After a decent performance last year with a revamped, modern style, Burberry’s sales have plummeted as it has felt the full force of the Covid-19 crisis across its markets.
In APAC, sales declined 10% but returned to growth in June as the brand was wise to focus on these rebounding economies, with a leather-goods campaign in Mainland China resonating especially well with new, young shoppers.
Revenue in EMEIA fell by c75% due to lockdowns and a reduction in travel, and is likely to be the most affected region in the long term as tourist spend will take a long time to recover, and consumers will be less willing to buy luxury items. In the Americas, sales fell by 70% and improved in June, though this trend is unlikely to hold as Covid-19 cases rise rapidly and states pause reopening plans.
Other luxury players’ digital propositions pale in comparison to Burberry’s, which stands it in good stead in case of future lockdowns, with online full price sales growing double-digits in the quarter.
The retailer excels at using social media to engage with consumers, boosting loyalty among its young shoppers. Its summer Monogram capsule collection has performed particularly well, with its campaign featuring endorsement from Kendall Jenner, a Spotify playlist and a multi-player digital game all extending its reach on social media.
In China, Burberry trumpeted what it called its “social retail site,” which it claimed can “connect shoppers’ digital experiences to the physical environment,” which involves technology that interacts with customers via their smartphones. Though the future of experiential retail remains in doubt due to the impacts of Covid-19, experience is likely to remain important among luxury shoppers, and will help cement brand identity and loyalty.
Burberry’s modern, streetwear-focused style direction has boosted its popularity among younger shoppers again, and though this demographic will be hit hard by job losses, they will also be more likely to buy clothing and footwear after lockdowns.
The actions Burberry is taking will also resonate well with these young, more ethically-minded shoppers, such as being the first luxury fashion brand to join the Stonewall Diversity Champions programme, and launching ReBurberry Edit in April, a collection of 26 styles made from more sustainable materials.