Leading with Examples of Innovation

Straddling two worlds

Burberry reinvented itself by combining the traditional with the digital

  

GLOBAL 
Area of innovation: Customer experience
Year: 1997 to date

To survive in the intensely competitive industry of high fashion, companies typically compete by continuously reinventing their styles and offerings. Burberry, the traditional British clothing brand, decided to gain a competitive edge by focusing on providing an enhanced customer experience - both in their brickand-mortar stores as well as online. 

The new customer experience was created by combining traditional British fashion designs and in-shop boutique displays, with cutting-edge technology. This unique mix enabled Burberry to reinvent itself as a highly desired and admired luxury fashion house.

To deliver superior customer experience, Burberry prioritised its own branded boutique outlets over multi-brand stores. The new boutiques were re-styled to combine the traditional Burberry designs and classical British style with modern technology, such as touchscreens, iPod docking stations and the like - a mix that resonated well with today's luxury shoppers who value tradition, but at the same time embrace modern technology and lifestyle.

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TODAY'S CONNECTION
Burberry trebled revenues over 13 years, a big turnaround for a waning luxury brand. It has two American CEOs to thank for this - Rose Marie Bravo and incumbent Angela Ahrendts.

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Burberry did not limit itself to embracing modern technology only in its stores - it aggressively exploited the opportunities offered by the Internet, digital marketing and social media by making its online experience just as distinctive and 'branded' as its in-store experience. By doing so, it also widened its reach to a wide global audience.

Burberry began streaming 3D live broadcasts of its runway shows from five cities around the world and then putting these shows online through 80 partner websites, reaching a potential audience of one million.

In comparison, the traditional catwalk show in Milan or London is limited to a few hundred of its exclusive clients. Customers around the world can now view the show on their iPads, click on a product they like and have it delivered in a few weeks via Burberry's 'Worldstore' portal. 

Burberry was among the first to build a presence in social networks. It now has over six million 'fans' on Facebook - more than any other fashion brand, including competitors such as Louis Vuitton and Gucci.

Focusing on "virtual marketing" has also helped Burberry reach out to luxury-obsessed shoppers in emerging markets. With the help of technology and the Internet, Burberry has become one of the most recognisable and desired fashion brands in the new world economies like China - driving revenue growth both in the new markets as well as in Burberry's traditional markets.

This year, while other fashion retailers continue to report revenue decline and decreasing profits in the aftermath of the financial crisis, Burberry's revenue is expected to rise by around 27 per cent to $1.5 billion, with operating profit close to $300 million.

Deep Kalra, Founder & CEO, MakeMyTrip.com Innovation breeds efficiency In the rapidly growing and dynamic market of today, innovation is necessary for a company's growth, as well as to establish a brand. In this fast-paced world, increasing efficiency is the key requirement in order to face competition and sustain growth. Hence, innovation is essential as it breeds efficiency. With the impact of globalisation, increased access to the Internet and Web 2.0, there is significant development for companies that undertake quick, intelligent solutions that will help them build sustainable competitive advantage. Burberry has focused on creating customer delight through innovation in technology and providing best-in-class customer experience, both online and in its boutique stores, which is the right step forward. Burberry's customer approach is based on the premise that customer experience needs to be enhanced in order to elevate the brand's perception. India is potentially a big market for the brand, and Burberry has changed its global product, as well as its marketing strategy in accordance with the demographic changes in the Indian market. The products that have been added to the Indian offering are from the global portfolio, but still aligned to Indian audiences' preferences and taste. So the brand is moving in the right direction. Keeping the Indian context in mind, I would say it is extremely crucial Burberry uses Indian models on its website, as it would give potential Indian customers a realistic product presentation that they can relate to. In order to drive faster adoption, Burberry could try a hybrid model, in which it could display its key products in a few stores across major cities in India and use this to drive purchases online. In the present market scenario, it becomes important for all companies to innovate in order to stay ahead of competition. Local industry bodies and the government should set up innovation hubs and forums to drive leadership through innovation in growth industries such as retail, travel and technology. Also, companies should allocate funds to incubate projects that breed innovation and experimentation. But at the same time, they should build resilience for failure if it happens.