Inquiry Project: Burberry Retail Industry Analysis and Recommendations

This report presents an inquiry-based project analyzing Burberry, a British luxury fashion brand, within the context of current retail industry trends. The report begins with an introduction to Burberry and an overview of relevant background information, including sustainable fashion practices, customer-centric strategies, and the impacts of Covid-19 and Brexit on the retail sector. A comprehensive analysis is conducted, utilizing SWOT and PESTEL frameworks to assess Burberry's strengths, weaknesses, opportunities, threats, and the political, economic, social, technological, environmental, and legal factors affecting the company. The report culminates in conclusions and recommendations, offering strategic insights for Burberry to maintain success and adapt to the evolving challenges of the fashion retail market, including repositioning the brand, updating product lines, and expanding its customer base. The report highlights the importance of digital channels and the need to address changing market trends and economic factors.

Inquiry Report

TABLE OF CONTENTS
INTRODUCTION...............................................................................................................4
BACKGROUND.................................................................................................................4
Sustainable fashion........................................................................................................4
Customer centricity........................................................................................................4
Covid-19 and Brexit........................................................................................................4
ANALYSIS.........................................................................................................................4
SWOT analysis..............................................................................................................4
PESTEL analysis...........................................................................................................4
CONCLUSION AND RECOMENDATIONS......................................................................4
APPENDIX.........................................................................................................................4
REFERENCES..................................................................................................................5
Books and Journals........................................................................................................5

INTRODUCTION
Burberry is a British fashion brand. The company has its headquarters in London,
England. They work as a luxury fashion house and designs and distributes clothing,
leather goods, accessories, fragrances and many more items related to this (HU, and
XIANG, 2019). They have moved to a high fashion market and introduced their own
kind of fabric exclusively for their brand. This report deals with some of the current
trends in the retail industry. There is an analysis done on the business model of the
company and their performance.
BACKGROUND
Sustainable fashion
British luxury brand Burberry is a part of sustainable luxury movement. The
fashion companies are launching new products which meet the criteria for sustainability
requirements. They are launching some new products which does not harm any form of
natural resources. This makes a great goal for the fashion industry. They have
introduced an environmental friendly collection which had its sole focus on the
implementing circular economy (Bae, 2019). These clothes were made from a special
innovative fabric known as Econyl, which made a sustainable way for designing and
producing. Econyl is a sustainable nylon material made after recycling the fishing nets
and industrial plastics. Fashion products made from the sustainable way are becoming
fashion classic while giving a new approach into the sustainable industry.
In addition to this many companies are producing fur by reusing leather scraps
with full support from the company and the development of sustainable materials.
Burberry has put its focus on positioning itself as a sustainable and environmental
friendly brand. Many companies used to burn all the products which are left to avoid
selling them below their value. This made many people boycott against these
companies as they were destroying some of the important resources. After this many
fashion retail companies then started to donate what is left or to recycle them into
creating some other things. The company has also started a zero waste idea into the
industry which asks for packaging in the recyclable or biodegradable way.

Customer centricity
Customer centricity is very important as the business works depending on their
needs and demands. It can be challenging for many retail companies to handle with the
e-commerce and putting more investment in mobile wallets. Many top brands are
closing their stores to just go online. There are so ways to design a product and in retail
industry this focus must be on customer centric services and the experience they
receive when compare to the competitors. Many companies are using social media
platforms to generate a user generated feedbacks. Fashion retail companies must be
put less focus on the product they sell and more on the different touch points related to
the customer experience. These experiences are dependent on the layout of the store
and the fast delivering process with helpful services. Customer are in today’s world are
no longer in need of entering a store to buy the product. The purpose of the store is
changed now, shopping must be convenient like buying from e-commerce or
entertaining which the online channels cannot offer. It was the first retail company to
allow their customers to buy online and pick up in the store. This helped many digital
customers when any other retailer is not giving this option (Olteanu, 2020). This strategy
was beneficial for them as well as made their customers happy and satisfied.
Covid-19 and Brexit
Same as the case for many retailers from all the industries all the other luxury
companies has also experienced a drop in their proceedings because of the Cobid-19
pandemic. The impositions of the lockdowns lead to stores not opening and not having
the chance of interacting with the potential customers. Although, the digital channels of
companies has helped the company a lot. So having solid investments in the digital
systems can lead to raise the use of their digital channels in the starting of the financial
year. Regardless of these digital channels many companies still had a fall in their profits
and is now recovering but is still dependent on the government regulation about the
Covid-19 in different locations. These challenges are making fashion retail industry to
adapt and find new ways to approach their customers.
All the UK retailers are trying to get back from the shock of Brexit, a potential exit
from the European Union. This has raised many concerns about border line delays,

changes in tariffs and leading to some shortages (Silvano, 2020). Companies in the top
ranks of the luxury brand are therefore having been under lots of pressure to achieve
the same. The effects of Brexit have lead to high value added tax for the retail
businesses. Brexit deal includes zero tariffs and zero quota trading systems for the
luxury products between EU and Britain. Fashion industry in UK will suffer from having
lack of garment workers and creative minds from the EU. Investing new channels will
the retail companies to gain back their profits.
ANALYSIS
SWOT analysis of Burberry
Strength: Burberry is a very popular brand. This British company has a large
network of their retail stores along with many wholesale and licensing channels all
around the world. It is one of the greatest fashion stores in UK which offers wide range
of products which includes clothing, fragrances, beauty products and many more. The
company has grand royal warrants by special people from the palace. It is a very
valuable company around the globe and owns to its legacy. The company excels in
doing a great publicity of the brand (Woodside, and Fine, 2019). Burberry has
collaborations ad association with many famous international celebrities which helps
them to reach out to their customers more effectively. The firm works with a large
employee base and has its presence in many different locations.
Weakness: The position of the company in the market is very high which makes
it accessible to the high street fashion and has low couture presence. Along with this the
company has to constantly face up the challenges dealing with cheap imitations. The
company in order to make in being a luxury brand has very high prices which limits its
products to only few customers and excluding a large set of population who cannot
afford Burberry’s basic product line. Many companies like Burberry are selling products
which include decor and furniture, unlike Burberry. One more weakness of Burberry is
that it has high turn over rates for their staff which decreases the efficiency of the
company.
Opportunities: Burberry has set their goals to become a luxury brand but
collaborating with other brands, Burberry can try to make clothes and fashion products

to be more affordable to some common people (Ozdamar-Ertekin, 2019). More
advertising and better marketing will help the company to reach larger fan base. For
such a well working brand, expanding on the global level can help it to grow all around
the world. More and better way of using ecommerce can help Burberry to reach out
many more potential customers and retain the existing ones. The nations and their
economies are developing which can be an opportunity for the Burberry to step into
wider market range and increase their sales.
Threat: Working on such bigger scale Burberry has to face many threats that can
harm their business. The company faces may threats on the competition basis from
other luxury brands in terms of pricing and availability. The industry where Burberry
works in the customers holds a higher bargaining power and low switching costs. This
intense competition in between the luxury brands can make the market share of
Burberry fall down. Burberry has to make sure their products are satisfying major
customer needs to win more market share and attain loyalty points from customer’s
side. Lastly, politics and economic stability of the country gives a negative influence on
the company.
PESTEL analysis of Burberry
Political factors: Burberry is a British brand which operates in many foreign
markets and considering the regulations and policies of that particular location becomes
a very important part in the operational process of the company (Handfield, Graham,
and Burns, 2020). The suppliers of the company are situated at different places world
wide which results in operations getting affected by the changing regulations and
policies. Burberry must consider political stability which can produce some bad effects
on the revenue of the company.
Economic factors: The 2008 recession and still its impacts on the UK economy
and produced a global economic crisis which worsen the next year. This slow down in
the economy has resulted negatively on the jobs for many years. Adding to this the
inflation rates are weakening in the market due to poor economy. Then the combined
effects of Brexit and Covid-19 have just decreased the profits of Burberry by a lot.

Buyers are decreasing their budget on spending at luxury items and more on the basic
entities.
Sociological factors: The brand is British based and the other than this the
social factors associated with Burberry are innovation and intuition (Mukendi, and et.al.,
2020). They have forms authentic outwear heritage along with focusing on the historic
icons such as trench coats. This brand is very popular in UK. While working in some
conservative markets is a bit challenging for the company.
Technological factors: This Company has focused its main attention on
achieving benefits from the digital source of channels such as the use of social media
for the growth of business. It has launched its new website to help the customers reach
out to them and shop on the online basis.
Environmental factors: Burberry has to face many obstacles to operate while
meeting all the environmental regulations which can be a bit expensive. It has found its
way into the sustainable fashion to work environmental friendly way.
Legal Factors: Burberry has many issues in the market replication of their
products and services. The company had to spend a lot for their official Burberry trade
mark and to protect the same. They have to keep their connection with the law and
enforcements to track their counterfeits.
From the questions asked from the customers of Burberry it can be analysed that the
company has a great reputation among the market. Customers are into buying the
products recycled from the old ones. They are happy with the company’s overall
performance but they are not finding more affordable option in the company which is
making them shift towards the competitive companies. There were no complaints
regarding the quality of the products sold by Burberry.
CONCLUSION AND RECOMENDATIONS
Burberry is a much known brand in the fashion retail industry. It is a British
company and is very popular in UK. The company is expanding their options into
producing more sustainable clothing and attracting young generations to invest in their
products. Burberry has to deal with many trends which includes the expansion of their
digital channels and the markets being a disaster due to Covid-19 pandemic and Brexit.

The major constrains the company is facing are the current and changing market
trends, low income of the population which makes them not being able to afford
Burberry products. Adding to this the company has many competitors in the market.
These obstacles can be overcome by firstly, repositioning the brand. The aim should be
attracting the young people while maintain the current customer base. Updating the line
of products with changing trends can be yet another option. Keeping the prices lower for
children’s section and young adults will attract them more and will form a perfect way to
inundate the brand.
Along with this the company should not push away their existing customers who
are loyal to the brand and they will remain stable regardless of how they responded.
Burberry must develop a well established technique to reach out to a wide customer
base which will make the brand more successful. The company can introduce their
largest product line in their flagship stores. Burberry must expand more in terms of
opening more stores in different locations which has their targeted audience. Burberry
has to built their brand considering their past, present and future customers and the way
to do this is by changing the line of products and offering more choices for their world of
customers. The company must try to develop programs helping in more brand
awareness and reaching out to maximum potential customers. They can try sending
free samples to some people and publishing their beauty products. The company must
do some events and serve snacks and champagnes to make the reputation of the
company stay at being classy and associated with the glamour world.
APPENDIX
Q. 1) Are you aware that Burberry is fashion retail company?
 Yes
 No
 Not sure
Q. 2) What do think about the quality of the products from Burberry?
 Average

 High
 Not sure
Q. 3) Do you own any Burberry product?
 Yes
 No
 Not sure
Q. 4) What do you think about the performance of Burberry in the market?
 Good
 Bad
 Not sure

REFERENCES
Books and Journals
Bae, S.Y., 2019. Luxury, sustainability and the future-The case study of Burberry. The
Research Journal of the Costume Culture, 27(1), pp.64-71.
Handfield, R.B., Graham, G. and Burns, L., 2020. Corona virus, tariffs, trade wars and
supply chain evolutionary design. International Journal of Operations &
Production Management.
HU, X.Q. and XIANG, C., 2019. Business Analysis and Valuation on the Burberry
Group. DEStech Transactions on Economics, Business and Management,
(ssemr).
Mukendi, and et.al., 2020. Sustainable fashion: current and future research
directions. European Journal of Marketing.
Olteanu, L., 2020. Rebranding strategies and their boomerang effect—The curious case
of Burberry. The Journal of World Intellectual Property, 23(5-6), pp.777-797.
Ozdamar-Ertekin, Z., 2019. Can Luxury Fashion Provide a Roadmap for
Sustainability?. Markets, Globalization & Development Review, 4(1).
Silvano, M.D.C.L.F., 2020. Playing against the rules: how a digital strategy can enhance
a luxury business: the case of Burberry (Doctoral dissertation).
Woodside, A.G. and Fine, M.B., 2019. Sustainable fashion themes in luxury brand
storytelling: The sustainability fashion research grid. Journal of Global Fashion
Marketing, 10(2), pp.111-128.