Burberry this week showed how it uses digital as a “key driver of growth” for its business.
Online full-price sales grew by more than 50% in the third quarter of its financial year – and at leat doubled in mainland China. The luxury retailer used digital to make its stores available to customers even during lockdowns, using tools including live chat, virtual appointments and virtual client events. Its strategy also included pop-ups and local activations on its .com website.
The update came as Burberry reported retail revenue of £668m in the 13 weeks to December 26 – 4% down on the same time last year as tourists stayed at home and stores were closed under temporary lockdowns. Like-for-like store sales fell by 9% during a period when, on average, stores were closed for 7% of the time. Currently, 15% of Burberry shops are closed, and 36% are operating with reduced hours or restrictions.
But at the same time, it added to its existing repeat customers, new, younger shoppers willing to pay full price. Full-price sales of leather and outwear goods grew in the low teens. And Burberry also won customer attention for its Christmas campaign featuring footballer and chid poverty campaigner Marcus Rashford and, in China, for its Lunar New Year campaign and film.
Marco Gobbetti, Burberry chief executive, says: “Despite the challenging external environment, we made good progress on our strategic priorities in the quarter. We saw a strong increase in full-price sales as our collections and communication resonated well with new, younger clientele as well as existing customers. Our localised plans and digital capabilities helped drive growth in rebounding markets and we implemented our planned reduction in markdown. While the short-term outlook remains uncertain due to Covid-19, we are well placed to accelerate when the pandemic eases.”
Burberry says it is working through the details of the EU-UK Trade and Cooperation agreement and finding ways to mitigate short-term disruption and costs.
“Based on our preliminary analysis, we expect a modest increase in border trade compliance costs as well as some incremental duty under the rules of origin,” it says in its third-quarter trading statement. It adds that while the end of the VAT refund scheme for non-EU tourists would not affect its business in the current year, it would reduce the attractiveness of the UK as a luxury shopping destination int he future, and says: “We are looking at ways to mitigate any impact this has as tourists return to mainland Europe.”
Burberry currently trades from 215 shops, 148 concessions, 57 outlets and 44 franchise stores, as well as online. It is a Top350 retailer in RXUK Top500 research.