Burberry is the latest in a long line of retailers to announce staff cuts, store closures, and a rethink of some of its core assumptions about how customers interact with the brand and how work gets done. As a forward-looking retailer with a proven track record of digital, supply chain, and operational innovation, Burberry is (in theory) well positioned to weather the economic downturn by making rapid, adaptive pivots as the world turns around it. As CEO Marco Gobbetti says, “We are sharpening our focus on product and making other organisational changes to increase our agility and generate structural savings that we will be able to reinvest into consumer-facing activities to further strengthen our luxury positioning.” There are some key lessons here, and not just for retailers. Burberry is:
- Reinforcing its brand values through transparent, ethical behaviors. Unlike many nonessential firms, Burberry didn’t take advantage of the UK government’s furlough scheme. Instead, it kept its employees in full-time employment, transformed its West Yorkshire factory to produce PPE (that’s what you can achieve when you invest in market-leading supply chain flexibility), and its directors took a 20% pay cut to donate money to COVID-19- related charities.
- Rethinking customer experiences. Burberry has been at the forefront of digital luxury for a decade. While half-year sales are down significantly year-on-year, Burberry’s eCommerce growth of 22% shows that its customers are more than comfortable dropping a cool grand on a trench coat they’ve never tried on. As stores begin to reopen, Burberry must continue the work it pioneered with the launch of its Regent Street flagship store and reimagine its customer experiences not as single channels, but as blended physical/digital journeys.
- Rethinking work. One of the key lessons many firms have learned from the pandemic is that old assumptions about 9-to-5 offices belong in the days of Mad Men. Burberry may be slowly embracing a future of remote, digital work, but that’s just step one on an inevitable journey for any modern firm. As finance director Julie Brown outlines, “We are anticipating some changes. Having had a good experience of working from home does allow us to make relatively minor changes to our office footprint.”
- Focusing capital investments on resilience and adaptability, not asset ownership. Challenging traditional thinking on store portfolios, factories, supply chains, and the nature and role of office spaces upends firms’ assumptions on how they allocate capital. As Burberry faces into an adaptive future, like many firms, it will need to rethink its physical assets, as increasingly, in a flexible, digital, on-demand economy, owning factories, warehouses, and prestige office spaces looks like a burden, not an asset.
But what does this mean for your firm?
Since the beginning of the pandemic, Forrester has been running rapid cycles of consumer, employee, and executive research to help firms understand how the pandemic is impacting workers, consumers, investment strategies, and B2B relationships. We’ve published a range of forward-looking research on a range of topics and in our latest report The New, Unstable Normal: How COVID-19 Will Change Business And Technology Forever. We look out over the next five years to examine how consumers’ values will shift, how firms need to rethink engagement to focus on creating digital experiences, how work will change, and how the firms that thrive will do so by becoming resilient and adaptable. Use it to build your recovery strategy.