British fashion brand Burberry is one of the most recognized luxury clothes labels in the world. Starting in 2006, the company aimed to reinvent itself as an “end to end” digital enterprise. Its strategy was to use Big Data and Artificial Intelligence (AI) to boost sales and customer satisfaction.
It does this by asking customers to voluntarily share data through a number of loyalty and reward programs. This information is used to offer personalized recommendations, online and in store. When an identified customer enters a store, sales assistants use tablets to offer buying suggestions based on their customers’ purchase history as well as their social media activity.If Burberry knows that a customer has recently bought a particular coat, for example, then assistants may be encouraged by the app to show them a handbag which is popular with other buyers of the coat.
Products in their 500 stores spread across 50 countries are also fitted with RFID tags which can communicate with shoppers’ mobiles, giving information about how items were produced or recommendations on how they can be worn or used.
This usage of technology and tactics usually confined to online retail in a “bricks and mortar” setting prompted then CEO Angela Ahrendts (now SVP of retail at Apple) to state that “walking through our doors is just like walking into our website”, in 2014.
In 2015, the company announced that their investment in personalized customer management programs had resulted in a 50% increase in repeat custom.
One specific insight was the impact that product images had on sales of items that performed well in-store but not so well online. By creating new images for products where the data showed this was occurring, the company saw a 100% increase in sales for one particular bag.
Always keen to lead the pack rather than follow, Burberry is an earlier adopter of new technology and channels – as well as a vibrant following on social media, the brand was the first in the world to make use of Snapchat’s Snapcode feature. This allows customers to unlock information by scanning barcodes attached to their products.
It was also the first brand to launch its own dedicated channel on Apple Music, with the aim of connecting with customers by promoting British musical talent.
Another innovative engagement initiative allowed customers to appear alongside celebrities in their own personalized version of one of their TV ads, by filming themselves inside in-store booths.
Facebook “chatbots” were used for the first time last year, during London Fashion Week, to share information and updates on new products with customers through the social media site’s chat functions.
Since then the offering has been expanded to provide customer services, options for browsing and shopping new collections – and even the possibility to book an Uber ride directly to their store, simply by “chatting”.
All these initiatives show that the focus of Burberry’s tech transformation is clearly put on building personalized relationships with individual customers – taking techniques pioneered by online retail giants and applying them to the more intimate world of luxury direct marketing.
Cracking down on counterfeits
Burberry is one of the most counterfeited brands in the world, so it makes perfect sense that this is an area where it has already put AI and machine learning technology to work.
The brand uses technology provided by Entrupy which is based around image recognition, and capable of determining from one photograph of a tiny section whether or not a product is genuine. It does this through examination of minute details in the texture and weaving, and can reportedly spot a counterfeit with 98% accuracy. This means retailers offering bootleg products can quickly be shut down and brought to justice.
After proving the concept of a tech-led, luxury fashion and retail enterprise, with personalization and direct marketing initiatives, Burberry has spoken about its plans to roll out AI tech into other areas of its operations, including production and product development, although here it appears to be taking a more cautious approach.
Their senior VP of IT, David Harris, has said “We are formulating our AI strategy now … we believe that AI can deliver business value through making better products, faster, cheaper processes and more insightful analysis.
“For instance, we certainly see the potential for machine learning to improve and automate a number of our support processes – dev ops, testing, etc.”
Harris went on to say that possible uses include insights from pattern recognition, scenario modelling for logistics purposes, as well as increasing security and preventing fraud.
Burberry was built on innovation – its earliest products were made from durable new fabrics such as Gabardine developed by founder and inventor Thomas Burberry in the 19th century. It makes complete sense that today the brand still looks to leverage new developments to maintain its competitive edge.
Smart technology in the new era
Artificial Intelligence, Machine Learning, and Big Data not only apply in retail, but can be applied in many other areas, including several financial, banking, such as anti-money laundering, card fraud prevention, credit assessment, cross-selling (sales suggestion), etc.
The applications mentioned above are only a small part of the application of modern technology into practice, space for new technology application is much, IT development is bringing more benefits to society. Trends in the application of smart technologies, including AI, Machine Learning, Big Data, and Cloud Computing, are indispensable trends in today’s world.