A Razor Sharp Focus
Angela Ahrendts, the acclaimed CEO of the luxury label Burberry, was the star attraction at an HKUST MBA CEO talk where she engaged in conversation with Prof Ron McEachern and answered questions from students and alumni, who filled every seat in the venue.
Burberry has almost tripled its revenue and share price since 2006 and is one of Interbrand’s top 100 global brands for the past four consecutive years. This year Burberry was also named Oracle/Retail Week “International Retailer of the Year”. Angela was asked by both Prof McEachern and students – what were the secrets of her, and Burberry’s, success?
The answer: set your priorities and focus, focus, focus.
“I’m clear on my priorities” – which are children, husband, job – “and I am a czar at managing my time. I’m always home on Friday night and I rarely fly out on Sunday night because that is my family night,” she said.
“The biggest mistake executives make is they focus outwards sometimes instead of really understanding who they are. You’re not going to be great at everything. If you know who you are, you can put yourself in the right position so your passion and your innate energy comes through, every single day.”
That approach has helped her to turn around the 156-year-old Burberry brand. Ms Ahrendts told the gathering that one of the reasons she joined the company in 2006 was because she had previously worked well with Chief Creative Officer Christopher Bailey and knew that together, they had an incredibly strong vision for what kind of company they could create.
“If you want to be a global player, we feel very strongly that you need to have a brand czar. We decided early on that anything the consumer saw needed to have one laser point of view from Christopher,” she said.
That point of view was narrowed down to three things that define Burberry: Britishness, heritage – it is the only luxury brand born from a coat (the iconic trench coat) – and its alignment with the youthful “millennial” consumer.
“We said we’re going to make outerwear our core, we’re going to target the millennial consumer and if we’re going to do that, we’re going to do it in a language people are comfortable with, which is digital,” Ms Ahrendts said.
A Chief Technology Officer was appointed to help turn Burberry into the world’s most digital luxury brand as it re-focused away from wholesale to investing in mainline retail.
Most consumers now also encounter the brand online and Ms Ahrendts told participants that the company was careful to ensure that retail and digital impressions were aligned. One student asked about the attempts of license-holders in some places to put their own stamp on the Burberry brand and she said they had zero tolerance when it came to local brand “customisation”.
Having said that, the brand has given customers the opportunity to personalize the iconic Burberry trench coat in millions of ways so customers can walk away with a truly one of a kind product. Called Burberry Bespoke, the program allows customers to choose fabric, colour, embellishments and heritage details to create a trench coat that truly meets their personal specifications. Ms Ahrendts says while this option does not come cheaply, it is a great way to build engagement by allowing customers to create their own unique luxury product.
Several students wanted to know about Asia and her response contained a surprise: the China market is, of course, growing and there is a surge in interest from Southeast Asia. But just as important was the travelling customer – people from these markets who travel to London, New York and elsewhere and want to buy from Burberry’s flagship stores while they are there.
“We look not just at the domestic market in Mainland or Greater China, but we cater to our Chinese consumer wherever they shop,” she said. That includes targeting the Burberry trench at people from the tropics. “Luxury customers might live in warmer climates but they also travel,” she added.