Burberry's Strategic Shift: Prioritizing Brand Revitalization for Business Transformation

Burberry

Burberry plans to “refocus” on its brand and invest at the top of the funnel to fuel its turnaround plans.

The fashion retailer's pre-tax profits for the year ending 30 March 2024 dropped from £634m to £383m, with overall revenues also decreasing by 4% to £2.9bn.

Despite the decrease in financial figures, CEO Jonathan Akeroyd remains optimistic about the company's "refocusing" on the brand, believing that it is yielding positive results.

On a call with analysts today (15 May), he mentioned that Burberry is now focusing more on the top of the marketing funnel. The company's marketing strategy is changing, with less emphasis on performance marketing and more on driving traffic to the brand at the top of the funnel.

Luxury brands have been facing difficulties recently, and Burberry anticipates ongoing challenges in the first half of its 2024 fiscal year.

Akeroyd admitted that executing their plan during a period of decreasing luxury demand has been difficult.

In response to this challenge, Burberry is making changes to its pricing strategy. Akeroyd mentioned that the retailer's prices are now more aligned with where they should be, helping to establish the brand's credibility. However, the CEO also acknowledged that it will take some time for the full implementation of these price adjustments.

The brand announced its goals for the upcoming financial year. This includes enhancing brand messaging and putting more emphasis on storytelling in its product offerings.

Burberry has undergone two rebranding efforts within a span of five years. In 2018, the fashion label made a significant change by replacing its well-known logo, featuring a knight and horse that had been in use since 1901, with a simpler sans-serif monogram.

In 2023, Burberry made a comeback to its traditional roots by reintroducing the knight and horse emblem.

According to Akeroyd, there has been a noticeable increase in brand clarity and engagement with the brand. However, he acknowledges that there is still more work to be done for people to fully understand and appreciate their efforts.

He added that Burberry expects its “brand heat to improve”, claiming consumers are appreciating the work being done “in terms of coming back to really what we stand for as a brand”.

Editor's P/S:

Burberry's financial downturn reflects the challenges faced by the luxury sector, prompting a strategic shift towards brand revitalization. The company's focus on top-of-funnel marketing aims to strengthen brand awareness and drive traffic, a departure from previous performance-based strategies. Additionally, Burberry is adjusting its pricing to enhance credibility and reinforce its brand identity.

Despite these initiatives, the company acknowledges ongoing difficulties in the luxury market. However, CEO Jonathan Akeroyd remains optimistic, emphasizing the positive impact of Burberry's rebranding efforts on brand clarity and engagement. The company's goal of enhancing brand messaging and storytelling in its products suggests a commitment to differentiating itself in the competitive landscape and fostering a stronger emotional connection with consumers.