Burlington Stores, Inc. (BURL): Business Model Canvas

Introduction

Burlington Stores, Inc. is a discount retailer that has been making waves in the retail industry for its unique business model. With the shift towards online shopping, brick-and-mortar stores have been struggling to keep up. However, off-price department stores like Burlington Stores, Inc. have remained relevant by providing customers with a personalized shopping experience, quality brands, and discounted prices that are hard to resist. But how has the off-price retail market been performing in recent years? Let's take a closer look.

The Off-Price Retail Market

The off-price retail market has been steadily growing over the years, with more and more consumers gravitating towards discount retailers for their shopping needs. In 2019, the global off-price retail market was valued at $429.4 billion, and it is expected to reach $758.8 billion by 2027, growing at a CAGR of 7.6% from 2020 to 2027.

• The US off-price retail market is expected to reach $93.3 billion by 2023, growing at a CAGR of 3.9%.
• In Europe, the off-price retail market is expected to reach $60.4 billion by 2027, growing at a CAGR of 7.5%.
• In Asia-Pacific, the off-price retail market is expected to reach $458.6 billion by 2027, growing at a CAGR of 8.6%.

The growth of the off-price retail market can be attributed to various factors, including the rise of e-commerce, increasing brand consciousness among consumers, and the need for affordable shopping options. In this environment, Burlington Stores, Inc. has emerged as a market leader in the United States, offering consumers quality brands at discounted prices without compromising on their shopping experience.

In the next section, we will take a closer look at Burlington Stores, Inc.'s business model, key activities, and revenue streams, and how they have managed to carve out a niche in the highly competitive retail industry.

Key Partnerships

Burlington Stores, Inc. (BURL) has a number of key partnerships that help to support the overall success of the company.

• Suppliers: Burlington partners with a wide range of suppliers to help ensure they have the right mix of merchandise to meet customer demand. This includes partnerships with well-known brands and manufacturers across a variety of product categories, such as apparel, home goods, and beauty products.
• Logistics Providers: Burlington works with logistics providers to manage the distribution of products to its stores and warehouses. This includes partnerships with shipping companies for transportation and third-party logistics providers for warehousing and fulfillment.
• Technology Partners: To support its growing ecommerce business, Burlington partners with technology companies to establish a robust online presence and enhance the overall customer experience. This includes partnerships with website and app developers, digital marketing firms, and payment processing companies.
• Real Estate Partners: Burlington partners with real estate developers and property managers to secure prime locations for its stores across the U.S. This includes partnerships with mall owners, shopping center developers, and commercial real estate brokers.

By leveraging these key partnerships, Burlington is able to effectively manage its supply chain, reach new customers, and expand into new markets.

Key Activities

Burlington Stores, Inc. engages in a range of key activities that enable it to deliver value to its customers and stakeholders. These activities are fundamental to the company's success and are reflected in its business model canvas. Key activities for Burlington Stores, Inc. include:

• Sourcing and Procurement: Burlington Stores, Inc. sources products from a wide range of suppliers, both domestic and international. The company is known for its value proposition, which requires it to maintain strong relationships with suppliers to keep costs low while ensuring quality.
• Merchandising: The company's merchandising strategy involves bringing in products that align with its target customer demographics. The company regularly refreshes its inventory, ensuring that it always has new and exciting offerings for customers to browse and buy.
• Store Operations: Burlington Stores, Inc. operates a network of stores across the United States. Each store location must be well-maintained, staffed with knowledgeable employees, and designed to maximize customer experience.
• Marketing and Advertising: To drive traffic and sales, Burlington Stores, Inc. invests in various marketing and advertising initiatives, including print and digital ads, email marketing, and social media campaigns.
• Logistics and Supply Chain Management: To ensure that products are delivered to stores in a timely and cost-effective manner, Burlington Stores, Inc. has a well-run logistics and supply chain management system. This includes managing inventory levels, transportation, and warehousing.
• Pricing and Promotions: As a value retailer, Burlington Stores, Inc. focuses on offering competitive prices and promotions to attract and retain customers. The company's pricing strategy involves balancing product quality and customer demand with the need to maintain operating margins.

By effectively executing these key activities, Burlington Stores, Inc. is able to generate revenue, increase customer satisfaction, and differentiate itself from competitors in the crowded retail market.

Key Resources

• Stores: The physical stores are the key resources for Burlington Stores, Inc. (BURL) as they provide a platform for customers to access their products and services.
• Suppliers: They rely heavily on their suppliers to provide quality products at competitive prices to ensure customer satisfaction and maintain profitability.
• Technology: In today's digital age, technology is an essential resource for retailers. Burlington Stores, Inc. need to invest in technology to improve operational efficiency, customer experience, and stay competitive in the market.
• Logistics: Efficient and timely logistics management is critical to the success of the business. They must have adequate resources to manage the supply chain effectively, including transportation, distribution, warehousing, and inventory management.
• Human Capital: Skilled and knowledgeable employees are crucial to providing excellent customer service and maintaining customer loyalty. They need to attract, retain, and develop a talented workforce to support their operations and growth.
• Marketing: An effective marketing strategy helps to create brand awareness, attract new customers, and retain existing ones. They need to allocate suitable resources for marketing activities, including advertising, promotions, and market research.
• Financial Resources: Financial resources are essential to fund business operations, investments, and expansion plans. They need to ensure they have enough capital to support their growth strategies.
• Intellectual Property: Burlington Stores, Inc. may have valuable intellectual property such as trademarks, patents, and copyrights that differentiate their products and services from their competitors.

In conclusion, Burlington Stores, Inc. (BURL) requires several key resources to deliver value to its customers and achieve its long-term objectives. These resources must be leveraged effectively to ensure the business's success and maintain a competitive advantage in the market.

Value Propositions

Burlington Stores, Inc. (BURL) is known for its 'treasure hunt' shopping experience that provides customers with access to designer and name-brand merchandise at up to 60 percent less than department store prices. The company's value propositions include the following:

• Quality Products: Burlington Stores, Inc. offers high-quality products that are sourced from manufacturers and suppliers around the world. The company stands behind the quality of its products and provides customers with a 30-day return policy.
• Affordable Prices: One of the key value propositions of Burlington Stores, Inc. is its affordable prices. The company is committed to offering customers designer and brand-name merchandise at prices that are significantly lower than other retailers.
• Variety and Selection: Burlington Stores, Inc. offers customers a wide variety of merchandise from clothing and accessories to home goods and furniture. The company is always adding new items to its inventory, giving customers access to the latest trends and styles.
• Convenience: Burlington Stores, Inc. has over 700 stores in the United States, making it a convenient option for customers who want to shop in-person. Additionally, the company has an easy-to-use online store that allows customers to shop from anywhere, at any time.
• Customer Service: Burlington Stores, Inc. is committed to providing excellent customer service. The company offers a variety of customer support channels including phone, email, and live chat. Additionally, the company has a robust FAQ section on its website that addresses common customer questions and concerns.

Overall, Burlington Stores, Inc. offers customers high-quality merchandise at affordable prices, with a wide range of selection and convenient shopping options. The company's commitment to customer service and satisfaction further enhances its value propositions and makes it a top choice for shoppers looking for value and variety.

Customer Relationships

Burlington Stores, Inc. (BURL) aims to maintain strong customer relationships by providing an exceptional shopping experience to its customers. The company strives to create a positive and welcoming environment in its stores, where customers can easily find what they are looking for and receive excellent customer service. Burlington Stores makes use of several strategies to establish and maintain its customer relationships. These strategies include: 1. Personalized Service: Burlington Stores’ associates are trained to provide friendly and personalized service to each customer. They assist customers in finding the right products, provide recommendations, and answer any questions they may have. 2. Loyalty Program: Burlington Stores has a loyalty program called “Burlington Rewards”. The program allows customers to earn points for every purchase they make, which can be redeemed for discounts on future purchases. The program also offers exclusive access to sales events and promotions. 3. Social Media Engagement: Burlington Stores engages with its customers on social media platforms such as Facebook and Twitter. The company uses these platforms to announce new arrivals, offer promotions, and respond to customer queries. 4. Customer Feedback: Burlington Stores values its customers’ feedback and takes it into account to improve its products and services. The company encourages customers to provide feedback through its website, customer service phone line, and social media platforms. Overall, Burlington Stores’ customer relationships are built on a foundation of personalized service, rewards and promotions, social media engagement, and customer feedback. The company strives to create an exceptional shopping experience for its customers and build lasting relationships with them.

Channels

Burlington Stores Inc. utilizes various channels to reach its target market and distribute products. Retail stores: Burlington Stores Inc. operates over 700 retail stores across the US. These stores serve as the primary channel for the company to sell their products to its customers. The company's retail stores are situated in prime locations that are accessible to customers, making it easier for them to purchase products from the store. Online store: Burlington Stores Inc. has an online store that provides a convenient shopping experience for customers who prefer to shop online. The website lists all available products and provides customers with a user-friendly interface for browsing and purchasing products online. Mobile application: Burlington Stores Inc. has a mobile application that is available for download on both iOS and Android devices. Through the mobile app, customers can access the online store and make purchases on their mobile devices. Advertisements: Burlington Stores Inc. utilizes various forms of advertising to reach its target market. The company advertises through television, radio, and social media platforms to promote their products and any ongoing promotions. Partnerships: Burlington Stores Inc. has partnered with various organizations to increase its reach and offer products at discounted prices. The company has partnered with non-profit organizations and schools to provide products to underprivileged individuals and communities at a discounted rate. Customer service: Burlington Stores Inc. has an excellent customer service system that enables customers to make inquiries about products, services, and any other relevant issues. The company has a customer service hotline and email address, and a customer service team that responds promptly to customer inquiries. Through its various channels, Burlington Stores Inc. reaches millions of customers every day, making it a successful and profitable business in the retail industry.

Customer Segments

Burlington Stores, Inc. serves a wide range of customers through its department stores located across the United States. The key customer segments that the company targets include:

• Bargain Shoppers: These are customers who are value-conscious and seek affordable off-price products. Burlington Stores, Inc. offers such customers an assortment of brand name and designer merchandise at prices up to 60% off department store prices.
• Families: Burlington Stores, Inc. offers a range of products for families, including clothing, accessories, footwear, and baby products. With its wide selection of family-oriented products, the company targets busy families who require all their shopping needs to be met in one convenient location.
• Middle-Income Shoppers: The company also targets middle-income shoppers who seek stylish, quality products without breaking the bank. By offering brand name and designer merchandise at discounted prices, Burlington Stores, Inc. delivers high value to customers with moderate budgets.
• Online Shoppers: Burlington Stores, Inc. also targets customers who prefer to shop online. The company's website offers ease of navigation, a user-friendly interface, and value-added features such as online price comparison tools and the option to purchase online and pick up in-store.

Overall, Burlington Stores, Inc. caters to a broad range of customers who seek value, quality, and convenience. The company's customer segments range from bargain shoppers to middle-income shoppers to families, and they are all drawn to the company's value proposition—that is, offering high-quality merchandise at discounted prices.

Cost Structure

Burlington Stores, Inc. operates on a low-cost business model that enables the company to offer quality products at affordable prices, while maintaining a significant profit margin. The company's cost structure is divided into two categories:

Fixed Costs:

• Real Estate: Burlington Stores, Inc. focuses on leasing retail spaces in shopping centers with high foot traffic to attract more customers.
• Salaries and Wages: The company employs both full-time and part-time workers who receive competitive wages and benefits. Burlington Stores, Inc. has a low employee turnover rate, which saves the company costs associated with recruiting and training new employees.
• Utilities: Burlington Stores, Inc. incurs expenses for electricity, heating, and cooling of its stores.
• Marketing and Advertising: The company invests in marketing and advertising to promote its products, sales, and discounts. Burlington Stores, Inc. also spends a significant amount on digital marketing, social media campaigns, and print media advertisements.

Variable Costs:

• Cost of Goods Sold: Burlington Stores, Inc. purchases products from various suppliers and vendors at bulk prices to keep its inventory costs low. The price and quality of these products directly impact the profit margin.
• Shipping and Handling: The company incurs expenses for shipping and handling of its products from suppliers to stores or directly to customers who shop online.

Burlington Stores, Inc. manages its costs by optimizing its supply chain management and negotiating favorable contracts with suppliers and vendors. Additionally, the company minimizes its operational costs by utilizing efficient management systems and lean processes, such as electronic inventory management, which reduces the time and cost associated with manual tracking of products. Overall, the cost structure enables Burlington Stores, Inc. to maintain its competitive advantage and offer affordable prices to its customers, while generating high profits for its shareholders.

Revenue Streams

Burlington Stores, Inc. generates its revenue through the following channels:

• Retail Sales: The primary source of revenue for Burlington Stores, Inc. is through the sale of discounted and branded apparel, accessories, home goods, and other products
• Online Sales: With the growth of online shopping, Burlington Stores, Inc. also generates revenue through its online e-commerce website, where customers can purchase products from the comfort of their own homes
• Private Label: Burlington Stores, Inc. offers several private label brands which allow for higher margins and can drive additional revenue streams
• Licensing Revenue: Burlington Stores, Inc. generates revenue through licensing agreements with vendors who use the company’s brand, logo, and trademarks on their products
• Extended Warranties and Protection Plans: Burlington Stores, Inc. offers warranties and protection plans on select products, generating additional revenue by selling extended warranty coverage and protection plans to customers
• Co-Branded Credit Cards: Burlington Stores, Inc. also generates revenue by partnering with various credit card companies and offering customers co-branded credit cards that offer rewards and exclusive discounts to customers that use them on a regular basis

Overall, Burlington Stores, Inc. generates revenue through multiple channels, with retail sales being the primary source, but extending to online sales, private label, licensing revenue, extended warranties and protection plans, and co-branded credit cards.

Conclusion

After analyzing the Business Model Canvas of Burlington Stores, Inc., it is evident that the company has a strong business model that focuses on offering customers high-quality goods at discounted prices. Burlington's key strengths include its wide range of product offerings, expansive store footprint, and efficient supply chain management.

However, the company faces several challenges such as growing competition in the retail industry and the need to adapt to changing consumer preferences. In order to sustain its success and continue growing, Burlington needs to prioritize customer experience, invest in technology and digital channels, and optimize its supply chain further.

Overall, the Business Model Canvas highlights the key areas that Burlington needs to focus on to build a sustainable and profitable business model. By focusing on providing value to its customers, managing its costs effectively, and adapting to changing market conditions, Burlington has the potential to remain a leader in the retail industry for many years to come.

• Focus on providing value to customers
• Manage costs effectively
• Invest in technology and digital channels
• Optimize supply chain further
• Adapt to changing market conditions