Burberry is British lux to a tee – a trench coat (for those rainy days), a muted tartan (perfect for your country weekend) and impeccable tailoring.
But a decade ago, the luxury brand established 150 years ago in Basingstoke had lost direction, with the iconic tartan being brand-jacked and renamed ‘chav check’.
The company’s future looked bleak, but with the appointments of Angela Ahrendts as CEO and Christopher Bailey as Chief Creative Officer in 2006, the share price tripled as did the sales revenue from £1b to £3b.
How did Ahrendts and Bailey stop the rot?
The brand needed to be authentic, honouring its thoroughly British roots such as when Sir Ernest Shackleton wore Burberry during his famed Antarctic expedition or British soldiers in WWI.
Ahrendts and Bailey focused on innovating the product whilst being true to its heritage. They bought back the licensing deals that were diluting their brand, putting an end to poor quality clothing that had taken Burberry from luxury to ubiquitous, and often ridiculous (remember the dog jackets?).
Bailey backed this up by taking control of their product. Gone were the local teams designing for the local markets. Factories in Hong Kong, New Jersey and Wales were shut down. Bailey, the brand czar, created a consistent look throughout the range, with every design being approved by him prior to being distributed globally.
The team focussed on their core product, the trench coat, and bought it into the now by launching a customisable version. Customers could share their designs via microsite ‘Art of the Trench’, creating buzz and leveraging a bottom-up approach to product development.
‘Art of the Trench’ microsite, with carefully curated images of customers wearing the product
Price variations across the globe were abolished, and harmonised at levels that reflected the premium brand.
The placement of the product was revamped, with luxurious uniformly designed retail stores opening in key locations. Ditching the licensing also resulted in better control of the placement of their product. By ensuring manufacturing was limited to the Yorkshire weaving factory and the Castleford trench coat factory, (where coats had been made for British soldiers), authenticity of the brand was maintained.
Ahrendts promoted the now coherent brand through a forward-thinking digital strategy that included a beautifully designed website with globally consistent appearance and product offerings and a fully integrated marketing campaign across Facebook, Tumblr, Pinterest, Instagram, Twitter, Google+ and YouTube. This was further complemented by a 24/7 customer service site on Twitter. This strategy was aimed at reaching their target market of ‘millennials’, younger customers often overlooked by luxury brands.
Their strategy of focusing on their core product, embedding authenticity into the brand, and aligning the marketing mix to signal to customers that Burberry is a luxury British brand, worked. With celebrity endorsement from royalty and movie stars, the champagne corks must have been flying at Burberry HQ (but not Möet please, which is from rival firm LVMH)!
The Duchess of Cambridge wearing a Burberry trench coat in typical British weather
But Burberry will need to be careful. Strategy that is championed by a few select individuals can come undone as they move on: when Ahrendts announced she was moving to Apple in 2013, the share price tumbled and revenues plateaued, with only £2.5b in revenues reported last year. Christopher Bailey is now stretched as both ‘brand czar’ and CEO and sales are declining, particularly in Asia.
Burberry will need to ensure that when expanding the breadth and depth of their product offering that they keep to Ahrendts’s strategy of brand authenticity, and not fall prey to chasing high volume sales from cheaper, less prestigious products that overextend the Burberry brand. Nobody needs to see ‘chav check’ again.