Retail is arguably the industry that has been most impacted by digital technology and yet, still has the greatest potential for further innovation. Luxury brands, however, have been slow to embrace it. Despite e-commerce spending surpassing 300 billion in the US in 2014, many luxury brands still have limited or no ecommerce experiences. Haven’t visited chanel.com recently? Well, Chanel only offers beauty and fragrance items available for purchase online. Although Chanel has announced a partnership with Net-a-porter to expand their e-commerce or “e-service” offering in 2016, there remains questions around which products will actually be available for purchase. Céline product pages only offer contacting customer service or locating a store to customers who are potentially looking to buy a product. Despite the poor performance of these brands, Burberry has emerged as a luxury brand who has truly embraced technology both instore and online, capturing more value despite decreasing their product lines.
Early ecommerce experiences emphasized function over design. Understanding that the success of a brand, especially one with aspirational status, is heavily tied to the shopping experience, luxury brands were not willing to compromise design or service for online sales. Burberry launched its first ecommerce website in 2004, but it was not until 2009 that digital became a core focus of the business. They provided a consist shopping experience online and instore, launched campaigns that utilized technology to capitalize on user generated content, found ways to further share the Burberry history of craftsmanship through embedded technology and used technology to simplify inventory management across channels.
Art of the Trench Campaign
In 2009, Burberry launched the “Art of the Trench” campaign enabling customers to submit pictures of themselves in their trenches with the best pictures featured on the Art of the Trench website. Customers could then like and share their favorite posts as well as follow Burberry on facebook or click through to burberry.com. This campaign initially resulted in a 50% increase in e-commerce sales from the previous year and helped them reach 1 million facebook followers. Art of the Trench, now embedded into burberry.com, continues to to have amazing user-generated images.
Burberry Kisses Campaign
Burberry partnered with Google in 2012 and 2013 to launch the Burberry Kisses campaign, allowing users to virtually capture their kiss and send it to anyone in the world. By the end of the campaign users from over 215 countries had participated, solidifying Burberry as an innovator in the luxury space. This campaign also allowed for increased awareness of higher margin beauty and more recently skincare items.
Smart Personalization enabled customers to personalize their products and unlock videos, highlighting the craftsmanship and history of the item they purchased. These videos could be viewed using a mobile device or projected on a screen in the London store. This enabled product owners to feel more connected to the brand and their custom items.
This year Burberry piloted inventory sharing across in-store and online in the China market. This provides further value to customers since they can order online and pickup in store or order in-store and have their items delivered to their home. Inventory sharing also resulted in decreased delivery times to customers from ten days to less than three. There are plans to expand this program to other markets including the UK and the US.
Burberry traditionally created and captured value through producing and selling goods. Through technology they have been able to create value through user generated content, shopping convenience, and shared experiences while still capturing value through increased revenue. I am excited about the potential of technology in the luxury retail space as more brands make digital a priority.