BURBERRY – inconsistent retail strategy may lead to long term negative consequences
Ekaterinburg, Warsaw, Cairo, Kiev and Doha are some of the major international luxury markets where British Group BURBERRY is under-represented, despite market potential. All three boutiques are managed in franchising by local or regional franchisees.
While entering a market at an early stage might have the ”pioneering advantages”, there could also be long term negative effects, from a financial as well as brand awareness / positioning point of view. Traditional ”early entrants” Hugo Boss or Escada have all encoutered problems in the long term, leading to store closures and changes in local partners / franchisees.
The ”older” interior design concept of some Burberry stores (Ekaterinburg, Warsaw, Kiev) could also be a turn off for well travelled consumers who are expecting the same experience they find in the latest stores (London, Paris etc).
With the possibility that Burberry’s ”democratic luxury” positioning may only last for another few years depending on worlwide economical conditions, the brand could greatly benefit from a more attentive choice of local partners as well as a more sensible choice of timing for entering a market, based on research, rather than early entry perks.
The most recent relevant examples are provided by two similar markets in Central & Eastern Europe, Serbia, where Burberry opted for opening (2010) a franchised store and wholesale distribution with the most experienced fashion retailer in the region and Romania, where Burberry has opted for an inexperienced local partner (franchisee), with operations in wellness equipment, energy and IT.