Comparative Shopping Report14039238

15th December 2014

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Contents

Introduction

Burberry Profile

The Luxury Market

Aquascutum Market

The Consumer

Product Comparison

Recommendations

Conclusion

References

Bibliography

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Introduction

This report will look at Burberry as a competitive retailer and how successful it

is, giving possible recommendations to increase profitability. In this report

Burberry shall be compared to Aquascutum, another British luxury fashion

house, in terms of product, competitiveness, marketing strategies, background

and consumer. This shall in turn review how effective Burberry’s marketing

strategies are and how well the company performs overall. By looking into the

history of both Burberry and Aquascutum it is clear to see the similarities in

their company blueprints, it is because of the comparable history between both

companies that Aquascutum has been chosen to compare with Burberry in this

report. “To anyone with even a passing interest in the industry, the fact that both

Burberry and Aquascutum are famous for their trenchcoats and heritage status

will not have gone unnoticed. So why should one blossom and the other wither?

It's to do with hard times, of course, but also with marketing and vision.” (The

Guardian, 2012) This difference in success shall also be divulged within the

report, supported by the marketing research into journals, books and online

sources conducted by the author.

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Burberry Profile

Thomas Burberry founded Burberry in 1856 in Basingstoke, England when he

opened a store selling men's outerwear. The reputation of the company was

enhanced through Burberry's development of “gabardine”, a fabric that was

resistant to tearing; was weatherproof but was also breathable (Burberry, 2002,

cited in Emerald 2004)

The marketing strategies Burberry employs weren’t always so successful, for

example the financial year ending 31 March 1998, Burberry saw its annual

profits drop from £62m to £25m, leading financial analysts to describe it as “an

outdated business with a fashion cachet of almost zero” (Finch and May, 1998,

cited in Emerald 2004) This could be due to the ‘chav’ branding of the 90s where

Burberry was seen as undesirable and cheap to the market often associated with

the visibility of the classic check print on the products and the well known image

of Danniella Westbrook donning the Burberry check head to toe.

However, from 1997, at the instigation of a newly appointed chief executive,

Rose Marie Bravo (Menkes, 2002, cited in Emerald 2004) Burberry managed to

remove the check print from all but 10% of its products in order to remove the

“chav” status the brand became linked with. This radical re-alignment of

Burberry’s business model has proved genius and as a result, Burberry has

enjoyed significant improvements in its business performance (Menkes, 2002,

cited in Emerald 2004).

Burberry now has a strong use of the marketing mix which uses the seven Ps to

aid the profitability of their brand. They stand firmly within the high-end luxury

market, with their target customer falling the A and B classification of the

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National Readership Survey (NRS, 2014). It is defined by the exclusivity and

rarity of the products, limited sizing and limited production on each garment.

With the products being largely inaccessible to the wider market, their more

affordable pieces such as accessories, perfume and cosmetics are extremely

successful and appeal to a larger consumer base allowing the C1, C2 and even D

classifications of consumers to buy into the brand and feel as though they have

become part of the Burberry family by owning a small piece of the brand.

Burberry, although being a heritage company of traditions and British history,

have opposed this within their promotional strategies, using a variety of

technological advances to target their consumers directly through the use of

their advertisements, collaborations, websites, personalization services and

interactive stores. The brand openly admits that it has become as much a media

content company as a design company, because in the words of Christopher

Bailey "it's part of the overall experience". (The Guardian, 2013)

Their flagship store on London’s Regent Street is the epitome of technological

innovation as well as customer service and excellent quality. In 2013 Burberry

added built-in technology to its runway Prorsum collection. Alongside the ability

to have your name engraved on a metal coat tag or bag plate, the pieces now

contain built in microchips which when scanned with a smartphone reveal the

design and manufacturing process of the piece. The microchip also interacts with

Burberry’s flagship Regent Street store allowing users to stand in front of screen

and a personalised video will be displayed. (Mintel, 2014) This form of customer

interaction is not only creative, it is also intriguing and truly impressive for a

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customer to be involved with, it gives them a sense of personalization and

exclusivity tailored to the individual. This very personalised approach is able to

work where a brand is uniquely differentiated in its products and has a loyal

customer base willing to buy the distinctive range of life style products

produced, (Jackson and Shaw, 2011:40) and offering monogramming services

not only increases the sense of involving the consumers within the brand but it

marks their products with a uniqueness that the customer buys into that they

would struggle to get anywhere else, as well as offering this monogramming

service on the higher end product, they continue it down through to their

accessories and cosmetics and most recently their ‘My Burberry’ perfume on

which customers initials can be engraved onto the bottle for free of charge. The

idea of the perfume being named “My Burberry’ with the allowance of

personalization markets that it is in fact “My Burberry” and no one else’s.

Christopher Bailey, Chief Creative and Chief Executive Officer, commented:

‘Looking ahead, in a more difficult external environment, we continue to focus on

the things that we can control. Through authentic products, great customer

experiences and a culture of continuous improvement and innovation, we

remain confident of Burberry's sustained outperformance.’ (Mintel, 2014)

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The Luxury Market

Luxury has been described as the state of great comfort and extravagant living,

also an inessential item which is expensive or difficult to obtain (Oxford English

Dictionary, 2014). By using this definition we are able to class Burberry and

Aquascutum under this market segment with their products being that of an

‘investment piece’ rather than a necessity, when we are buying luxury goods we

are sometimes buying a little bit of heritage; the DNA of the brand & therefore

the price is often irrelevant. (Grose, 2012:144)

Verdict predicts that the Luxury market will grow within the next 6 years,

especially with online purchasing, “we expect more consumers to shift spend

online, driving the online luxury market to reach €49.7bn by 2020.” (Verdict,

2014) The growth of luxury is an opportunity for brands such as Burberry and

Aquascutum to excel their marketing strategies to ensure an increase in sales, it

could be suggested that although luxury brands are thought of as exclusive and

unattainable, Burberry could extend its consumer base to a wider more varied

audience. This could aided by the rising passenger numbers and consumer

wealth that are luring designer brands into the airports, allowing for global

brand recognition and building a larger, more varied customer base, Burberry

have reported that they will be investing in travel retail. (Verdict, 2014)

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Aquascutum Profile

Aquascutum draws on its heritage combining quality and fine craftsmanship

with innovation and exquisite design to create its own quintessentially British

style that offers luxury, attention to detail and authenticity. (Aquascutum.co.uk,

2014)

In common with Burberry, Aquascutum was founded in the 19th Century and

renowned for its coats but their similarities didn’t stop there. With their

timelines almost mirroring each other from the trench coat to creating the first

waterproof textile, being known for mens outerwear, iconic street locations,

developing fabrics for extreme explorers to the iconic check print, it is not

uncommon to compare these two British heritage labels. During the late 90s and

early 2000s, similar to Burberry, Aquascutum underwent a major decline in

terms of reputation as a ‘chav’ brand. There is a fascination among football

hooligans with designer labels such as Lacoste, Burberry and Aquascutum (BBC

News.co.uk, 2002) however, as international megabrand Burberry announced a

rise of 17.1 per cent in its revenues, Aquascutum – whose apparel once warmed

the burly shoulders of Winston Churchill – has entered administration. (The

Independent, 2012)

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The Consumer

With the Luxury market consumer sitting in the A, B and C1 categories, the

expectations of product are high. Exquisite hand crafted products are a must for

the highly priced label attached to them, however most luxury brands also have

lower end product to sell to the mass market such as accessories and perfume

that the lower earning consumer can buy into the brand and feel a part of the

brand community.

The consumer, in general is becoming a lot more savvy, they will now look and

products and compare them themselves to get a better deal, therefore companies

are in constant competition with each other. As the double dip recession is

coming to a close, the consumer now has more money to spend, although

through the fears brought on by the recession people are now becoming a lot

more wary of where they invest their money and are less prone to excessive

spending. The consumer is also now becoming larger as obesity levels are

growing, this could be a market for Burberry to expand into however it could

also damage their “exclusivity” appeal which is the idea that the less the amount

of people who can obtain luxury goods, the more appealing it will be.

Convenience is now playing a big factor in consumer buying, supermarkets are

becoming high competitors now as

they are the convenient way for most

working people to buy their clothes.

The graph here (Mintel.com, 2014)

shows Tesco and ASDA to be higher

than retailers such as H&M and

Topshop in terms of where women

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buy their clothes. However, the rise of supermarkets wont affect Burberry as

such, this idea of “convenience” could be used in technology, allowing the

customer to shop more easily through their phones – this could be an area that

Burberry could branch into as they do not yet have a phone/tablet application.

Product Comparison

In order to create an effective product comparison, hierarchies have been

created in order to narrow down each company’s products into one specific

group. The chosen product sector for the comparative grids is coats, this was

chosen due to the fact that both companies are renowned for their Trench coats

and that the coat - albeit the trench coat - is the product which launched the

extensive luxury success of both Burberry and Aquascutum. It is evident through

these hierarchies that Burberry’s product sectors are wider and more varied

than Aquascutums, this is due to the innovative marketing strategies that

Burberry launched to nurture the company into overwhelming success and

Aquascutum’s slow decline through the years, the last set of figures filed at

Companies House showed a loss of around £10m on sales of £28m for the year to

February 2010. (Drapers.com, 2012)

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Each company have created a similar set of styled coats to sell to their consumer

at a luxury price. The comparative grids below shall highlight the comparable

and differing areas of each chosen product. The coats that have been chosen are

similar in price and style to portray how closely these two companies sit next to

each other in the luxury market in terms of product.

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All of the above products show that the coats from both companies are similar in

more ways than one, price, composition, colour-ways, sizes and the overall look

of the product, however Burberry have surpassed Aquascutum in terms of sales

and popularity. By the look of the images that have been taken off the company

websites it is clear to see the difference, Burberry’s images appear warming and

more relaxed whereas Aquascutum have used a bright white light, which does

highlight the better product features, yet manages to make the product look less

appealing on the model and to the customer. Luxury retailers online have more

to rely on than middle or mass market as customers are paying a lot of money for

something that they cannot touch, try on or see in person, so the whole internet

sales experience has to be perfect and here just the look of Burberrys products

are more appealing than Aquascutums, something as little as the lighting on the

photograph can be imperative when the customer is willing to pay a vast amount

of money, they want to ensure they are getting the product they see and want.

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Recommendations

With Burberry being such a successful international brand that seems to be

taking on every possible opportunity in order to ensure profitability, it is hard to

suggest where they could go next. However, there is one recommendation that

could prove a winner, with their main target audience being women they have

slightly strayed away from Burberry’s original concept, which was mens

outerwear garments and did not branch into ladies wear until the 1920s

(Burberry.co.uk, 2014) and even then it was still mainly a producer of outerwear.

Women’s wear has far overtaken mens wear in terms of profitability, but the

men’s wear market is slowly creeping back up and could prove highly profitable

if Burberry were to extend and nurture further their men’s wear product sectors.

(Mintel.com,2014)

It is clear from the graph above, retrieved from Mintel, that the mens wear

market area is forecast to grow significantly, with even the worst case scenario

resulting in possible profits.

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So far, Burberry is in the early stages of taking advantage of the significant

growth prospects within the menswear category, having only fully integrated

menswear two years ago and Burberry introduced its first menswear-only store

in 2012, providing male consumers with an environment more suited to their

shopping habits. (Verdict.com, 2014) The graph below shows how Burberry’s

menswear sector has increases in profits and the percentage of year on year

change from 2009-2014.

(Verdict.com, 2014)

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Conclusion

Looking at Burberry from a competitive buying analysis it is clear to see their

vast improvements on their Business model which has upgraded their status to

an international super-brand that has so far surpassed its competitors in terms

of technological innovation and creating a personal shopping experience for

their target consumer without neglecting their secondary consumer products

that create more turnover, such as accessories and cosmetics, that have seen a

year on year rise since 2009

(Verdict.com, 2014)

Although Burberry are already branching into menswear, they could create

further profits by opening more stand alone mens clothing stores and creating

the same personal experience for men as they already do for women, with a

more comfortable shopping atmosphere.

Overall, the question of “How competitive are Burberry for AW14/15?” has been

answered within this report to show that Burberry are a highly competitive

brand with a strong heritage ideal, bringing their heritage into their modern

customer by advancing in the opportunities in technological innovation. They

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have wildy surpassed their competition Aquascutum, yet there are always new

ways to reinvigorate customers, recommendations have been made and through

research into journals, books and online sources, it is clear to see that Burberry

are underway with excelling their brand further and boosting their profits.

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Reference Page

Aquascutum.com, (2014). British Luxury Fashion Brand | Heritage Fashion Since

1851 | Aquascutum. [online] Available at: http://www.aquascutum.com

[Accessed 7 Dec. 2014].

BBC News.co.uk (2002). BBC NEWS | Programmes | Hooligans | Undercover with

'the firm'. [online] Available at:

http://news.bbc.co.uk/1/hi/programmes/hooligans/1979909.stm [Accessed 11

Dec. 2014].

Burberry.com (2014). Burberry - Iconic British Luxury Brand Est. 1856. [online]

Uk.burberry.com. Available at: http://uk.burberry.com [Accessed 7 Dec. 2014].

Drapers.com (2012) Aquascutum up for sale. Available at:

http://www.drapersonline.com/news/aquascutum-up-for-sale/5035371.article

#.VI3_ykv-BuY (Accessed: 14 December 2014).

Emerald.com, (2004) "The Burberry business model: creating an international

luxury fashion brand" Christopher M. Moore, Grete Birtwistle, (2004,

International Journal of Retail & Distribution Management, Vol. 32 Iss: 8, pp.412

– 422 [Accessed 6 Dec. 2014]

The Guardian (2013) ‘How Burberry’s digital strategy is boosting brand value’,

11 July. Available at: http://www.theguardian.com/media-network/partner-

zone-brand-union/burberry-digital-strategy-brand (Accessed: 14 December

2014).

The Guardian (2012). Tale of two macs: Aquascutum goes bust while Burberry

booms. [online] the Guardian. Available at:

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http://www.theguardian.com/fashion/shortcuts/2012/apr/18/macs-

aquascutum-bust-burberry-booms [Accessed 6 Dec. 2014].

Grose, V. (2012). Concept to customer. Lausanne, Switzerland: AVA Pub.

The Independent, (2012). Trench warfare: Burberry vs Aquascutum. [online]

Available at: http://www.independent.co.uk/news/business/analysis-and-

features/trench-warfare-burberry-vs-aquascutum-7654738.html [Accessed 11

Dec. 2014].

Jackson, T. and Shaw, D. (2001:40). Mastering fashion buying and merchandising

management. Basingstoke: Macmillan.

Mintel.com, (2014) Menswear – UK – March 2014 Executive Summary| Mintel

[online] Available at: http://www.mintel.com [Accessed 6 Dec. 2014].

Mintel.com, (2014) Womenswear – The consumer, where do women buy clothes |

Mintel [online] Available at: http://www.mintel.com [Accessed 6 Dec. 2014].

NRS.co.uk, (2014). Social Grade | National Readership Survey. [online] Available

at: http://www.nrs.co.uk/nrs-print/lifestyle-and-classification-data/social-

grade/ [Accessed 7 Dec. 2014].

Verdict.com, (2014). Burberry | Verdict Retail. [online] Available at:

http://www.verdictretail.com

https://service.verdictretail.com/verdict/incoming/article41340.ece/

BINARY/w520norat/Burberry+accessories

https://service.verdictretail.com/verdict/incoming/article41340.ece/

BINARY/w520norat/Burberry+clothing

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Appendix

Easey, M. (2009). Fashion marketing. Oxford: Wiley-Blackwell.

Goworek, H. (2007). Fashion buying. Oxford: Blackwell Pub.

Rosenau, J. and Wilson, D. (2006). Apparel merchandising. New York: Fairchild Publications.

Slack, N., Brandon-Jones, A. and Johnston, R. (n.d.). Operations management.

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