Burberry Market Research Report

HISTORY

HISTORY

1891:

Burberry opens its first store on Haymarket, London.

1856:

Burberry is founded in Basingstoke by draper Thomas Burberry. His original focus was outdoor-ready attire, stuff that was favoured by Lord Kitchener and Lord Baden Powell.

1911:

The company becomes the outfitters for Roald Amundsen, the first man to reach the South Pole.

1920s:

1965:

One in five coats exported from britain is a burberry product.

The Burberry check, now registered as a trademark, is introduced as a lining to our rainwear.

1879:

Thomas Burberry invents gabardine – the breathable, weatherproof and hardwearing fabric revolutionising rainwear – which up until then had typically been heavy and uncomfortable to wear. Gabardine was then patented in 1888.

1901:

The Burberry Equestrian Knight logo is developed containing the Latin word “prorsum”, meaning forwards.

1914-18:

1955:

HM Queen Elizabeth II grants burberry a royal warrant as a weatherproofer.

1972:

The Burberry trench coat is invented during the First World War. The functional design includes epaulettes used to suspend military equipment such as gloves and whistles, D-rings used to carry grenades, the gun flap to provide additional protection when in action and the storm shield to allow water to run off it smoothly.

Burberry formally acquires the factory in Castleford, the home of the Burberry trench coat, building on our manufacturing presence in the UK – a legacy that continues today.

HISTORY

2018:

2000:

Burberry opens its first store on Bond Street.

1990:

Burberry is granted a royal warrant by hrh the Prince of Wales as an outfitter.

2002:

Burberry becomes a public quoted company floating on the London stock exchange.

2010:

Burberry celebrates diversity and inclusivity with the rainbow vintage check throughout its February collection. Burberry joins the Ellen Macarthur foundation ‘make fashion circular’ initiative, to help develop solutions to some of the biggest environmental issues faced by the fashion industry.

Burberry is the first brand to livestream a fashion show. Burberry is the first luxury brand to join the ethical trading initiative.

2001:

Christopher Bailey is appointed design director.

1999:

Burberry’s becomes Burberry and a new logo is designed by art director Fabien Baron.

2016:

Burberry is the first brand to make runway collections available to consumers for purchase immediately after the show.

2009: The Spring/Summer 2010 womenswear show relocates to London from Milan, marking the 25th anniversary of London fashion week.

Riccardo Tisci appointed as Chief Creative Officer.

BRAND IDENTITY

PERSONALITY:

PHYSIQUE:

-High quality

-Garbadine

-Beige

-Check pattern

-Iconic trench coat

-Practicality

Gabardine, invented by Thomas Burberry, started to be used for military purpose: the khaki colour and lightweight fabric proved essential for soldiers in the trenches- ‘trench coat’.

In the 1920’s, the iconic Burberry check print in red and beige, now registered as a trademark, was introduced as a lining to the trench coat.

Burberry is committed to creating products using only the highest quality materials and multiple communities from across the world are involved in bringing these to their customers.

RELATIONSHIP:

-Personalised:

Big Data and Artifical Intelligence allow the delivery of a tailored shopping experience. Data is collected through loyalty and reward programs and is used to offer personalised recommendations, online and in store.

Store associates use iPad apps to offer buying suggestions based on customers’ purchase history, preferences as well as their social media activity.

-Classic -Timeless

-Sophisticated

-Prestigious

RELATIONSHIP:

-Digital:

The Burberry World website uses audiovisual content to engage, entertain and interact with the consumer. The online luxury shopping experience is granted by a personalised customer service application that allows customers to call and chat with sales staff in real time.

“Walking through the doors is just like walking into our website.”

Burberry’s flagship store in Regent Street, London is a digitally-advanced brand experience. RFID tags embedded in products communicate with shoppers’ mobiles and mirrors are able to turn into screens and provide audio-visual contents: catwalk footage, or details of how a product was made.

In order to reach a wider global audience, Burberry adopts livestream technology to broadcast runway shows, allowing consumers to share the full experience of a Burberry fashion show.

BRAND IDENTITY

SELF IMAGE:

-Exclusive

-Successful

-Elite

-Smart

CULTURE:

-Authentic British Heritage:

Burberry’s trench coat has been work by many explorers and aviators. During the First World War, Burberry provided apparel and equipment to the Armed Forces.

In 1964, Burberry was the official outerwear supplier for the British women’s Olympic team who participated in the Tokyo Olympics.

Burberry is granted Royal Warrants as Tailors, Weatherproofers and Outfitter.

CULTURE:

-Pionerring spirit: With the invention of garbadine by Thomas Burberry over 130 years ago, Burberry has a pionerring and adventurous past.

Today, it continues to surprise by being the first luxury brand to launch a social media platform, to stream a 3d fashion show, to create a ‘digital’ store and much more.

REFLECTION:

-High social status

-Elegant

-Classy

CULTURE:

-Responsibility:

First luxury brand to join the Ethical Trading Initiative, an alliance of companies that promotes respect for workers’ rights around the globe.

Burberry are commited to promoting the conservation of biodiversity, environmental preservation, ensuring animal welfare and protecting people and communities. Their target by 2020 is to eliminate the use of damaging chemicals, use 100% renewable energy; cut water use by nearly 20% and ban per- and polyfluorinated compounds.

Sourcing of all products and raw materials from suppliers that are governed by the highest animal welfare and environmental standards.

Burberry donates 1% of Group adjusted profit before tax to charitable causes and has donated more than £22 million, since 2010: for example, they support emerging creative talent through the Burberry Design Scholarship at the Royal College of Art in London and sponsors an apprenticeship program at the British Fashion Council.

SWOT ANALYSIS S W

TRENGTHS

-Known for their iconic British fashion brand, they ensure that it’s users buy quality, durable products.

-They maintain luxury status by not making use of mass media advertising such as television, instead using fashion websites such as Vogue and Elle to reach their consumers and celebrities.

-Burberry has approximately 500 stores across 50 countries, ensuring a wide reach of product.

-They have a wide Chinese market which has had a positive influence on the company’s revenue due to increased sales.

-They have high community engagement through social media. The brand holds two royal warrants which lead to increased consumer belief in the brand.

EAKNESSES

-Luxury price point limits them in terms of consumer.

-Limited themselves by only having a few product lines (clothing, beauty, accessories) in comparison to competing companies that have branched out into different sectors such as home decor.

-High staff turnover, which limits the efficiency of the company because of increased costs and time wastage.

OPPORTUNITIES

-Changing lifestyles- increased demand for luxury goods because 1) consumers want to appear ‘classy’ and feel buying into luxury will help them to be perceived this way.

2) Sustainability is increasingly important to consumers, particularly the Millenial and Gen Z’s that Burberry want to target. They may feel like luxury staple products such as a Burberry trench are a more sustainable choice over high street fashion.

-Opportunity to diversify products in order to stand out from competitors.

THREATS

-Competition from opponent brands amongst the global market. -Burberry products may have a short cycle in the market due to changing lifestyles and preferences.

-Counterfeit products tarnish brand image and make customers doubt the legitimacy of products.

-Politics and economic stability can have a negative impact on Burberry, particularly because they are a global brand.

PESTEL P OLTICAL

IMPACT OF NO DEAL BREXIT:

Burberry has said a no-deal Brexit could lead to tens of millions of pounds a year in extra costs for its business. The tariff costs of Britain trading under World Trade Organization rules in the event of a no-deal Brexit would hit the company’s earnings before interest and tax by “the low tens of millions” of pounds a year. there would also be disruption to Burberry’s design process and to its manufacturing in the UK, which is concentrated in Yorkshire. The biggest concern is the disruption to the supply chain. Burberry imports and exports significant volumes of raw materials, samples and finished goods between the UK and the EU, and it is the logistical delays that would impact design, product development and customer fulfilment. At the moment Burberry could send orders to stores in Europe within a day or two, a situation that would change if there are border checks. To mitigate a situation where European luxury goods rivals could get their collections to EU customers quicker than Burberry, they would have to run with higher inventory levels. The effect of this would be additional inbuilt inefficiencies that would certainly affect the balance sheet and the cash conversion.

E CONOMIC

BURBERRY SALES EXCEED EXPECTATIONS:

A well-received collection by chief designer Riccardo Tisci and brisk business in China propelled Burberry to better than expected sales growth in the first quarter of 2019. Revenues rose by 4 per cent in the three months to June 29, compared with the same period last year. This was double the growth analysts had expected. Shares in the company rose by 10 per cent in early London trading. Mr Tisci’s collections, which account for around half of the stock on sale in Burberry’s main stores, had generated an excellent consumer response. Burberry’s Asia Pacific sales also grew by “a high single-digit percentage,” the group said, driven by “mid-teens” growth in mainland China.

PESTEL S OCIAL

ETHICAL TRADE:

It’s recommended by ethical trade experts that Burberry continues to build on its human rights commitments and report progress in achieving positive impact on well-being and livelihoods, as well as the steps it has taken to address areas of negative impact. The company’s latest Modern Slavery Statement provided some detail on audit findings and actions taken to remedy specific issues, such as recruitment fees paid and documents withheld. To achieve further progress in this area, they would like to see greater disclosure of both negative impacts and positive social impacts, so that outcomes for people can be assessed referencing the systemic problems in garment supply chains, including in-work poverty and gender inequality. This also includes highlighting what the company’s belief that ‘all workers have the right to a living wage’ means in practice.

T ECHNOLOGICAL

BURBERRY GAME LAUNCH:

Burberry launched its first online game in October 2019, marking the brand’s debut into the ever-growing gaming market. The game - made available to play online and via a big screen in the brand’s Regent Street store -was a tool used to promote the label’s new puffer jacket collection. Players were able to choose which version of the style to dress the deer character up in, and there are a series of prizes to be won, including custom GIFs and, of course, the Burberry puffer. Burberry has played with the idea of interactive content before, more specifically with its monogramming service in May whereby the label invited consumers to engage with TikTok challenges. The brand conducted research which revealed that there was a huge appetite for gaming among its younger consumers, particularly in the Chinese market.

NVIRONMENTAL

GLOBAL ENVIRONMENTAL POLICY:

Burberry are committed to respecting the environment, minimising the environmental impacts of operations and activities in supply chain. To reduce the climate change impacts of our operations, including in offices, stores, manufacturing and distribution sites, they have set a goal to become carbon neutral by 2022, by improving energy efficiency, reducing consumption and switching to renewable sources, before offsetting any remaining emissions. A further goal is to create innovative solutions to the endemic waste challenge facing the industry, by revaluing waste and igniting a makers’ movement.

They work closely with partners to improve chemical management, reduce energy and water consumption and increase the use of renewable energy wherever possible. For example, water is required for the cultivating and processing our raw materials and for washing and dyeing, accounting for a substantial proportion of our total water footprint. The communities in and around our value chain also rely on water for their daily lives. They are addressing this challenge as a commitment to eliminate by 2020 the use of chemicals that may have a negative environmental impact and by reducing water usage throughout the value chain.

PESTEL

LEGAL

PROTESTS IN HONG KONG:

Burberry fell out of fashion yesterday after retail sales in Hong Kong suffered their biggest fall in history in October as the antigovernment protests wreaked havoc with retailers’ top lines. Clashes between the government and protesters have brought the city to a standstill at times in recent months, forcing stores to close and hotels and restaurants to sit empty. Two people have died in the protests and hundreds more have been injured, while the number of arrests is thought to be about 5,000.

FASHION FOCUS: SUSTAINABILITY

Interest in sustainability is rising on a global basis and consumers are more aware than ever before of the negative impact clothing consumption has on the planet. There has been pressure on designer brands to become more ethical, with London Fashion Week the first major fashion show to go fur-free in 2018. More luxury brands including Gucci, Michael Kors and Versace have replaced fur with alternatives in the last year.

Sustainability has also become a big talking point in fashion and we are increasingly seeing luxury brands looking to promote their eco-credentials. Burberry has been trialling new raw materials made from regenerated fishing nets, fabric scraps and industrial plastic in its outerwear and bags. Italian label Max Mara has used recycled fabric and offcuts and transformed them into ultra-fine fibres, combining them with recycled polyester to generate an insulating material to be used as padding for its coats. In July 2019 LVMH purchased a minority stake in sustainable luxury brand Stella McCartney and this tie-up reflects how luxury groups are trying to demonstrate a commitment to sustainability and ethics.

Designer brands are in a good position to encourage people to invest in fewer quality pieces and thereby do their bit for the environment.

76% ½

of Millennials aged 20-39 agreed that the price of designer fashion means that it should be more ethical than high street fashion.

43%

of fashion consumers in the UK have bought second-hand items in the last year.

of all clothing shoppers said they would be interested in knowing how to make their clothing last longer.

57%

of UK consumers think that buying too many fashion items is bad for the environment.

35% of fashion consumers have sold unwanted items.

½

of 16-24 and 2544 year old fashion shoppers say that they have rented or would be interested in renting fashion items.

of consumers would be more likely to buy from a designer brand that offers free repairs of its fashion items

The percentage of 25-34s that have resold luxury items no longer wanted rises to 15%.

57% are trying to make more ethical fashion purchases now than they did 12 months ago.

CURRENT LANDSCAPE: LUXURY FASHION

26%

of Chinese consumers have boycotted a luxury brand after reading negative press.

68%

of shoppers agree that there should be more designer fashion items available in plus sizes.

Affluent ABs and the highest earners are most likely to agree that you get a better experience when buying designer fashion items in-store than online. Seven in 10 shoppers with a household income of £50,000 or over agree with this.

23% of young women aged 16-24 have purchased designer occasionwear in the last three years.

65%

of men favour the instore experience vs

59% of female shoppers

Consumers may voice green or ethical sentiments, but they are often too lazy, too cash-strapped or too short of time to turn belief into action. As a result they are looking to manufacturers, retailers and brands to do the good

Young men have adopted particularly savvy shopping habits. They have a particularly strong appetite for discounted and off-season goods, which is likely driven by the fact that menswear trends are slower and change less frequently than womenswear trends, meaning that products often have more longevity and seasonal changes are less dramatic.

COMPETITORS MATRIX

HIGH PRICE

LOW PRICE

CONSUMER PROFILING

HENRY’s: (High-Earners-Not-Rich-Yet)

HENRYs are aged on average 43, with an income of more than US$100,000 and investable assets of less than US$1 million.2 HENRYs are digital savvy, love online shopping and are big spenders, in particular the Millennial HENRYs.

With HENRYs likely to become some of the wealthiest members of society, the potential benefits of onboarding this demographic to luxury brands’ product and service portfolio are twofold: securing valuable present customers and building client relationships and business with those most likely to be amongst the most affluent consumers in future.

HENRYs are heavily influenced by modern technology and use of social media to form their buying decisions.

Millenials and Gen Z’s: The Customers of The Future

These ‘new’ tech savvy generations look for individualized, seamless brand relationship, brands are investing worldwide to market digitally, increasingly using social media to engage with these consumers.

Companies are also re-examining the value of brand heritage and brand history for their customers.

They rely more and more on digital technologies, such as Artificial Intelligence (AI) and Big Data, which are helping them in redesigning customer engagement techniques through data analytics.

They are facing customers’ increasing sensitivity towards privacy but are trying to convert it into an opportunity to offer more personalized products and services to their customer base.

FOCUS POINTS FOR BURBERRY

-INCLUSIVE, INDIVIDUALISED, SELF-EXPRESSIVE PRODUCTS

-AUTHENTICITY

-RELATABILITY

-COMMITMENT TO DOING THE RIGHT THING

-SUSTAINABLE PRACTICES

-GENUINE REWARDS FOR CUSTOMERS

EXPERIENTIAL RETAILING EXAMPLES

Tiffany opened a new concept in Covent Garden in called the Style Studio, which focuses on personalisation.

Amongst a cinema, café, live music venue and art gallery, the bottom floor at the House of Vans holds the most unique feature of the building: the concrete ramp, mini ramp and street course.

Canada Goose opened its largest store in Montreal in 2018, which includes walk-in fridges where shoppers can test their coats in temperatures as low as -25°C. This also helps the retailer prove the quality of its products and help convince customers they are worth paying a high price for.

Ikea brought to life a unique experience to over 100 fans who won a Facebook challenge, letting them spend the night in its warehouse in Essex. They were able to select the mattress, sheets and pillows to fully give them a tailored experience to satisfy their needs. A sleep expert was on hand with tips for getting a good night’s rest, including how to find the perfect mattress for any sleeping style.

PLANNING FOR THE FUTURE : POTENTIAL CONCEPTS

TAILORING:

Offering an in-store only experience at limited times whereby customers can have their items (either new or pre-loved) altered to have a personalised fit. This is important as not every ‘Size 10’ or ‘Size Medium’ for example necessarily has the same body shape.

Customers would have an incentive to visit store and would have a shopping experience more luxury. It would pay homage to Burberry’s history, with their brand having a reputation for quality and manufacture. Also, if a product is fitted precisely, they may be more likely to keep it for an extended period of time, again contributing to the consumers expanding interest in sustainability.

PRODUCT GUARANTEE & REPAIRS:

Burberry products coming with an individualised guarantee to increase customers belief in the durability of the higher price point product and also help them feel like they are being considered. If a product does get damaged before this guarantee is over, they are offered repairs for free. After this guarantee, they are still able to get repairs for a cost.

PLUZ SIZE, ‘TALL’ COLLECTIONS ETC:

It is necessary for Burberry to expand their sizes in order to be more accessible and relatable. As well as this, different body shapes and proportions should be considered, such as ‘tall’ collections within womenswear and menswear. In-store stylists should be available to offer advice in styling if this usually excluded demographic feel unconfident- even referencing pear shapes etc. to have an open conversation about style.

PLANNING FOR THE FUTURE : POTENTIAL CONCEPTS

FACTORY LAYOUT OF STORE:

In terms of interior design, a layout resemblent of a Burberry factory (whilst aesthitcially pleasing) with a combination of new technology makes the store experience easier for a customer but reminds them of Burberry’s humble beginnings and their history. The story could even feature information on the brand around the store and feature archives such as vintage clothing, to create an in-store-museum effect.

MADE IN BRITAIN:

Burberry should strive to be more authentic and transparent across their ‘Made In Britain’ ranges, whereby the majority of their manufacture is in China. This, alongside the closing of British factories faced cirtsicm because of the hypocrisy and dishonesty. A relaunch of British Burberry factories and more honest approach to these ranges would bring back customer trust in the authenticity of the brand. A factory launch would also create employment opportunities in the Britain.

FASHION SECTORS:

Burberry could make the shopping experience easier for consumers who aren’t returning customers to Burberry, perhaps don’t fitting the ‘elite’ community previously associated with the brand. A way to do this could be to make certain sectors within their lines categorised clearly, seen across high street (e.g. H&M”: Divided, Basics etc.). These sectors could include Workwear, Occasionwear to maintain luxury appeal.

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