Fashion retail and digital: The Burberry case

I recently came across a study done by ContactLab which reveals some amazing facts about Fashion Retail merging with Digital. According to their study “Digitally driven in-store sales already account for 1/4 of retail revenues already. The study anticipates that by 2020, luxury brands will virtually know each of their client by name. They also state that separating digital and physical luxury will make no sense by then. In fact, the digital playground will grow to 50% of sales with pure e-commerce to represent 2 to 3 times the current levels. I found a surprising fact: for luxury brands, e-commerce currently drives 6% of their revenue only. Digital is expected to drive about 40 percent of projected sales growth in fashion retail from 2013 to 2020. So what’s the secret here? Well, growth doesn’t simply just mean increase in e-commerce sales. It’s also about Digital Transformation.

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The Burberry case:

One great example here is the British brand Burberry.

Burberry underwent a seven- year transformation from an underperforming, marginalized, over-licensed, decentralized brand, to becoming one of the most beloved and valuable luxury brands in the world, tripling sales in five years.

One year before Instagram, Burberry introduced the Art Of The Trench ( online forum for people to post photos of themselves and others wearing the company’s coats). While competitors such as Prada and Marc Jacobs were still getting into online in 2010, Burberry’s customers could alreadyorder clothes directly from its runway shows as it streamed them live online.

The brand is embedding digital chips into products, which activate short films telling the story of its creation, including sketches and runway clips. How amazing is that? When a consumer moves around the store, these chips react with mirrors causing them to turn into digital screens thatdisplay further digital content. I went to their signature store in London and saw this first hand. Very cool experience.

Burberry also has a solid relationship with social networks including Facebook, Twitter and Google. Also, Burberry were one of the first luxury brands to use the social networking giant, with the launch of their Facebook page in 2009.

Twitter was one of the firsts to launch its click-to-buy button with Burberry which allowed customers to buy a selection of nail polish colours worn by the models directly from a tweet.   Burberry also collaborated with Google with Burberry Kisses, allowing users to kiss their touch screens and send their lip prints to loved ones.

Burberry  also launched a made-to-order catwalk and “smart personalisation” service, whereby customers can order bespoke pieces straight from their fashion shows.

Former Burberry CEO Angela Ahrendts, who now runs Apple’s retail and online operations  said “Walking through the doors is just like walking into our website.”

Unfortunately, retail fashion brands remain slow in building up their digital capabilities . There are notable exceptions, of course.

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The Fashion Retail market is also growing at relatively fast pace, especially in Asia. However, growth in developed countries such and USA, Australia and Canada already may have reached it’s peak.  Thus, the race for customers in fashion retail is speeding up and apart from entering growing markets in Asia, fashion retailers will continue turning into digital to fully capture the market potential.

Georgi Georgiev

Georgi Georgiev

Georgi is passionate about building companies, marketing and learning foreign languages. He previously worked for Techstars in London, UK. Currently, he invests and builds start-ups with Potential.vc in Asia. He attended Lund University in Sweden and Rollins in Florida, USA.
Georgi Georgiev

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