2018 with a brand value of $5.7 billion? This ranking is courtesy of the market research by Kantard Millward Brown, using the BrandZ model to take into account a brand's earnings, its potential future earnings and the quality of the brand in the mind of the consumer, to arrive at a final 'brand value'. Burberry is a tale of reinvention of a brand that was declining in 2006 when American Angela Ahrendts became CEO. She began a transformation of what was a suffering and stuffy brand that made raincoats for Britain's upper classes, but which was worn at football matches and in pubs across the UK. In May 2014, she left to join Apple and the company continued to develop her vision under the design leadership of Christopher Bailey, who in turn was succeeded by Marco Gobbetti in 2017 with a brief to continue the transformation, and revenues grew to 2.7 billion in 2018. According to Gobbetti, the first steps implemented to re-energize the brand are showing promising early signs. Ahrendts' original vision was to transform the company through a new brand vision, digital leadership and by inspiring employees. Gobbetti has added the goal of seeing that the company is highly cash generative. Brand vison: A brand vision offers a clear and consistent message about the value of the brand. A historical lack of brand vision had left Burberry vulnerable and struggling in its market. Ahrendts aligned the company around the iconic trench coat that made Burberry famous. What she created was a closely connected creative thinking culture encouraging cross-functional collaboration, intuition, and a meritocratic ethos, united by a brand vision - Protect, Explore, and Inspire. It took factory closures, it took layoffs, there was a leadership shake-up and a re-invention of the brand to give Burberry a top 10 luxury brand ranking. Digital leadership: The company also prides itself on digital first and exploiting what it calls the digital tsunami - so, though known globally for its luxury retail experience, it went digital. The company has fully embraced and invested in digital, both online and offline, a point of differentiation from many of its competitors. It also created a top-range website with a click-to-chat function. Instore iPads allowing customers to shop online in stores now comprise almost one-third of its online business. Sales associates are armed with bid data featuring information on consumer shopping behavior, what shops they visit, what they typically place in their shopping basket and what they and other Burberry customers have recorded in social media. Involving everyone: A key strategic aim of Burberry is, by continually developing, inspiring, and motivating its global employees through its engagement programs, to foster a dynamic and inclusive culture. The company's 'Inspired People' program engages employees, empowers their leaders and strengthens capabilities and team working to achieve positive and sustainable change across every part of the company's operations.

Questions

1. Study the company's 2017/18 Annual Report and assess how Burberry is energizing its brand, with reference to appropriate material in Chapter 14 and the article by Zoe Wood and Julia Kollewe (2017) Burberry to reinvent itself as a super luxury British brand, The Guardian, 9 November, https://www.theguardian.com/business/2017/nov/09/burberry-to-reinvent-itself-asa-super-luxury-british-brand.
2. How are Big Data and AI driving success in the fashion world? See Bernard Marr & Co case study on https://www.bernardmarr.com/default.asp?contentID=1282.
3. The designer Christopher Bailey transformed the tone of the brand (see articles by Jess CartnerMorley, Christopher Bailey (2017) How Burberry's creative force transformed the brand, The Guardian, 31 October, https://www.theguardian.com/business/2017/oct/31/christopher-baileyburberry-transformed-fashion-brand; and (2018) Christopher Bailey bows out from Burberry under a bold rainbow, The Guardian, 18 February, https://www.theguardian.com/fashion/2018/feb/18/christopher-bailey-bows-outfrom-burberry-under-a-bold-rainbow). How might Burberry continue to build a breakaway brand?
4. How would you advise Burberry to set its pricing policy and how should it respond to competitive price pressure?
5. What other social media activities are possible and advisable? Do you think Tok-tok is appropriate?
6. Can the 'Inspired People' program lead to more excitement and engagement?
7. Are the H2H marketing principles applicable here? Please exemplify.