That’s the mission statement articulated by CEO Christopher Bailey as he talks about the firm’s ambition to build an omni-channel future for the company:
Through a sharp strategic focus and prioritization of investment early on, we have established a leading position in digital in our industry.
Part of our strength here is the digital skills and mindset that we've now embedded within our company. With over 40 million followers on social media globally today, we have got a competitive advantage in terms of reach, awareness and engagement.
Looking ahead, we plan to deploy this capability more assertively to supercharge e-commerce. We aim to lead the sector in increasing digital customer acquisition and retention, in driving e-commerce sales on our own platform and through our strong third party relationships, in creating omni-channel customer journeys, and in how we use digital technology to engage and service our customers in store.
In financial terms, that translates into an expectation that e-commerce strategy will drive a third of revenue growth over the coming three years. That’s only going to be possible if the firm can achieve its stated objective of creating more personalized customer experiences, online and offline. And at the heart of that is an unashamed embrace of luxury, says Bailey:
Luxury remains a £200 billion market globally and it will continue to grow, albeit at a slower rate, at least for the near term. And our plan is to capture a disproportionate share of that growth just as we have done in the past.
We expect a number of emerging customer trends to accelerate with people wanting more distinct experiences, more newness and innovation, greater authenticity and a more personal relationship with the brands that they love.
Today, the luxury consumer wants a less transactional relationship than in the past. So we are creating an elevated and much more personalized service and of course that's also key to improving customer loyalty, which we're lagging and we have an opportunity to make real gains.
On the front line of the digital strategy is Chief Operating Office John Smith, who argues:
Digital is a point of differentiation for Burberry. It's an embedded part of our DNA, of our culture. For many years we've been early adopters in digital, investing throughout the business along all points of the customer journey.
Some examples are innovation in social media to extend the reach of our brand, most recently with Snapchat, and today we're present on 20 different social platforms with over 40 million followers globally.
The next stage of our digital journey is to extend this digital prowess into true e-commerce leadership. E-commerce in the luxury sector is expected over the next few years, to continue to grow by a double-digit percentage each year and to be the fastest-growing segment of the market.
Smith breaks Burberry’s digital strategy distinct elements, including traffic initiatives to drive customer acquisition and retention and a move to what he calls:
true omni-channel leadership rather than seeing the customer journey as separate on digital and in retail, and the next stage of using digital technology in-store, for example a new digital selling tool for sales associates.
Mobile is critical here. Since 2014, traffic from mobile devices has seen the fastest growth and represented about half of all traffic to the Burberry website in 2015. Mobile conversion rates are up 40% year-on-year and for the second half of 2015 delivered the majority of growth for burberry.com, while desktop conversion rates were up 25%.
Coming up next will be the launch of a new customer app to facilitate faster and simpler mobile checkout and a complete redesign and re-launch of burberry.com in the autumn.
There’s also a drive to improve digital sales penetration by country. Today, burberry.com has a wide coverage, transactional in 44 countries and 11 different languages, but the company is aware that the level of sales penetration varies significantly by geography and by language. Smith explains:
We do best in the English-speaking world. Conversely the opportunity is greatest in Asia. We intend to focus on improved performance and penetration through a series of localization initiatives, whether by responding to different customer behaviors, habits or preferences in these countries, or by improving the actual performance of the site itself.
For example, our in-house team of analytic experts who optimize search-engine performance but also browser performance, discovered that burberry.com pages loaded much slower in China, given the rich media content that comes with it. So we reconfigured the site and the network architecture in China so that it now loads four times faster on both desktop and mobile and we're seeing the benefits starting to come through.
This is important as Burberry estimates that if Asian penetration can reach the levels of the English speaking world, that would deliver over £100 million of new e-commerce revenue.
There’s also a drive to pull together online and offline into an omni-channel whole. Smith says:
We've been blurring physical and digital for some time, for example bringing iPads into store and rolling out collect in store. These two initiatives now account for about 25% and 20% of our digital sales respectively
This year we introduced Store Stock Lookup, so customers can check which store has stock if they prefer to purchase in-store to avoid a wasted journey. And we expanded stock availability for online customers by extending the single pool of inventory model, which we tested in China last year, into the US and into EMEIA and now live in 75 stores.
There are new omni-channel initiatives in test mode, such as a reserve-in-store option for airports. This is in test mode in Heathrow, allowing customers to identify and reserve an item on burberry.com ahead of actually traveling, while actually making the purchase in the airport terminal as they make their journey.
So far all these omni-channel initiatives just relate to burberry.com, but Smith sees a future where customers can work on and offline with the retailer directly, but also with other online retailers who also sell Burberry product.
All of this is taking place against a backdrop where the retail sector as a whole is under pressure. Bailey concedes that Burberry’s plans are ambitious, but necessary:
We are mindful that we are embarking on this plan at a time when our industry is facing significant challenges, especially in respect of near term trading. However, that does not change our future ambition. We acknowledge that our plans to unlock growth through greater product focus, productive space and e-commerce leadership are stretching, but we also feel that they're achievable.
We know that one of the biggest unlocks is to be clear about what needs to be different in our ways of working and how we strengthen our capabilities to take advantage of the opportunities that we've identified. We are absolutely committed to Burberry being a growth company and we believe we can outperform the luxury market over the coming years.
Is the idea of moving from digital prowess to e-commerce leadership essentially an acknowledgement that Burberry hasn’t seen enough ROI from its digital investment to date? Maybe. But Bailey and Smith’s ambitions are bold in their own right. Burberry is one of the world’s most recognisable high-end brands. It deserves some ambitious thinking.