Victoria’s Secret is one of the biggest brands in the U. S. lingerie market. There primary business is to sell intimate apparel business focus on comfort and fit with an emphasis on glamor. As of now, Victoria’s Secret specializes in lingerie, swimwear, beauty products, sleepwear, hosiery, etc. This has helped the brand in developing a unique image for its product. Victoria’s Secret parent company is the Limited Brands Company. It is based out of Reynoldsburg, Ohio. Currently operating 1,017 stores in 49 states, Puerto Rico, and Canada, the company annually generates around $4,564,000,000 of revenue in their stores.
With the combination of catalogue and VictoriasSecret. com, generates annual revenue of $1,557,000,000 (Brands, L). The U. S. economic growth has been slow since the recession and is not likely to reach the pre-recession rates any time soon. But there has been some slight improvement in consumer confidence and lower unemployment which should help Victoria’s Secret comparable store sales.
Inflation has been another factor that drives revenue growth for same sales volumes and will aid growth in the brand’s revenue per square feet.
Going forward, the U. S. nnual GDP growth rate and inflation rate are expected to be around 1. 4% and 2% respectively. This gives a nominal GDP growth rate of about 3. 4% for the long term and the apparel sales will continue to shift online due to growing usage of Internet and proliferation of mobile devices. As a result, we make a conservative assumption that Victoria’s Secret’s revenue per square feet will increase by 2%-2. 5% annually, on the account of these macroeconomic factors. Over the past few years, Victoria’s Secret has expanded its product offerings outside the lingerie realm.
They also offer shoes, evening wear, swimwear, sportswear, loungewear, accessories, makeup, handbags, luggage and fragrances. We can expect Victoria’s Secret to continue to add different categories in the future to keep up with the competition. With increased product offerings at the existing stores, the brand’s revenue has increased immensely. Victoria’s Secret launched a new lifestyle brand PINK, which primarily targets college girls. Since Victoria’s Secret’s is limited in this demographic, there is a huge opportunity for expansion. About 25% of the U. S. emale population between 15-34 years falls under the college going age group (Mau,2011). Apart from opening exclusive PINK stores, Victoria’s Secret is adding full line merchandise of PINK to its existing stores, which should aid the growth in its revenue.
With increasing Competition as The Gap, Inc. , Abercrombie &Fitch and American Eagle Outfitters forces Victoria’s Secret to offer more discounts on its basic products. There competitive strength is Strengths of the Digital Marketing strategy that will be implemented include a more cohesive brand image. By updating the PINK segment of the Victoriassecret. om website, a more cohesive brand image will be formed. This will increase brand loyalty among their consumers, and further set them apart from their competitors. Another strength is that the Check In Store option will put them on pace with some of their competitors. Aerie already offers a check in store option on their website, and Victoria’s Secret needs to do the same in order to stay competitive. Abercrombie & Fitch and American Eagle Outfitters both specialize in loungewear, lotions, body products, lingerie, and undergarments and very active in social media as well. Recently, Abercrombie pushed users to “Like” their Facebook page.
By doing this, the consumer would receive a text message rewarding them with free shipping. (Johnson, 2012) Victoria’s Secret currently doesn’t offer any “rewards” via their social media pages. By having a Check In Store option, online consumers will quickly become in store consumers. The success of the Check In Store tool could be measured by the use of metrics. Metrics that could be used include online surveys of consumer satisfaction with the Check In Store option. Victoria’s Secret could also measure the success of the Check In Store option by analyzing the shopping carts.
If consumers are adding items to their shopping carts, but purchasing less frequently than before, they are most likely purchasing the product in store now. Marketing Strategy Roy Raymond, founder of Victoria’s Secret, originally targeted gentleman to make them feel comfortable while shopping for lingerie for gifts. (Secret. Ezinemark. com) Today, Victoria’s Secret’s target market is the middle class woman, or a man shopping for the middle class woman. To attract the younger crowd, such as college age woman, Victoria’s Secret developed PINK. The bright colors, trendy prints and more casual look nspires young teens and high school age girls to shop at PINK.
Victoria’s Secret’s marketing strategy is to capitalize on using high profile models (including famous singers), Social Media (including email and mobile), Fashion shows, Promotional offers, Television commercials, online deals, Semi Annual Sale, coupons and loyal customers with their VS All Access. Victoria’s Secret employed relatable and notable supermodels such as Tyra Banks, Heidi Klum, Karolina Kurkova, Gisele Bundchen and Miranda Kerr as their face for “Victoria’s Secret Angels. They are very selective on who they choose to be an Angel (model) for them. They choose models that are beautiful and have great bodies that appeal to woman and men. By using these models, Victoria’s Secret gives value to the consumer, helping them to believe that they could look that way in their garments or by using their beauty products. Victoria’s Secret creates the idea of beauty and fantasy to their hopeful consumers. Additionally, well known music artists such as Rihanna featured in the swim collection music videos, supporting the success of this campaign (Howard).
Such campaigns have been successful in the past and are likely to strengthen Victoria’s Secret’s brand image in the future as well. This type of attention for famous singers can produce great revenue for them, especially Rihanna who is current and popular amongst the younger generation. One strength of Victoria’s Secret’s current marketing strategy is that they are utilizing all of their social media platforms. They are extremely active in social media such as Facebook, Twitter, Pinterest and YouTube. Their Facebook page is the 2nd most popular retail store on Facebook with 18. million fans. It’s the 18th most popular brand on Facebook (Wakefield, 2012). Victoria’s Secret also relies heavily on the email market. Anytime a new style of bra, underwear, sweats, and beauty products are produced, they “email blast” their customers, by sending them multiple emails a day.
As far as mobile marketing goes, Victoria’s Secret has an application for Android, IPhone, IPad, and IPod, that allows consumers to shop by these mobile devices. They also use texts alerts that are sent directly to a customer’s cell phone. On their website (victoriassecret. om), numerous offers will appear, including $25 off your purchase, free shipping, etc. Currently the website is offering free shipping with a $100 purchase offer code. They are also currently hosting a 20% off clearance items on their website. These types of offers are offer often, creating repeat consumers. Victoria’s Secret All Access is also available on the website that offers information such as makeup tips, supermodel biographies, an insider’s look at the Victoria’s Secret fashion show and news events are shown. VS All Access gives the consumer a more personal experience with the brand.
Victoria’s Secret utilizes annual fashion shows and its supermodels to associate its brand image with beauty and class. Victoria’s Secret holds a fashion show every year that is broadcasted on CBS. These fashion shows are very popular with 9. 3 million viewer, men and women between the age ranges of 18 to 49. The fashion show typically has a $12 million budget (Mau, 2011). Every year, the day after the fashion show has been aired; Victoria’s Secret holds a promotional event in store where shoppers can receive a Victoria’s Secret Fashion Show t-shirt with a $75 purchase.
This event always energizes their business the day after the show has been aired. Victoria’s Secret is active in television advertisements as well. Their Super Bowl commercials are always very popular and sell the idea of Victoria’s Secret, rather than the product. The first Victoria’s Secret Super Bowl commercial lured more than 1,000,000 people to their website, which in turn, crashed and was shut down temporarily (Howard). Having huge sales also excites consumers. Victoria’s Secret produces a huge semi-annual sale, which they hold twice a year.
At this sale, bras and underwear are sorted into pink bins by size. The products are thoroughly reduced, and always draw a large crowd. Victoria’s Secret will often mail out a “free panty” card to their shoppers every month. This is a no purchase necessary coupon. They also email out “$10 off a bra” cards. These coupons really get the customers in the door. (Smith) Another coupon they introduce to the consumers is the scratch offs that offer up to $500 off, but consumers don’t know the amount until they checkout.
Even though this is a no purchase necessary coupon, rarely do consumers leave without purchasing something else. Financial Analysis A way that Victoria’s Secret can improve on profitability is to have a Check In Store Option on their website, along with a Pick Up in Store tab. This currently is not offered on their website, but would definitely be useful for consumers looking to try on the product before purchasing. Their PINK page on the website offers a “Find Which Store Carries Your Team’s Gear” option, but the Victoria’s Secret page does not offer it for swimsuits, bras, underwear, or any other products.
This would be a relatively easy installation for Victoria’s Secret. Stores already keep a continuous track of their inventory levels and what products they have on hand. The only cost of implementing this strategy would be to pay the Webmaster to install it on the website, and to continuously synchronize the Check In Store option with their current inventory levels. Implementing this tool to their website would tremendously help in the sales of products such as swimsuits, makeup, bras and other items that the consumer would prefer to see in person before purchasing.
Several retail stores such as The Buckle and Nordstrom’s offer guest loyalty programs. When a customer comes in and is drawn to a certain type of product, the sales associate or the store manager can let that customer know when more arrives. Nordstrom’s also does personal phone calls whenever a storewide sale is taking place. Victoria’s Secret could benefit from personalizing this shopping experience at their store. If their product selection were offered at all locations, consumers would have an easier and personal shopping experience.
If Victoria’s Secret wants to capitalize on the new brand PINK they need to offer more collegiate schools to their sweat apparel. For example, Texas is our biggest state and PINK does not carry the Texas Rangers, Texas Longhorns, or the Texas A&M line. By offering these lines in all Texas stores, Victoria’s Secret would gain more sales driven by the fans of those sports teams. Victoria’s Secret would also do well in offering a coupon or promotional offer through their social media pages. A “Like this Picture” offer would be appropriate for them to do. This would draw consumers to their social media platforms.