Burberry’s Big-Time Bet on Beauty

LONDON, United Kingdom — Today, in its biggest beauty launch to date, Burberry is set to debut its newest women’s fragrance, My Burberry. Developed by chief executive and chief creative officer Christopher Bailey in collaboration with the famous perfumer Francis Kurkdjian, the scent is inspired by “a London garden after the rain” and named after the “affectionate way in which people refer to their Burberry trench coat,” according to the company. To accompany the launch of My Burberry, the brand is also unveiling a trench-inspired colour makeup collection, developed in conjunction with makeup artist Wendy Rowe.

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My Burberry comes hand-wrapped in a ribbon made of the same gabardine used in the company’s trench coats; consumers will also be able to customise the bottles with their initials. And as part of the launch, in London’s Piccadilly Circus and Covent Garden, as well as New York’s Meatpacking District, fans with smartphones will be able to visit MyBurberry.com and submit their initials to see them writ large on a My Burberry bottle displayed on mega-sized digital billboards. Key retail partners, like Sephora on the Champs-Élysées and London’s Selfridges, will offer customers a similar experience, while, online, interactive advertising units will allow users to monogram their own virtual bottles and share them on social platforms. In the UK, registered subscribers to Channel 4’s on-demand service 4OD will also see a personalised My Burberry commercial, featured a bottle emblazoned with their name.The multi-pronged launch will incorporate several of the brand’s key marketing pillars, including iconic British models and British music. The campaign, lensed by Mario Testino, features Kate Moss and Cara Delevingne, appearing together in marketing for the first time, while British musicians Jeff Beck and Joss Stone’s rendition of “I Put a Spell on You” provides the soundtrack. But it’s the sophisticated digital customisation elements that really set the launch apart.

“It’s incredibly comprehensive and radical in its approach,” said Burberry chief operating officer John Smith of the launch. It’s also indicative of the significant opportunity the company sees in beauty. Indeed, the British fashion house is not shy about its ambitions to compete in the lucrative category with the likes of Chanel, Armani and Dior.

In October 2012, Burberry announced that it would end its 20-year-old beauty license with Interparfums and bring its beauty business in-house. It took full control of the category in April 2013. “Our vision is to be a top ten player in luxury fragrance,” said Smith. “The beauty industry is a £60 billion (about $100 million) business globally and we were under-penetrated.”

Complete ownership of the business has allowed the company to fully integrate beauty into Burberry’s internal marketing machine. Unlike some luxury houses, which split their beauty and fashion businesses, Burberry refers to beauty as its “fifth product division” after accessories, womenswear, menswear and childrenswear. “We have much greater brand control in terms of the marketing message and how the product is positioned,” said Smith.

In the first year of ownership, beauty brought in £144.1 million (about $239.5 million) in wholesale revenue and £7.2 million in direct retail sales. Much of the year was spent hiring about 140 people to lead the beauty division — from creatives to supply chain managers — and getting to know the roughly 130 suppliers that support the business. “We were working with distributors to elevate the look and also to elevate the existing points of sales,” said Smith. (He also noted that there were “possibly too many points of sales” and that the company would be adjusting its mix of retail partners. Notably, Burberry has recently formed a high-profile partnership with Internet giant Amazon).

Looking ahead, Smith is keen to tap into the “$50 billion” travel retail market, of which he says the company currently owns less than 1 percent. Also in the cards are more of the company’s Beauty Box stores. Launched in December 2013 in Covent Garden, Burberry’s first Beauty Box acts as a sort of testing ground for “everything from the shoulder up,” selling makeup, fragrance and nail polish, as well as personalised gift boxes and certain accessories, such as scarves. Burberry plans to roll out several more of these stores, starting with South Korea.

In the near future, Smith also envisions online beauty orders being delivered directly to a consumer’s GPS coordinates, instead of a fixed address. “We want to be able to deliver to people wherever they are, even if they’re on the move,” he said. “It’s not tomorrow, but it’s coming soon.”

But nothing has been ballyhooed more than the company’s expected 2015 entrance into skincare. Smith warned that it would take time and declined to offer a specific launch date, although, on the company’s earnings calls, he has previously predicted a launch in late 2015. “We are exploring it,” he said. “Fragrance is driven by image, makeup is driven by improvement, and skincare is driven by loyalty. We know that we need all three, but it’s complicated. We’re currently talking to partners who might work for us.”

Colour makeup is also a priority. The category currently comprise only three percent of the company’s beauty sales. (Fragrance makes up the other 97 percent.) But mini-collections that support bigger marketing initiatives — like the trench-inspired collection that was developed alongside My Burberry — is what Smith has in mind. And just as Chanel develops colour palettes to coincide with each collection, Bailey does something similar for his runway shows. “There is a deliberate link between colour and the rest of the fashion business,” Smith said.

Indeed, the big idea seems to be to connect each category as strongly as possible under one unified umbrella. Smith noted that when the company launched Brit Rhythm, a men’s fragrance, in September 2013, the accompanying capsule collection of leather jackets and other fashion items sold out. Of course, it’s all tied together by Burberry’s digital activity, which is now as much a part of its brand DNA as that iconic trench, not to mention a powerful sales and marketing channel. “We want to sell a hell of a lot more product,” Smith said. “And we presume that a significant percent of that will be digitally.”

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