Burberry CEO - digital future as important as high-end stores

Profile picture for user slauchlan By Stuart Lauchlan November 12, 2015
Summary:
As Burberry heads into its 160th year in business, CEO Christopher Bailey is big on the firm's digital investment and prospects.

Christopher Bailey
Christopher Bailey

Next year sees the 160th birthday of one of the UK’s most iconic retail brands, Burberry.

With its high-profile Christmas advert currently running on loop on TV screens, the firm is an upmarket high street heritage brand, but one that has an increasing focus on tech and digital investment. CEO Christopher Bailey explains:

Our confidence begins with our brand. In this next phase, we believe what brands stand for and their ability to stand out from the crowd with a unique point of view will become more and more important. We have tremendous advantages here.

Burberry has seen many changes over its long lifetime, and today we believe the brand has never been stronger. It has a clear and distinctive identity, grounded in our iconic products, the trench coat and the cashmere scarf, and their made-in-UK provenance.

But it's important to look ahead as well as back, he adds:

While protecting and celebrating our history is a critical part of our brand identity, ensuring its contemporary relevance is every bit as important. This blend of British heritage and creativity and innovation is a big part of what makes Burberry distinctive in the sector, from the design of our products to our digital mindset and broad appeal.

There are numerous examples of this philosophy in practice at Burberry, including:

  • As part of the Spring/Summer 2016 womenswear show, the firm partnered with Snapchat to preview the collection the evening before to the platform’s 100 million users, with content viewed over 200 million times.
  • Burberry partnered with LINE, the largest messaging app in Japan, to lives tream the show and to celebrate the launch of Burberry Beauty, offering their users the opportunity to purchase a selection of exclusive beauty products directly on the new LINE Pay platform.
  • The firm opened an account on Kakao, the largest messaging app in Korea, to share
    brand content with their users.
  • Burberry now has about 38 million followers across its social media platforms globally, up over 30% on last year, including 5 million followers on Instagram and Twitter and 17 million on Facebook.
  • It was also the first brand to join Apple Music, curating a channel based on the music played during its runway shows.
  • The firm says that burberry.com remains the heart of the company’s digital strategy and this platform is complemented by third party offerings, including Amazon Prime. in total, Burberry now has ‘brand rooms’ on 15 fashion and beauty retail and wholesale digital platforms.
  • Enhancements to mobile functionality has seen a tripling of penetration of mobile sales year-on-year. Some 45% of all Burberry traffic is coming through mobile.

Christmas at Burberry 

From a tech perspective, Burberry reckons it can now capture data from around 85% of transactions and has over ten million customers in its database. This data is then used in Burberry’s Customer Value Management (CVM) programme, which is now live in 380 stores globally to enable more targeted, relevant and personalised contact with the firm’s most important customers in order to drive increased conversion and spend.

Behind the scenes, the company is upgrading its core IT systems and migrating its physical data center to SAP cloud services, before transferring applications onto HANA. Burberry is looking to this to deliver real time, faster in-database processing, enabling better, more responsive decision-making throughout the business.

Digital developments

Bailey says the goal now is to bed down on the investments made in digital to date as the landscape becomes more competitive:

As the sector becomes increasingly digitally engaged, the landscape is more crowded than ever. But we have some of the best talent in the industry and an infrastructure built to support the full end to end customer journey. Recent examples of this include our new mobile site and improved tablet platform, and upcoming changes that will significantly upgrade the performance of burberry.com in China and Japan, with much, much more to come.

But perhaps our greatest differentiator is the digital mindset that runs through every part of our business, always linking the physical with the digital worlds. We will continue to use this to our advantage in the months and the years ahead.

We’ve got an incredibly clear strategy on our digital goals. We’ve got a very strong end-to-end consumer experience and we continue to invest in our digital infrastructure.

While many would identify the Burberry experience with its luxury high-end stores, Bailey argues that digital enablement is just as relevant:

In terms of the luxury sector changing, we feel that it’s going certainly towards a more digitally orientated customer experience. That doesn’t mean that bricks-and-mortar stores are not important, they are. The lines between those two though are becoming more and more blurred and our customers are using mobile much more and using their mobile within bricks-and-mortar stores.

Digital is also blurring the lines geographically and enabling Burberry to respond with greater agility to market opportunities:

We see tremendous opportunity in Japan, which is a very digitally-led country, as well as the US. The US is our smallest country by mix, and again, it’s our number one digital company. So I can’t overestimate how important digital is for Burberry.

Our customers are much less interested today and going forward in whether they shop on their social media platforms, whether it’s on a Burberry-owned platform, what country they’re in, currency, everything is becoming much more transparent globally.

We know that those changes are happening. And we have got a culture within the organization that is very aware of those changes.

My take

Heritage brand meets digital enablement - money well spent.