Burberry, Kering Cite ‘Resets’ to Capitalize on Luxury’s Rebound

The luxury sector is getting back on a growth trajectory after a three-year malaise that nonetheless gave global brands time to “reset” for a better future.

They’ve formed new strategies based on fresh consumer insights, technology advances and revamped creative teams.

That was the central theme of last Thursday’s Luxury Executive Roundtable organized by the Boston Consulting Group at the firm’s Hudson Yards offices in Manhattan. The evening began with a presentation by BCG managing director Beatrice Lemucchi on the state of the luxury industry based on the BCG/Altagamma annual survey of 12,000 luxury consumers, as well as interviews with members of BCG’s advisory board, industry chief executive officers and consumer studies.

Then Laura Dubin-Wander, president of Burberry in the Americas; Ewa Abrams, president of Kering for the Americas, and Tim Chai, head of product strategy at TikTok Shop, discussed how their companies are evolving and using consumer insights. “We’re sort of past this reset stage where there was anemic growth,” said Robin Mitchell, BCG’s senior adviser who moderated the panel.

Dubin-Wander said the “Burberry Forward” transformation strategy consisted of four pillars: brand, client, product and distribution. “We’re moving a little bit away from the true transformation piece and are laser-focused on a growth mode…We have great brand awareness. What we are really focused on is brand heat and desirability…The way you get brand heat and get clients to really desire the brand is to focus on Western talent. While the English are fabulous, there are probably opportunities for talent that has more global reach, specifically more Western reach. With that, we’ve doubled down on athletes, particularly in the States.”

She said Burberry has tapped NBA players, including Carmelo Anthony who has participated in Burberry events and wears the clothes. The strategy has been “a game changer” in men’s, she said. On the women’s side, “high-touch experiences,” including recent pop-ups in the Hamptons, Palm Beach and Aspen, have been game changers.

Burberry has leaned into its “core competencies by creating trench destinations and scarf bars,” Dubin-Wander said. She also sees Burberry “recalibrating” its distribution with opportunities to downsize or exit certain locations in the U.S.

On the men’s side, Burberry’s $400 polos represent an accessible price point. “Polo galleries” have been put together, starting the journey for some to discover other Burberry products. Similarly, Burberry women’s offers athleisure, which has been “reignited” because it’s a category that’s part of a lifestyle.

At Burberry, AI is moving at a “meteoritic pace [though] it’s still very back-of-house,” focused on such areas as data analytics, IT and supply chain.

Abrams said Kering has been creating a platform to achieve synergies across functions, and processes “that allows us to make fast and clear decisions. Some of that is around the implementation of technology and AI to create an accelerator for the brands.”

Discussing luxury versus aspirational customers, Abrams said high-net-worth customers need “high-touch personalization, experiences, things that money can’t buy and surprise and delight” clients.

Aspirationals, however, are motivated more by cultural relevance, specifically artists and musicians. “It’s a different type of engagement,” she said. Aspirationals don’t buy into categories as deeply as high-net-worth customers. “It’s important to stimulate them with the right product categories such as eyewear or fragrance,” costing less than ready-to-wear.

BCG’s Chai said TikTok users want personalization and nativeness.

“Even in luxury, our users are not as receptive to things that are too polished, too precious. The most successful brands [on TikTok] maintain the brand voice, but in a way that’s very popular and native,” he said. “Burberry is an amazing example. On TikTok, the presence is still quintessentially British, with heritage, evoking the countryside and an aristocratic feeling, but it’s more playful, fast-paced, joyful, and with cheeky British humor.”

Recapping findings from the BCG/Altagamma report, Lemucchi said luxury would grow by 2 percent to 5 percent globally this year, fueled by 8 percent growth in North America as well as AI and tech-created wealth. Europe is seen flat to up 1 percent. China is expected to recover with 2 percent to 3 percent growth. The Middle East is seen falling by double digits due to the war. She also cited “positive numbers” among aspirational customers, after declines in recent years. “They either didn’t engage in the market or had a lower spend.”

Even the richest of luxury shoppers, Lemucchi said, are sensitive to price increases, with about 70 percent deciding not to buy something they wanted because of a price hike on at least one occasion. “The good news is that when they stop that type of purchases, most of the time they shifted to another category, such as beauty.”

She said luxury has been slower to adopt AI than other industries, though there’s been “significant acceleration in the last 12 months. Ninety percent of customers are telling us they’re already engaging with AI tools or prompts on a daily basis or weekly,” often involving product discovery, recommendations and comparison pricing. “They also trust AI tools and platforms much more than social media and influencers.”