21 Sep’18

Burberry Extinguishes Flames on Unsold Goods

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In a recent post I explored the luxury fashion industry practice of burning unsold goods. Proponents would argue that this is necessary to protect the brand equity these companies have spent billions building by preventing theft, discounted sale, etc. However, when this topic became mainstream, Burberry and its high-end competitors faced massive backlash from the general public and environmentalists specifically. Ironically, the measures taken to prevent damage to these brands is threatening to diminish their value in a very real way. As public perceptions shift, it is imperative that marketers and brand managers navigate these changes (ideally proactively) to ensure that their brand messages align with what consumers want. A representative example of a failure to do so can be seen with brands such as Marlboro. Once one of the world’s most valuable brands – ranked #9 by Interbrand and valued at over $24 billion in the year 2002 – Marlboro has since fallen out of the Interbrand top 100 global brands as the medical community’s and general public’s perception of tobacco products has shifted 180-degrees.

Undoubtedly, some high fashion companies will continue to burn millions of dollars in unsold goods, as this practice has proven itself “successful” to this point. Others, however, have chosen to tackle this problem head-on. According to a recent BBC article, Burberry has announced its intention to eliminate the practice entirely. In fact, the company has gone a step further and pledged to eliminate the use of animal furs in all of its products – a move that undeniably aims to better align Burberry’s brand image with an increasingly environmentally and socially conscious public mindset. In a recent post on Brand Extendibility, I looked at In-N-Out Burger’s efforts to mitigate a potential negative impact on its brand, which may have actually served to increase the company’s brand equity. Similarly in the case of Burberry, management has internalized the negative press surrounding its inventory furnace and taken the opportunity to shift the message in a way that may actually increase the value of the brand – currently ranked #86 and valued at just over $5 billion by Interbrand. In an industry where products don’t “[cover] the true cost of their manufacture in terms of the environmental costs and human rights costs,” Burberry is taking the initiative to build a brand that is associated with positive change and progressive thinking.

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