Burberry, the luxury fashion house, has recorded a major fall of 12 percent in sales along with a stale annual revenue of £2.97 billion ($3.77 billion). The stock has also experienced a 57 percent drop within a year. Factors such as economic decline due to COVID-19 and in-house strategic flaws are seen as primary contributors to the downturn. Despite digital marketing efforts and the launch of a fresh designer line, the company continues to lose its edge in the fiercely competitive luxury market.
Broad economic factors such as slow market growth and high inflation rates, plus political uncertainties like Brexit and the China-US trade war, have adversely affected the purchasing power of the affluent customers. This, coupled with heightened competition and a growing preference for sustainably manufactured products, adds to the challenges Burberry is grappling with.
The repositioning decision of the company over the past decade, aimed at penetrating the upscale market, appears to have missed the mark. Major competitors such as Gucci and Louis Vuitton continue to outperform Burberry, signaling its failing bid to match the high-end recognition achieved by those luxury fashion houses.
Burberry’s tumultuous journey in luxury market
Particularly, Burberry’s efforts to extend into cosmetics and fragrances have not stimulated sales, highlighting that our strategic move towards the upscale market may have been misguided.
Despite the quality of products, high prices coupled with recurring emblematic patterns have led to discontent among customers. The decrease in employee satisfaction and dwindling sales in younger demographics suggest a mismatch between Burberry’s traditional appeal and shifting preferences of affluent consumers.
The CEO is pushing for a complete brand makeover, including store refurbishments and expanding product lines. This also involves exploring distinctive marketing strategies, such as broadening online sales channels and unorthodox advertising campaigns. Furthermore, a major focus is being placed on sustainability and ethical practices, reflecting the increasing demand for responsible brands.
Together with this, initiatives are underway to improve customer relations through better customer service and personalized care, including after-sales services and a customer loyalty program.
Meanwhile, the creative director is working to revitalise the brand by emphasising its British roots through refreshed collections and campaigns in an attempt to redefine brand image. The future holds the key to the success of these intensive measures aimed at repositioning Burberry in the global luxury market.
