How the luxury company became China’s leading Western brand
Ahead of the Game
Seventy-five percent of all luxury sales today are influenced by digital in one way or another, according to a McKinsey & Co study, Digital Inside (2015). Despite this, many luxury companies have been slow to come up with a digital strategy and invest in digital resources, fearing that this would lessen their control of messaging and threaten the very exclusivity that they have worked so hard to achieve.
One brand, however, decided early on to embrace digital and to integrate digital into everything the company does.
In 2006, Burberry, with Angela Ahrendts at the helm, made the strategic decision to become the first fully digital luxury company, wanting to develop a well-defined and modern brand identity as well as offer a superior customer experience.
Ten years later, Burberry is renowned for being among the most digitally savvy companies within the luxury sector. In 2012, the company was recognised as the top “digital” fashion brand in the inaugural Digital IQ Index, published by digital intelligence firm L2. Since then, it has remained at the top of this annual survey and, in 2016, was chosen as one of China’s digital luxury leaders.
As discussed last month in my article, Cracking China through Digital Activation, success in the Chinese market for consumer facing businesses is very much influenced by a company’s digital presence and its implementation of innovative digital campaigns across multiple channels.
Burberry’s investment into digital has significantly enhanced its position in China, attracting fans among the growing affluent class as well as among aspiring millenials.
A Chinese Love Affair
For luxury brands, China represents a major source of continued growth for the sector with Chinese consumers having become the largest spenders within the category globally.
But…the love between the Chinese and luxury brands is mutual. As they become more affluent, the growing Chinese middle class sees their ability to consume luxury items as a way to amplify their wealth. Chinese millennials, in particular, are an emerging consumer group, which sees Burberry and other western brands as iconic, aspirational and now attainable. This younger, more sophisticated generation of shoppers with markedly different tastes, aspirations and consumption habits is in fact reshaping the landscape of luxury in China.
The China market is now the third largest for luxury goods in the world after the US and Japan. And, according to Bain & Company’s Luxury Goods Worldwide Market Study (2015), Chinese consumers account for the largest portion of global purchases (31%), followed by Americans (24%) and Europeans (18%) and spend far more abroad than in Mainland China, which accounts for only 20% of their global purchases.
For these luxury brands to standout in a rather sophisticated consumer market such as China, however, a digital strategy is essential.
Digital to the Core
At Burberry, digital is at the company’s core. It is not a separate division that fights for internal resources to pursue a strategy parallel to its traditional bricks and mortar business. It is, rather, at the heart of the company’s way of thinking and is integrated across all aspects of the business, offering an innovative customer journey online, in-store and on mobile.
Burberry’s corporate website proudly touts the company’s enthusiasm for digital: “Burberry’s digital first approach runs throughout the organisation. Focusing on offering a seamless and personalised experience wherever customers encounter the brand, Burberry refined how online and in-store innovations worked together.”
An Innovative Pioneer
In 2009, Burberry became one of the first retailers to engage directly with its customers on social media, integrating user generated content (“UGC”) into a media campaign for the iconic Burberry Trench Coat, the Art of the Trench.
For the campaign, the company launched a micro site encouraging its customers to post personal photos with them in a Burberry Trench. Users were encouraged to comment, ‘like’ images and share the photos via social media and e-mail. Within a year, Burberry’s Facebook page had more than a million followers; the largest at the time for a luxury brand and Burberry recorded a 50% growth in e-commerce sales year on year. In 2014 the campaign was rebooted to give it a global footprint. The reintroduction video has had more than 1.4 million views, while the micro site has had nearly 25 million views to date.
More recently, Burberry was among the first to test social media channels, launching campaigns on Snapchat and Periscope, as well as trialing Instagram’s video ads and Twitter’s buy buttons as those platforms launched. (Digiday UK)
Such digital prowess has propelled the company to the limelight in China with innovative local campaigns and activities that often out-perform even native Chinese brands.
Burberry has a solid presence across all of the primary digital channels in China. On Tmall, a China-based e-commerce site, Burberry was able to shine on social media when it allowed followers to pre-order personalized items directly from its runway live-stream video—a move that caused a major stir in the global fashion industry.
In early 2016, Burberry launched festive campaigns and bespoke product assortments in China to celebrate Lunar New Year and Golden Week. The campaigns were supported by social media initiatives, including an exclusive WeChat messaging experience that resulted in the highest level of content engagement on the platform for a Burberry campaign to date.
Similarly, Burberry’s decision to use Chinese celebrity, and Key Opnion Leader, Wu Yifan (吴亦凡) for its 2016 Fall/Winter Menswear fashion show “broke the Chinese internet,” according to the Jing Daily, which resulted in both viral sharing and extensive media coverage.
An Impressive ROI
Burberry went through historic transformation between 2006 and 2014. During this period, the company evolved from a British fashion icon into a Global fashion leader. It is today easily regarded as one of the most coveted and aspirational luxury brands in the world.
In addition to being ranked first in the L2 survey, as noted above, the company won Creative Campaign of the Year at the 2015 British Fashion Awards and was listed in the Interbrand ‘Top 100 Global Brands’ for the seventh consecutive year, ranking as the strongest UK luxury brand globally.
On social media platforms, Burberry today has has more than 17.2 million likes on Facebook, 7.4 million followers on Twitter and 8.3 million followers on Instagram.
“At this point, Burberry has established itself as a digitally savvy brand among other industry barons — Apple, Nike, and Google,” said L2.