Group Case Providing Insight Into Burberry's Rebirth

Cardinal & Co.

Group 5: Gracie Lewis, Brice Barnes, Joshua Cauble, Alvin Cheung, Jillian Godfrey, & Mikaela Smith

MKTG 322.504

In its early years, Burberry was a symbol of luxury and durability. The classic Burberry trench coat became an iconic piece that was commonly worn by celebrities, politicians, and even the British military in World War II. However, by 1990 the brand’s image had become distorted. After a few licensing deals in Asian countries, the brand’s quality, price, and design became inconsistent. It even began selling in retail spaces that did not reflect the quality of the brand. By the mid 1990s, 75% of the brand’s sales came from the Far East. These issues caused the brand to lose its exclusivity. Along with this, Burberry’s product line had become overly reliant on a narrow base of core products, such as outerwear and umbrellas.

At this point the company was facing serious strategic and structural issues; the business was profitable but earning quality was low. The brand was stodgy looking and conservative, skewing towards an older customer base. The company lacked a cohesive vision and the discipline necessary for a luxury goods retailer.

The Burberry brand dramatically changed after Rose Marie Bravo, one of the most well respected executives in the retail and fashion trade, stepped in as CEO. Under Bravo’s strategic plan, the brand successfully developed a broader customer base as Burberry shifted towards a more cross-generational appeal. The brand sought to appeal to both the young 25-year-old who is dressing to impress on his first day of the job, as well as the 60-year-old investment banker seeking a modern, classic look. This shifted Burberry’s image to sporty, functional and protective, which peaked the interest of the younger segment.

There were five main actions that Bravo took to reestablish this brand. 1) Bravo started her revamp of Burberry by recruiting executives with success in the market. She hired individuals with different backgrounds that ranged from A-list industry talents to fitting room workers. The purpose was to create a room of people who knew what it took to outperform in a retail environment. She wanted a board that was able to tell what the customers wanted and how to give it to them at a price they were willing to pay. Some of the first changes were creating a contemporary logo and packaging, and a JND of shortening the name from Burberry’s to Burberry.

2) Bravo implemented a reposition of the brand. Her reasoning was to attract younger customers while holding onto their core, older customer base. Burberry was effective in this because they conducted market research to find gaps in the industry that they could enter. Bravo and her team knew they did not want Burberry to be too cutting-edge or too classical, so they entered the market right in the middle, while also keeping their price points and bracketing in line. Burberry’s point of difference was that they were aspirational, yet functional.

3) Next, they updated the product line by first reducing the SKUs by over 75%. This allowed their products to have an overall consistent and modern look. They created two categories of products, continuity and fashion-oriented. Continuity was for items like the trench coat that were expected to be timeless pieces. The fashion-oriented category was made to shift with the current trends. Unsurprisingly, this allowed Burberry to target both ends of their customer base. Burberry also zoned in on the three primary collections: womenswear, menswear, and accessories. They also took hold of many old licensing agreements to ensure consistency of price, quality, and design across all markets. This enabled Burberry to increase overall prices to portray its new ‘accessible luxury’ positioning.

4) Burberry’s brand portfolio was then expanded. They offered a few different varieties for the different target markets to form a House of Brands. On the lower end, they had Thomas Burberry, Burberry Blue and Black available only in select countries like Spain, Portugal, and Japan. These were mainly for the younger customer base that was not willing to spend as much as the consumers that purchased from the Prorsum label. This was a high-end extension for Burberry that only the most affluent segment could afford. The line was created with the intention of hitting the luxury markets with force; it was not a line for just anyone, hence its very limited availability.

5) Lastly, Burberry hired a team led by Mario Testino to create a new advertising campaign that emphasized the new trendy, modern designs while holding onto the aristocratic, English heritage of the brand. These ads were able to do just that by featuring two models, one for each look. They had Kate Moss pose as the head-turning, risqué division to target the younger consumers and Stella Tenant portray the old-fashioned, yet luxurious designs that attracted the older, wealthier consumers. Burberry was able to grab the attention of consumers’ by incorporating sex appeal and developing a pleaseant, surprising message. These peripheral cues ultimately allowed them to change the attitudes that consumers had towards the brand.

Our group has two suggestions for product categories that Burberry should venture into. Other luxury brands that are similar to Burberry, such as Louis Vuitton and Supreme, have had great success collaborating with shoe brands like YEEZY, Nike, and Adidas in the past. One example of a successful collaborative shoe relationship is Nike and Supreme. The two companies have a history of collaboration that dates back to 2002, with the first collaboration being the Nike Dunk Low Pro SB Supreme. Both companies benefited from the brand exposure this collaboration brought, as they were the most sought after shoes in 2002. The usual consumers of Nike who might not have been aware of Supreme, a high-end streetwear brand, were exposed to the brand with the co-creation of this shoe. The collaboration also increased the amount of brand trust that Nike consumers have for Supreme, a company older consumers of Nike might have been skeptical of at first. The introduction of social media has done nothing but increase brand awareness of luxury and streetwear brands. Shoe resellers and consumers follow forums, websites, and social media accounts such as sneakernews and Sole Collector for the latest news on rare shoe releases. An extremely limited supply of sneaker collaborations are released, which increases their rarity, resale value, and overall hype amongst the sneakerhead community.

In addition to this shoe collaboration, we suggest that Burberry also enter into the affluent streetwear apparel category. Streetwear is a thriving category that delivers contemporary, active, fresh, and experimental aspects to fashion that are attractive amongst younger, trend-seeking individuals. Brands such as Supreme, Adidas Original, Stüssy, Thrasher, and BAPE have all successfully managed to bring prestige and status value to their brands, which is reflected in their prices. We intend for the Burberry streetwear line to be positioned parallel to the Supreme brand in terms of pricing, perceived value, and trend-pioneering. We want Burberry to be the brand that incorporates luxury into streetwear; this is what will give us a competitive edge over our competitors like Adidas Original and Supreme, who mainly focus on the contemporary and functional angles but have yet to expand on the luxurious aspects of their apparel. We believe this willcreate a social-identity based attitude amongst the consumers that express themselves through contemporary streetwear trends as well as through luxury, extravagance, and the perceived status that comes with it. With the release of both the shoe collaboration and affluent streetwear apparel, Burberry will enjoy the benefits of widening their customer base and have greater brand exposure to the younger generation. The brand will also experience an increase in social media and internet exposure through Instagram accounts, advertisements, websites, and forums.

Although it has become a rather salient retrieval cue, we think that it would be best for Burberry to start becoming more reserved with their iconic check. The most restraint should be applied to the men’s clothing line by only including the check in very minimal ways. They could put it on the lining of jackets, under collars, inside pockets, or even just on the tags inside the garment. There are even some items that would be best not to have the check at all, like dress shirts and dress pants. We think it would be best to use moderate restraint for women’s clothing and continue to feature the check in certain items, like mini-skirts. The least restraint should be applied to items in Burberry’s accessory line. We made this decision because the case stated that Burberry still has a substantial amount of one-time purchasers that want to be able to show that something they own is from Burberry. This line of items would be perfect, as they are smaller and on average less-expensive than items in the other product lines.

We believe that the popularity among non-target consumers should not pose much of a risk to Burberry, as they have already done so much to establish their brand image and reputation. However, we believe that a more conservative approach to using the check will minimize the amount of counterfeits on the market by making them obvious, in comparison to an authentic Burberry item. .