Close this search box.

How Burberry is supercharging its strategy to meet new consumer expectations

Image: Adobe Stock

Burberry is a stalwart of the luxury apparel market and has been one of the monobrands that was already well on its way with digital transformation before the pandemic. This has been accelerated by the pandemic and has generated growth across 2020, despite lockdowns.

Sales in 2020 ended just 1.5% down on 2019 – a remarkable feat considering the 50% contraction of the whole luxury market over that period. The key for Burberry has been to rapidly adapt to the new ways consumers had to shop during lockdown and then to pivot again as stores started to reopen. It has done an impressive job of knitting together the old and the new to create a proper technology-led omni-channel offering.

The luxury retail brand localised marketing campaigns to its strongest markets, including China and South Korea, and opened a social retail store in Shenzhen. Digital leadership, it says, drove double digit growth in full-price online sales across all of its regions despite a wider sales decline.

In 2021, sales were down by 9% on a like-for-like basis that excludes the effect of store openings and closures. Sales were down by 25% in the first half before recovering to growth of 5% in the second half of the year. And in the fourth quarter of the year alone, like-for-like sales grew by 32% on 2020, but fell by 5%. Full price sales alone were 8% ahead of the previous year as a new group of customers bought. Wholesale declined by 17%.

At the same time, its stores around the world were closed under Covid-19 lockdowns for an average of 18% of the time, while the impact of reduced tourist traffic also hit sales.

Pre-tax profits of £492.2m were ahead of the £168.5m reported a year earlier at

the top line, but after one-off costs of £125m, bottom-line adjusted pre-tax profits

came in at £365.7m, 12% down from £414.1m a year earlier.

Burberry chief executive Marco Gobbetti says: “In the last three years, we have transformed our business and built a new Burberry, anchored firmly in luxury. We have revitalised our brand image, renewed our product offer and elevated our customer experience while making further progress on our ambitious social and environmental agenda. In spite of Covid-19, we achieved our objectives for the period and delivered a strong set of results in FY21, ending the year with good full-piece sales growth. In this next chapter, supported by these foundations and the strength of our teams, we will accelerate our growth and deliver value creation while continuing to build a more inclusive and sustainable future.”

The brand has used digital to support both its online and offline sales. It opened 11 new shops during the year, and has developed a new store concept that will soon start to be rolled out. Burberry says an omni-channel focus has extended to in-person and virtual appointments and client events, mitigating the effect of reduced traffic.

Burberry plans to “supercharge” online sales through digital leadership and to invest in omni-channel experiences including the store while in building brand engagement and by focusing on its core luxury outerwear and leather categories. It will also focus on full price sales as it looks to improve its profitability.

The retailer says it continues to focus on becoming carbon neutral by 2022, and that all of its stores in mainland China are now carbon neutral. By the end of this year it expects to use 100% renewable electricity and to have a global carbon neutral footprint across its operations.

Burberry says it is continuing to adapt to the UK’s post-Brexit trade and cooperation agreement with the EU in order to reduce the effect both on its operations and its customers. “We have initiated a number of actions to mitigate duty costs including collating evidence in support of claiming preferential duty rates,” it says, “streamlining product flows to minimise movements of goods between the UK and EU, and establishing a customs warehouse.”

This article was originally published in the Global Luxury Report 2022. Download the full version here for industry-leading insight into the $252bn luxury market, including consumer demand, growth vectors and best practices in the sector.

Read More

Register for Newsletter

Group 4 Copy 3Created with Sketch.

Receive 3 newsletters per week

Group 3Created with Sketch.

Gain access to all Top500 research

Group 4Created with Sketch.

Personalise your experience on