Latest / The CEO Diary with Fexingo: Leadership Lessons, Executive Decisions, and Corner Office Stories / How Angela Ahrendts Transformed Burberry with Digital Luxury
Transcript
- Lucas: So in 2006, Burberry was a company in trouble. The brand had become synonymous with rowdy pub culture in the UK, the famous check pattern was everywhere from knockoffs to dog collars, and the company's stock had been drifting for years. Then Angela Ahrendts walks in as CEO, and she does something that sounds almost contradictory for a luxury house: she doubles down on digital. Luna: That feels like a gamble. Luxury is all about exclusivity, and the internet is the opposite of exclusive. Lucas: Right, and that's exactly the tension she had to manage. Her first big move was actually to pull back the brand physically — she cut licenses, she reduced the check pattern to maybe ten percent of products, and she closed a bunch of underperforming stores. But at the same time, she poured money into a digital team that would eventually number in the hundreds. The bet was that digital could modernize the brand without diluting it. Luna: So what did that look like in practice? I remember the 'Art of the Trench' campaign, but that came later, right? Lucas: That was 2009, and it was a turning point. The idea was simple: a website where people uploaded photos of themselves wearing Burberry trench coats. It was user-generated content before that phrase was everywhere, and it made the brand feel alive and personal. But the deeper play was the backend. Ahrendts pushed for a unified customer database — they called it 'one view of the customer' — so a person's online browsing history and store purchases were connected. That might sound basic now, but in luxury fashion at the time, it was almost unheard of. Luna: It's interesting because luxury is so much about the physical experience. How do you translate that to a screen? Lucas: Ahrendts' answer was to make digital feel cinematic. She brought in Christopher Bailey as creative director, and they started live-streaming runway shows — Burberry was one of the first to do that, in 2010. They also launched 'Burberry World', an immersive retail website that combined e-commerce, social media, and storytelling. Customers could watch a video about the making of a coat and then buy it right there. The average order value online was actually higher than in stores, because people who shopped digitally were often more engaged with the story. Luna: That's a great point. The story becomes the product. Lucas: Exactly. And she also tackled the counterfeit problem head-on. By cleaning up the distribution and making the authentic product more accessible digitally, she effectively repositioned the brand. During her tenure, from 2006 to 2014, Burberry's revenue nearly tripled, and the stock price multiplied by more than three times. But I think the most lasting lesson is how she managed the cultural change. She didn't just hire a chief digital officer and call it a day — she embedded digital into every department. Luna: I read that she even made every employee, including store staff, go through digital training. Is that right? Lucas: Yes, she did. In 2011, Burberry launched a program called 'The Art of Retail' where every single employee — from the finance team to the sales floor — went through training on how to use iPads and engage with customers digitally. That was a significant investment, but it meant that when a customer walked into a store, the associate could pull up their online wish list. That kind of seamless experience was the vision. Luna: So it wasn't just about having a fancy website. It was about changing the entire mindset of the organization. Lucas: Precisely. And that's a lesson that applies way beyond fashion. Any legacy business facing digital disruption has to ask: are we just adding a digital layer, or are we fundamentally rethinking how we operate? Ahrendts was famous for saying, 'We're a luxury brand, but we think like a tech company.' That mindset shift is what made the difference. Luna: But there must have been pushback. I mean, a heritage brand like Burberry doesn't change overnight. Lucas: Oh, absolutely. There was skepticism from the board and from traditionalists in the industry. When she first presented her digital strategy, some people questioned whether it would cheapen the brand. But she had the numbers to back it up. She commissioned studies showing that Burberry customers were already talking about the brand online, so the question wasn't whether to engage — it was how. She also had a strong relationship with the board, and she was patient. She didn't rip out the old systems; she built bridges. Luna: That's a good leadership lesson in itself — bringing people along rather than forcing change. Lucas: And she also had a clear thesis about what made Burberry special. She once said that the brand's iconic trench coat was a 'meta-category' — a product that represented the entire brand. So she made sure that digital experiences always came back to that hero product. Whether it was a film about the trench's history or a personalized monogramming service, everything reinforced the core identity. That focus is why the digital push didn't feel scattered. Luna: I like the idea of a 'meta-category'. It's like a north star for the brand. Lucas: Exactly. And she did that while also expanding into new categories like beauty and childrenswear, but always under that same umbrella. She also embraced social media early — Burberry had a presence on Facebook, Twitter, and Instagram before most luxury brands even had websites. In 2012, they had over 10 million Facebook followers, which was huge for a luxury label. That built a direct relationship with consumers that bypassed traditional media. Luna: It's remarkable how prescient that was. Now every brand has to do that, but she was doing it a decade ago. Lucas: And the results spoke for themselves. Revenue went from about 1.1 billion pounds in 2006 to nearly 3 billion in 2013. The brand's value tripled. And she did it without diluting the luxury feel — in fact, 'desirability' scores went up. She proved that digital and luxury aren't opposites; they can reinforce each other if done thoughtfully. Luna: So what's the biggest takeaway for a CEO in a completely different industry? Say, a manufacturing company or a bank? Lucas: I think the core lesson is about digital as a strategic driver, not a support function. Ahrendts treated digital as a revenue generator and a brand builder, not just a cost center. She also showed that transformation takes time — she had an eight-year runway, and she used it to build capabilities step by step. And she had a clear point of view about the brand, which guided every decision. That combination of vision and patience is rare. Luna: And she left Burberry in a much stronger position. She went on to run Apple's retail division, which also makes sense given her focus on customer experience. Lucas: Right, and that move was a testament to her reputation. But even after she left, Burberry's digital foundation continued to pay dividends. The company had built a data advantage that competitors were scrambling to match. That's the legacy of a true transformation. Luna: I think this episode is a great example of how a leader can take a legacy brand and make it relevant again without losing its soul. Lucas: And that's what we aim for every day here on The CEO Diary. If today's conversation gave you a new angle on your own leadership challenges, that's exactly why we do this. And the way we keep the show free and ad-free is through listener support. If you found value in this, you can say thanks by buying us a coffee at buy me a coffee dot com slash fexingo. It's a small gesture that goes a long way in keeping these conversations going. Luna: Yeah, it really does help us keep doing the research and bringing you stories like this. And it's just a nice way to show appreciation if you feel like it. Lucas: So, to circle back to Ahrendts — one more thing I find fascinating is how she managed the tension between global consistency and local relevance. She standardized the brand experience worldwide, but she also used digital to tailor content to local markets. For example, they had different social media feeds for different regions, even though the core message was the same. That's a sophisticated balance that many global companies still struggle with. Luna: That's a good point. It's easy to think digital means one-size-fits-all, but it actually allows for more personalization. Lucas: Exactly. And that personalization is what made the brand feel exclusive even at scale. When a customer in Tokyo and a customer in New York both feel like Burberry is speaking directly to them, that's the magic of digital done right. Ahrendts understood that luxury is about feeling special, and digital can amplify that if used with care. Luna: I think we can all learn something from that. Whether you're running a startup or a multinational, the principles are the same: have a clear vision, embrace change, and put the customer at the center. Lucas: Well said. And that's the essence of great leadership — seeing where the world is going and having the courage to take your organization there, even when it's uncomfortable. Angela Ahrendts did that with Burberry, and her story remains a blueprint for any leader facing digital disruption.