How Angela Ahrendts, CEO of fashion brand, will transform Apple

On October 15th, Apple hired British fashion brand Burberry's CEO Angela Ahrendts to serve as its Senior Vice President of Retail. This news caught the attention of both the tech world and the fashion industry. She will leave Burberry in mid-2014 to take over Apple's retail and online store operations. Ahrendts once led Burberry to a turnaround, driving significant innovation in the digital space, transforming Burberry from a staid old-fashioned raincoat brand into a respected global luxury powerhouse.

Interestingly, Ahrendts isn't the only luxury executive to join Apple this year. Not long ago, Paul Deneve left Yves Saint Laurent to join Apple as Vice President of Special Projects. Reports suggest he is working on iWatch-related projects. These two hires by Apple have undoubtedly raised alarms for other players in the tech industry — they often overlook the valuable branding lessons that can be learned from the fashion retail sector.

Luxury fashion brands have always been captivating. In fact, fashion has consistently been one of the most profitable industries. Therefore, to understand why Apple’s hiring spree has drawn so much attention, we need to first clarify the differences between the consumer electronics industry and the high-end fashion industry.

Over the past decade, Apple has positioned itself as a consumer technology company. Ahrendts' predecessor at Apple, John Browett, came from Dixons, a UK-based electronics chain similar to Best Buy. Before Browett, there was Ron Johnson, a former Target executive who was responsible for launching the original Apple retail stores and creating the famous "Genius Bar." From the backgrounds of Johnson and Browett, their previous industries seemed to have larger markets compared to high-end fashion.

Now let’s look at Ahrendts; her professional background is entirely different — she became CEO of Burberry in 2006. Prior to that, Ahrendts held leadership positions at Liz Claiborne, Henri Bendel, and Donna Karan International. While Browett and Johnson were more attuned to Apple's consumers, Ahrendts has a deeper understanding of the importance of a brand's core values and culture.

Technology companies try to differentiate themselves from competitors through lowering product prices (increasing accessibility), brand recognition, and achieving innovative product functionality. However, high-end fashion brands use an entirely different strategy. They raise prices and distinguish themselves through brand identity and unique designs. Fashion brands operate in a way that highlights their elevated status within a relatively open and equal society.

In reality, consumer electronics brands are not as adept as fashion brands at constantly re-evaluating their positioning. The fashion industry deliberately separates itself from other social classes, causing continuous change — fashion elites initially set trends, but once the masses start imitating them, these elites move on to explore new trends. In other words, fashion serves as a means for consumers to announce their identity and qualification within the specific social group of fashion followers. This qualification, or sense of belonging, is constantly scrutinized by others within the group. Because fashion is dynamic, it continually follows the flow of trends.

Under Ahrendts' leadership, Burberry reinvented itself as a new cultural symbol. Owning a Burberry product has become a way to achieve differentiation, gaining group recognition in the constant pursuit of fashion. Ahrendts successfully transformed Burberry from a British brand into a global fashion icon with the power to lead the fashion industry. Its products have become symbols of its culture and home country, enabling it to maintain a leading position in broad markets and achieve higher brand value.

At Apple, Ahrendts and Paul Deneve are expected to drive and advance continuous transformation, transitioning Apple from a consumer technology company into a fashion brand, placing style ahead of technological attributes. In this process, they will also face issues similar to those encountered by Burberry. Once Apple begins focusing on its fashion style and brand tone, it will continue to surprise its consumers.