Burberry is a high-end British fashion house best known for its famous plaid pattern and trench coats. This recent Economist article explains how in recent years, Burberry has been noticing a decline in sales faster than any other luxury-goods brand. To combat this, current Burberry CEO Angela Ahrendts wants the brand to remain fresh by harnessing multiple uses of digital technology. In addition to two-story screens displaying images of the latest trends and interactive screens in-stores showing you how your favorite garment is made, Ahrendts is going to be testing a new concept called “Customer 360”. Burberry will keep a detailed record of every customer’s purchases in an effort to document spending habits. Some feel that Ahrendts is spending too much time “going digital” when there are other facets that need improvement.
Market Penetration is a smart strategy for Burberry. This London-based luxury brand wants to keep its image as such, and so the company wants to focus its attention on the type of customers they already lure. Incorporating technology into its stores is a great way to remain fresh, as well as attracting the younger generation of well off, luxury-seeking consumers. The two-story screens will definitely grab the attention of the people who are passing by, and could very well entice them to come inside. But of course, fancy displays are not enough.
“Customer 360” seems like a great plan to track customer purchase preferences and tailor their shopping experience. It would make your return to the store more personalized since the sales staff could figure out your fashion taste from a quick glance. However, it does not seem much different than the scanner data that is collected at grocery stores. Also, it was noted that some customers could find this new plan to be an invasion of privacy. It has been discussed that customers will have the option whether or not to join “Customer 360”, but there should also be a way to tell the cashier to not include some purchases to their buying history, such as gifts for a friend. Will this new plan of Burberry’s really be the factor that keeps their customers coming back? It is unlikely.
To stay current in this digital age, Burberry should focus their attention on generating interest via social media sites. By promoting themselves more on websites such as Facebook, Twitter and Foursquare, they can put excitement back into their brand. Since competitors such as Louis Vuitton and Chanel are not experiencing the same profit loss as Burberry, the company can use them as marketing models and see what factors are contributing to their ongoing successes. A different tactic the company can make that will still uphold their esteemed brand image is to create a separate fashion line aimed at a younger, but still well off, segment. Marc by Marc Jacobs, Lauren by Ralph Lauren, and Poppy by Coach are all successful examples that Burberry can model after. If Burberry can get these young, affluent consumers loyal to their brand now, that guarantees decades of repeat purchases. What this 150-year-old company needs is to gain traction with the upcoming fashionistas of the world. Burberry is wise to focus their attention on the digital trend because, unlike their plaid scarves, it is not at risk of becoming a fad.
