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Looking forward: Burberry’s re-branding in 2018

While reading about Rose Marie Bravo’s efforts to position the Burberry brand in the early 2000s, I couldn’t help but wonder where Burberry sits today. Bravo carefully chose to place Burberry in between labels such as Polo Ralph Lauren and Giorgio Armani, maintaining it’s luxury status while attracting a much broader customer base. Today, Burberry and other luxury brands are facing an entirely different competitive landscape. With the rise of fast fashion, what are Burberry’s options for brand positioning? 

In my view, the main question facing luxury brands is to compete or not to compete.

To compete...?

Competing with fast fashion brands (such as H&M and Zara) would require an overhaul of their design, manufacturing, and distribution processes. Luxury brands which typically spend months designing lines and have set release dates each season, while fast fashion brands are able to rapidly churn out new designs and get them on the racks in front of consumers. 

So why would a luxury brand compete with this? Because they believe this trend is long lasting and competing is the only way to survive. 

...Or not to compete?

Given the rise of fast fashion, why wouldn’t a luxury brand want to compete directly? Because they believe this is just a fad that will pass as consumer preferences change. There is some evidence that consumers are starting to care more about sustainability and therefore are looking for longer lasting, high quality products. This poses a threat to fast fashion and may even boost sales at luxury brands if they play their cards right.

Burberry’s move

In 2018, Burberry released a new logo and monogram. This new logo (seen below) is modern, mimics the simplicity of younger brands, and removes the historical symbols of Burberry (e.g. the knight on a horse). This could be a signal that Burberry is looking to compete (at least at some level) with younger, faster fashion brands. We’ll have to see if this new logo is followed by faster design releases and reduction in clothing quality / price.

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What did Segway do wrong?

In 2001, Segways went on sale for the first time. They seemed like an exciting new way for people to move around. But, by 2007 Segway had only hit ~1% of its sales target.

Fast forward to 2018 and people are riding electric dockless scooters (not too dissimilar to Segways) all over the world. How did the electric scooter industry get right what Segway couldn’t? Let’s look at the differences between the two products using Rogers’ Five Factors. 

Relative Advantage

Segways and electric scooters both help people get around. They allow people to get farther, faster than walking. However, the relative advantage of Segways was not so clear when they first came out. While they certainly could transport people farther and faster, they were incredibly expensive, hard to store, and did not have clear space on the road or sidewalk. Electric scooters on the other hand are cheap (especially if shared), easy to store, and can be used in bike lanes. 

Compatibility

The mere existence of the Segway improved the compatibility of the electric scooter. Before the Segway, there were few examples of motorized transportation outside of cars and motorcycles. Although, the Segway didn’t ever gain popularity it possibly primed consumers’ to the idea that motorized transportation could be used to replace walking in the future. 

Complexity

In terms of complexity, safety is really where Segway went wrong. While it may be easy to learn how to ride a Segway, there was lots of press around the danger of doing so which certainly deterred riders. One notorious example was in 2010 when the CEO of Segway (Jimi Heselden) lost control of his Segway, fell off a cliff, and did not survive. 

Trialability

This is the category where electric scooters really win. Electric scooter companies benefited from recent business model innovations that made consumers more comfortable sharing mobiles (e.g. ride shares and bike shares). Leveraging the same business model, consumers are able to try electric scooters without ever purchasing the equipment. While this business model certainly could have worked for Segway, the groundwork for consumer acceptance had not yet been laid. 

Observability

Perhaps the most commonly quoted reason why Segways failed was because they were nerdy. Segways were never able to establish a cool brand image. Thus, they’ve been reserved for mall cops and city tours. On the flipside, electric scooters established a very different brand image. They can be seen everywhere and are used by all kinds of consumers (across age categories, gender, profession, etc.) which makes their value highly observable.

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Establishing a global wine brand: Lesson’s from Australia & New Zealand

In 2006, Concha y Toro faced a critical juncture. Should they focus on extending their brand into more profitable premium segments or leverage their existing prestige to compete in the lower-end segments? A similar comparison can be seen in how 2 well-known wine brands, one from New Zealand and one from Australia, elected to expand their brands globally.

Oyster Bay

Oyster Bay is a relatively well-known brand exported from New Zealand. They produce numerous types of wine (Chardonnay, Sauvignon Blanc, etc.) and have established an image of being elegant and assertive at a mid-range price. 

What I didn’t realize about Oyster Bay (until looking into it this afternoon) is that it is a sub-brand of a Delegat Group. Delegat Group currently owns 3 brands within Australia and New Zealand and elects to market these brands separately. This has enabled them to create a distinct brand image for Oyster Bay that is not influenced by the other brands they sell. This approach has been successful in many different industries, most notably in Toyota’s creation of the Lexus brand. 

Concha y Toro could certainly take this approach, rolling back their marketing of the Concha y Toro name and instead creating sub-brands which allow them to experiment with different branding strategies without impacting the success of their existing products. 

Yellow Tail

Yellow Tail is a very well-known brand exports from Australia. They produce many types of wine, focus on simplicity (removing complex wine jargon from the bottles, as well as, removing tannins and acids from their product), and have created an brand known for its affordability. 

To expand globally, Yellow Tail doubled down on their brand name. All of their varieties are packaged similarly and therefore can easily be associated with one another. This certainly aided Yellow Tail in growing their brand awareness, particularly overseas where consumer may not be as knowledgeable about Australian wines. 

Concha y Toro could also take this approach, doubling down on their brand name given the relatively low awareness of Chilean wines globally. It would almost certainly solidify their placement in the basic wines category, but could accelerate their export business substantially.  

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Using experimentation to understand changing consumer behavior

As digital technologies have increasingly infiltrated the consumer life cycle, our understanding of how consumers will behave has changed. Dilip Soman, Melanie Kim, and Jessica An detail these increasingly important consumer behaviors and the contexts within which they occurs in their piece “Consumer Behaviour Online: A Playbook Emerges.” This piece made me think about how companies uncovered these behavioral changes in the first place and reminded me of the story of Rent The Runway (as told by Nathan Furr and Jeff Dyer in The Innovator’s Method. 

Jenn Hyman came up with the idea of renting designer dresses online for special occasions in 2008. At its nascence, this idea still had many gaps. Jenn had yet to answer many questions like, “Will women rent a dress if it is available at 1/10 the retail price?” “Will women who rent these dresses return them in good condition?” “Are women willing to rent dresses that they haven’t tried on?” Rather than run surveys or speak with experts, Jenn decided to run experiments. 

She started small, purchasing 130 designer dresses and renting them to students at her University. Once she determined women were willing rent designer dresses and, for the most part, returned them in good condition, she moved on to the next big question. Will women rent a dress they cannot see in person or try on? This was a pivotal question to answer for the future of Rent The Runway. If women weren’t willing to do this, she would have had to stick to a brick-and-mortar model, severely limiting the scale her business could reach. 

To answer this question, she ran another simple experiment. She bought more dresses, took photos of them, and made them available to 1,000 women in NYC. Success from this initial, scrappy pilot showed that women indeed were willing to adapt their standard consumption behavior to fit this new model. This success story underscores for me the importance of rapid experimentation with new technologies to better understand consumer behaviors. 

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Black & Decker: Segmenting customers using colors

How can companies compete across customer segments who have different wants and needs for the same set of products?

Black & Decker (B&D) faced this issue in 1991. B&D led the pack in brand recognition among power tool producers and was among the most powerful brand names globally. B&D held significant market share in two out of the three power tool customer segments: 

45% share of “Consumers” (non-professional power tool user who primarily bought tools at mass merchants) 

20% share of “Professional-Industrial” (primarily commercial contractors working on large projects and company assembly lines). 

B&D struggled to gain market share among Professional-Tradesmen, including electricians, plumbers, roofers, etc. working in residential construction. B&D only held 9% of the market in this segment. 

The primary reason B&D struggled to capture the Professional-Tradesmen segment was because of the success they enjoyed among Consumers. Consumers preferred B&D products because of their brand recognition and broad distribution. The Professional-Tradesmen, however, felt they needed to distinguish themselves from the less skilled Consumer and required more professional tools than an at-home handy (wo)man. 

In order to differentiate products created for at-home use from products created for more professional use, B&D considered different color schemes--black for Consumer tools and bold yellow for Professional tools. There are numerous examples of other companies that used this tool to target multiple, differing customer segments. One clear example is Gillette.

Gillette has successfully created two distinguished brands, one for men’s razors and one for women’s razors. Their men’s razors are branded Gillette and use bold dark colors like navy blue, deep orange, and black. On the flip side, their women’s razors are branded Venus (by Gillette) and use softer pastel colors like pink, teal, and lavender. Although these two sub-brands are often placed right next to each other on the shelf, they could not look less related. 

This approach (which B&D considered and ultimately deployed) stood to really benefit B&D in growing their market share among Professional-Tradesmen. Similar to Gillette, they not only distinguished their products visibly through color, but also through sub-brand names, for example DeWalt.