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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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Burberry reports strong digital growth as customers move between online and offline

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Burberry reports strong digital growth as customers move between online and offline
Burberry reports strong digital growth as customers move between online and offline
Burberry today pointed to strong growth in digital as customers increasingly moved between shopping channels during the course of a purchase, as it unveiled its first-half figures today.

Retail revenue rose by 15% in the first half, but channels that linked the store and online grew faster. “Customers increasingly moved between offline and online throughout their purchase journey, reflected in the contribution to digital sales of orders via iPads in store (over 25%) and ‘order online, collect in store’ (over 20%),” said the Burberry Group in today’s statement to the City. It also said an October 2014 upgrade to its mobile platform had enhanced the customer experience in 11 languages and 44 countries.

Earlier this year the company started to sell on marketplaces including Amazon and Tmall.com as it looks to grow its sales still faster. Its strategy to invest in emerging markets also saw it work with Chinese social media partner WeChat. Later this year it will introduce a virtual single pool of inventory in China to give customers in the country access to any item in the country, whether in a store or a distribution centre.

In its statement to the City, the luxury clothes-to-perfume brand said its figures, which saw revenues grow by 14%, were driven by “the focused execution of Burberry’s strategies to drive brand momentum, product excellence and enhanced customer experiences, both on and offline.”

Revenue of £1.1bn in the six months to September 30 was up by 14% compared to the same time last year, or 7% when currency fluctuations were taken into account. But pre-tax profits of £142m were 11% down from the £159m reported at the same time last year.

“Looking ahead,” said chief creative and chief executive officer Christopher Bailey, “in a more difficult external environment, we continue to focus on the things that we can control. Through authentic products, great customer experiences and a culture of continuous improvement and innovation, we remain confident of Burberry’s sustained outperformance.”

Burberry pointed to other digital innovations that helped the brand to outperform online. They included a partnership with Twitter at the Spring/Summer 2015 womenswear show to introduce In-Tweet purchasing. US shoppers were able to buy nail colours as they appeared on the runway.

The company is also investing in a customer value management programme that builds on its single view of the customer around the world to target high-spending and high-potential shoppers with more personalised and relevant messages.

Burberry said retail revenue accounted for 68% of its revenue, from 216 mainline stores, 224 department store concessions, digital commerce and 55 outlets. Digital, it said, outperformed in all regions.

“For the half as a whole,” it said, “we saw continued soft traffic in store, but growth online, reflecting evolving consumer behaviour. Conversion improved both off and online, resulting from our investment in customer service initiatives and digital capabilities.”

Wholesale, accounting for 29% of revenue was up by 13% year-on-year, or 8% when currency changes were taken into account, and licensing, bringing in 3% of revenue, fell by 3%, or 18% with fluctuating currencies.

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