Burberry has unveiled a three-year plan with omnichannel excellence at its heart as it looks to boost revenue and cut £100m in costs at a time of falling profits and a slowdown in the wider global luxury market.
The retailer, a Top250 retailer in IRUK Top500 research, today unveiled revenue of £2.5bn in the year to March 31, down 1% on the previous year, and pre-tax profits of £415.6m, 7% down.
Omnichannel expertise will sit alongside a focus on retail productivity and a focus on key products as Burberry looks to reverse that downwards trend in a luxury market that it expects to see grow in single digits over the next five years. That growth will come largely as new and existing Chinese consumers spend while travelling and at home. Today’s luxury customers, says Burberry, are looking for experiences, newness, authenticity and storytelling, which they want to see delivered through service-driven and personalised contact, with the greater use of technology – and particularly mobile.
Burberry says research and its 40m social media following show that it is it is recognised by those consumers and others as a leading luxury brand . As well as working to boost and communicate that brand awareness, it aims to cut its operating costs by 10%, or at least £100m, by simplifying processes. In omnichannel, the company aims to focus on local customers, using customer insight to boost loyalty, while focusing investment on selected cities.
It will relaunch its burberry.com website, introduce a customer app that will include mobile checkout and improve customer connectivity in its pursuit of omnichannel excellence. It aims to boost conversion, especially on mobile, while improving the customer experience across online and offline sales channels. It will actively foster its sales through third-party retailers, both online and offline, since it expects growth to come from that area, as well as through social commerce.
Chief creative and chief executive officer Christopher Bailey said: “While we expect the challenging environment for the luxury sector to continue in the near term, we are firmly committed to making the changes needed to drive Burberry’s future outperformance, underpinned by strong brand and business fundamentals.
“We continue to see significant opportunities ahead of us and have put ambitious plans in place to increase future revenue, enhance productivity and create a more efficient organisations.”
