The document discusses technology and innovation in the retail industry. It provides an overview of trends in retail and the increased focus on customer service. It then presents a case study of Burberry and its strategic service innovations under CEO Angela Ahrendts from 2005-2014. These included developing an end-to-end digital enterprise, personalized customer experiences using new technologies, and transforming stores into digital brand experiences. Lessons highlight the importance of institutionalizing service innovation and using technology to enhance customer personalization and service delivery.

1. Technology in Service
Innovation &
Intrapreneurship: Retail
PRESENTED BY
JVRENA WHITEHALL Arthur Lok Jack Graduate School of Business
MIIE Cohort 2
IIAE 6016

2. AGENDA
 What is Retail?
 Overview of the Retail Industry
 The Service Landscape
 Service Innovation & Intraperneurship Case Study
 Lessons Learned
 Recommendations

3. Firstly - What is Retail?
Producer Wholesaler Retailer Consumer
Producer Retailer Consumer
Producer Consumer

4. Retail Formats

5. The Retail Industry
 Retailers undertake business activities and perform functions to increase the value of the products and
services.
 As such, retailers must know their customers' needs and wants, to advertise and attractively display the
goods they sell.
 Therefore, in the retail industry it can be said retailers compete on service, rather than on the physical
product (Gronoos 2000)
 Customer service is a vitally important differentiator across the retail industry. The challenge being to
develop a retail service model that treats each customer as an individual and maintains satisfaction and
loyalty levels.
 Overtime service has become a business essential in manufacturing (Zeithanel & Bitner 1996)

6. Trends in the
Service
Landscape
• The want for greater involvement
• The want for customised and personalized products/ service
• The expectation of mobility
Higher Customer Expectations
• 1.5 Billion smart phones
• 100 B apps downloaded
• Digital retailing
Rise of the Mobile Internet
• Insights from numerous sources
Big Data & Advanced Analytics
• Machine to machine connectivity, enabling real time service
delivery
The Internet of Things

7. A Changed Retail Landscape
 Retail has evolved into a dynamic industry driven by two significant shifts
 Technology
 Changes in consumer behaviour
 These market factors have created smarter consumers who have instantaneous access to
information about retailers, products and consumer experiences.
 Consumers are now interconnected with clearly defined expectations.
 Retailers are now challenged to offer a differentiated, excellent shopping experience.
 A GREATER FOCUS ON CREATING VALUE FOR THE CUSTOMER = Servitization = A focus on
process, delivery and experience innovation.

8. Achieving
Customer
Loyalty
Reduce customer effort
Create fascination and thrill in the
shopping experience through a "wow
effect"
Reengineer the purchase process to
create an almost effort free customer
experience

9. Failure to Adapt
aka
Innovate in a Changed/ing
Landscape
 More than 8,000 store closures
were announced in 2017
 Approximately 3,600 are on
the way for 2018
(Business Insider)

10. BURBERRY
A CASE OF STRATEGIC SERVICE INNOVATION &
INTRAPRENEURSHIP
"WITHOUT INNOVATION, COMPANIES GET TOO COMFORTABLE WITH
THEIR PAST SUCCESSES AND EVENTUALLY GO OUT OF BUSINESS"
- GEORGE DEEP

11. Burberry
 Burberry is a British luxury fashion house,
distributing clothing, fashion and accessories.
 Founded in 1856 by Thomas Burberry a
draper’s apprentice
 1880 -Invented Gabardine, a breathable,
weatherproof and tearproof fabric
 Explorers wore his weatherproofs on epic
adventures
 Invented the trench coat and dressed British
officers for war
 1920 – the Burberry check is registered

12. SNAPSHOT OF BURBERRY
2005 vs. 2014
2005 2014
 Dynamic digital innovation mindset to
retail with a focus on the customer
 Use of big data and analytics to
personalize services
 Cross-functional collaboration and open
communication
 Turnover total 2,330M
 Invigorating its product offering using its
heritage of Design Innovation as a Platform
 Leveraging its brand recognition to extend its
reach
 License deals that devalued the brand which
lacked a cohesive image causing
underperformance in the luxury market.
 Turnover total 715.5M

13. SNAPSHOT OF BURBERRY
2005 vs. 2014
Retail
70%
Wholesale
27%
License
3%
Turnover by channel of
Distribution 2014
Retail
43%
Wholesale
46%
Licence
11%
Turnover by channel of
Distribution 2005

14. Financial performance 2006-2014
743
850
995
1202 1280
1501
1857
1999
2330
168
185
206
181
220
301
337
428
461
2006 2007 2008 2009 2010 2011 2012 2013 2014
Revenue Profit

15. The Intrapreneurial Leader
Angela Ahrendts
 Took over as Chief Executive of Burberry in
2006
 Ahrendts’ Challenge – Breathe life into a 158
year old brand without disrupting its
underlying DNA
 Ahrendts’ Approach – create a seamless,
consistent and brand-centric customer
experience, free of the pain points of
traditional retailers. With a main focus
on becoming an “end-to-end” digital
enterprise. - Strategic Reflexivity

16. Digital
a No-No!
for Luxury
Brands
 Within the fashion industry, there were still
many who looked down on the internet.
 Patrizio Bertelli, the chief executive of Prada,
told Harvard Business Review he would not
sell high-end Prada collections online because
he is "concerned about compromising our
image by using a channel where secondhand
cars and books are sold".
 Critics also commented that her distraction
with bits and bytes was a distraction from core
business of selling luxury clothes.

17. Ahrendts the
Enabler
 Ahrendts set up a ‘Strategic Innovation Council’ – a
formal monthly forum used to gather the “young
generation of great thinkers”. The remit of the
council was to dream.
 A Creative Brand Czar and a Tech Czar were
appointed to drive the innovation programme
throughout the company. Allowing ideas to flourish
and turn the best of those ideas into brand-
enhancing initiatives
 In 2011 she gave the council the challenge to
create the store of the future.
 A year later the Flagship store Burberry Regent
Street – “Burberry World Live” was revealed to the
public.

18. Digital Meets the Physical
“walking through our doors is just like walking into our website”

19. “ You need mind share, if you want market share.
 The focus of the tech transformation at Burberry was built to personalize
relationships with customers.
 While the end-to-end digital enterprise would use Big Data and Artificial
Intelligence to boost sales and customer satisfaction.
Through technology, Burberry has been able to create value through user
generated content, shopping experiences and shared experiences.

20. Observations
 Service Innovation Dimensions - Den Hertog
 D1 – New Service Concept – End-to-End digital enterprise
 D2 – New Client Interface – Burberry World Live
 D4 – Technological Options – Social Media, Big Data, Artificial Intelligence, Tech at the Store
 Strategic Innovation (Styles & Goddard 2015)
 The 2 spheres were observed
 Angela looked at where the organisation was and where she wanted it to be.
 Angela ensured to stay true to the core of the Burberry brand while also looking towards
the future in terms of the use of technology

21. Lessons
Learned
 Institutionalize Service
Innovation
 Use technology to your
advantage
 Personalise the
Customer Experience
 Simplify Service Delivery

22. Enabling Intrapreneurial Activity
 https://www.youtube.com/watch?v=edf6vSnJomU

23. References
 https://www.fastcompany.com/3019991/apples-new-consumer-experience-chief-angela-
ahrendts-on-the-future-of-retail
 http://imediaavenue.com/burberrys-innovation-turn-around-straight-from-the-top/
 https://www.economist.com/node/21563353
 https://www.burberryplc.com/en/investors/annual-report/annual-report-archive.html
 https://londoncalling.co/wp-content/uploads/Democratic-Republic-of-Burberry.pdf
 https://www.forbes.com/sites/bernardmarr/2017/09/25/the-amazing-ways-burberry-is-using-
artificial-intelligence-and-big-data-to-drive-success/#34d5345e4f63
 https://www.mckinsey.com/business-functions/operations/our-insights/service-innovation-in-a-
digital-world
 http://www.nytimes.com/2009/11/10/business/global/10burberry.html?_r=0