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Information Resource

In: Business and Management

Submitted By hzh17
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Entrenched in the Digital World
Executive Summary: In 2009, British luxury brand Burberry, like its competitors, was still unsure of how to build a valuable presence in social media. This case study looks at how it eventually capitalised on the new medium - without eroding the exclusive, aspirational qualities that are core to the world of luxury.

In 2009, fashion house Burberry was feeling the pressure of the economic downturn, even though its financials had been strong over the past decade. Revenue growth dropped from 18 and 15 per cent in the previous two years to seven per cent that year, excluding the impact of foreign exchange rates, while operating profit margin shrank from about 15 per cent to 9.8 per cent. In this harsh retail environment, Burberry recognised the potential value of the digital media. In March 2009, with 175 million users on Facebook and 600,000 more joining it each day, Burberry began allocating marketing and public relations spend and dedicated personnel to pursue tech-age marketing. Building a social media presence seemed critical, but the question was, "how"?

Burberry was founded in 1856 when 21-year-old Thomas Burberry, a former draper's apprentice, opened his own outdoor apparel store in Basingstoke, Hampshire, England. Soon after, the company introduced the gabardine, a water-resistant but breathable fabric, and started producing the trench coats that would become famous in England and around the world. By the end of the 20th century the brand was going through difficult times, as the company's strategy had not been consistent with the Burberry brand identity. In 1997, Rose Marie Bravo, former president of Saks Fifth Avenue, was named CEO. She and her team initiated a series of changes that repositioned the brand, targeting a younger and higher-end audience, and raised it back to the top of the fashion world.

Burberry introduced the gabardine, a water-resistant but breathable fabric, and started producing the trench coats that would make them famous in England and around the world
In 2006, Angela Ahrendts assumed the CEO's position after Bravo retired. She and Christopher Bailey, Chief Creative Officer, focused on digital media as one of Burberry's main strategies to continue strengthening the brand.

Burberry had already joined Facebook, but Bailey wanted to do something more, something distinctive and unique to the brand. Burberry's luxury sector competitors may not have yet made any major waves in digital media, but Burberry's executive team had never been too focused on its peers. Instead, it looked to other iconic brands such as Nike, Apple, and Google. These brands were hitting social media hard, and Burberry wanted to follow suit. The mandate was simple: to develop a campaign that was innovative and would engage younger consumers.

The Burberry brand was democratic and fashion forward. No product better reflected this than the iconic trench, which over the course of its history had been worn by soldiers, royalty, celebrities, and the working class, each group wearing it with its own style and flair. In recognising this unique status of the trench that encompassed Burberry's brand pillars of democratic luxury, function, and modern classic style, the team was on to something. It also recognised that street style photography had become a hot trend, and worked well with the trench look. These two pieces came together in one big idea: why not leverage existing Burberry customers, who personify the brand, to generate content that appeals to them and to their peers?

In the year after the launch of the Art of the Trench in November 2009, Burberry's Facebook fan base grew to more than a million, the largest fan count in the luxury sector at the time
With that revelation, the idea for the Art of the Trench campaign was born. The team envisioned a website where existing customers could share photos of themselves wearing their Burberry trench coats, giving them their '15 minutes of fame' as models on the site, and allowing other customers to admire their sense of style.

The Art of the Trench site was designed carefully to walk the fine line between appealing to Burberry's high-end customer base and also generating interest in the new youthful, aspirational future customer. For this reason, the campaign was designed as a standalone social media platform, instead of being hosted on an existing platform. This ensured Burberry had control over the look and feel of the site that existing platforms such as Facebook could not offer. The initial idea centred on the trench and the team opted to stick with this limited focus rather than include other apparel.

To kick off the campaign and set the tone of the images, the team brainstormed about getting a partner and finally chose Scott Schuman, also known as The Sartorialist, after his street style fashion blog. Schuman was a pioneer and a leader in the fashion blog world, with his site averaging around 13 million page views per month by 2011.

To engage both existing and aspirational customers, the Art of the Trench offered two levels of participation. Customers could upload photos of themselves in their Burberry trenches, and customers and "aspirationals" alike could comment on them, 'like', and share the photos via Facebook, email, Twitter, or Delicious. Users could also sort photos by trench type, colour, gender of the user, weather, popularity, and the where the photo originated (user submitted, Sartorialist, fashion), and click-through to the Burberry site to make a purchase.

Rather than explicitly market the Art of the Trench, Burberry opted to rely largely on public relations and word of mouth generated through The Sartorialist and users sharing their submissions on Facebook and Twitter. This tactic allowed the Art of the Trench to have an exclusive 'in -the-know' feel that appealed to the luxury consumer. Following on the launch, Burberry hosted events to continue driving excitement around the trench in diverse markets including India, France and Brazil.

By the end, the team had crafted a site it felt would meet its goal of engaging younger consumers in an innovative and exciting way.

In the year following the launch of the Art of the Trench in November 2009, Burberry's Facebook fan base grew to more than one million, the largest fan count in the luxury sector at the time. E-commerce sales grew 50 per cent year-over-year, an increase partially attributed to higher web traffic from the Art of the Trench site and Facebook. The site had 7.5 million views from 150 countries in the first year. Conversion rates from the Art of the Trench click-throughs to the Burberry website were significantly higher than those from other sources. By all metrics, quantitative and qualitative, the campaign was a success.

The success of the Art of the Trench affirmed Burberry's strategic focus on digital. By 2012, Burberry had moved 60 per cent of its marketing budget to digital. It also had the most number of Facebook fans and Twitter followers in the luxury sector. CEO Bailey described Burberry as being "as much a media-content company as a design company".

Burberry has executed many other digital innovations, setting the bar for online customer engagement. Each of these initiatives has built on the digital strategy Burberry kicked off with the Art of the Trench, and has led to the brand's pre-eminent status as a tech-savvy brand.

Ahrendts and Bailey have been applauded for their pioneering moves, and Burberry has been recognised as "the industry leader when it comes to technological awareness," achieving "genius" status in the digital IQ report by Luxury Lab, a think tank on digital innovation.

Financially too, the strategy seems to be paying off, with company sales more than doubling and stock growth of nearly 300 per cent since Ahrendts's arrival in 2007. Rivals have tried to keep pace with varying levels of success, but none have gone full throttle like Burberry.

Despite Burberry's success, there are those who doubt the sustainability of the brand's digital strategy and wonder if letting fashion take a backseat may lead to the company's downfall. Sales, profit, and share price growth have all begun to slide this year. Growth in China, Burberry's largest market, has been hit hard.

Ahrendts has defended her strategy. "I've seen what happened to brands like Kodak that did not keep up with digital change. That's a lesson in what to avoid," she has said. So, is the strategy responsible for Burberry's return to market leadership and the clear path forward? Or is it a strategy blindly, excitedly pursued that may be too great a deviation from the company's core business?

http://businesstoday.intoday.in/story/burberry-social-media-initiative/1/191422.html…...

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