victorias secret the leading retailer in womens lingerie

I) Executive Summary
The history of lingerie can be traced back thousands of years to 3000 B.C., but it was not until 1977 when Roy Rogers founded Victoria’s Secret that lingerie evolved into what we think of now. In this paper, we examine the emergence of Victoria’s Secret as the leading retailer in women’s lingerie, the context for the innovation, and the approaches the firm took to commercialize the innovation. Victoria’s Secret was hardly the first lingerie retailer, but it was able to take advantage of a niche market demand, fortunate timing, and a well-sequenced ecosystem to become the market leader it is today. Our focus is on the period between 1977 when Roy Rogers first founded VS, through 1982 when he sold the company to The Limited Brands, and finally ending in 1995 when The Limited Brands was able to fully realize Victoria’s Secrets’ value proposition.

II) Context for Innovation
The Evolution of Lingerie:
Lingerie as derived from the French words lin (linen) and linge (washables), translates to washable lineni. Our notion of lingerie, as fashionable and alluring undergarments for women, is a modern concept as compared to that of previous generations. For most of history, women’s underwear was designed for functionality rather than sensuality. Until the glamorization of women’s underwear, deemed as of the 1960’s, undergarments served three main purposes: shape, hygiene, and modestyii. Historical records trace the origin of lingerie to ancient Egypt, around 3000 B.C., where status or social prestige was represented by the types of clothing. High-ranking Egyptian women wore tunics – narrow undergarments that started below the chest, extended to the ankles, and were supported by crosswise shoulder strapsiii. Additional forms of women’s innerwear are depicted by statues, paintings and writings from classical Greece: the zonѐ (a band of linen worn around the waist and lower torso for shape and control), apodesmos (breast band or girdle), mastodeton or mastodesmos (band that flattens the breast)iv. In Roman, undergarments which were also worn as outwear at times, were designed as well for functional uses rather that aesthetics: mamillere and fascia as clothing bands to support the bustv. During medieval times, linen underwear was worn by nobility as a means to protect expensive outwear and to provide
a layer of warmth. Of note, the chemise (a tunic that gathered into a square or circular neck) and early forms of the corset (a tight-fitting bodice) were introduced in the fourth and sixteenth centuries A. D. respectively. As fashion trended towards tailored clothing, designed to follow the shape of the body, women began to use more of tight-fitting garments to manipulate body shape. For example, women used paste as a stiffener between two layers of linen to create stiffer, harder bodices. vi Perceived as one of the most controversial garments in history, the corset, often referred to as “stay” or “support”, was enhanced to provide even more structure for the female form. The corset functioned by binding the body to compress at the center and move flesh from the waist to the breasts and hips. The practice of “tight-lacing” became common, training the body to accept progressively narrower binding to achieve and extremely exaggerated, hourglass shapevii. This practice was in some ways symbolic of sexual intercourse obviously provoking erotic appeal during this age. However, the corset was often painful and limited movement. Many argued that the corset was responsible for causing miscarriages and deformities and that it repressed and victimized womenviii. The Victorian age yielded greater innovations in lingerie. The steel-front busk fastening, allowed women to put on or take off corsets without assistance. The elastic corset emerged offering more comfort. Laced trimmings and embroidery, and silk underwear were introduced. Innovations in steam molding and dyes enabled lingerie to be colored and shaped. Victorian fashion highlighted women’s bodies: exaggerated full sleeves, minuscule corseted waists, and whalebone hoops and crinolines accented yards of fabric and bustles. Victorian clothing became associated with sexual anticipation given the difficulties presented in taking it all off. The introduction of garters (hooked corsets to stockings) heightened excitement and is credited with the spawn of striptease shows and dances.ix The name Victoria’s Secret was adopted from this era. Lingerie cycled through various trends from the early twentieth century to the present. The increased participation of women in sports and dancing gave rise to brassieres and less restrictive girdles. The “alphabet bra” was introduced with cup sizes ranging from A, B, C, and D. Also advancements in materials for such garments shifted from steel and rubber to synthetic materials, precursors to Lycra, rayon, and Lastex. The historical context of wars,
hippie and feminist movements, and the boom of the film industry, began to shape a bigger social context for lingerie than previously in history. On one hand, lingerie was socialized as restrictive, artificial, and conforming. On the other hand, some advancements (briefs, bikinis), provoked feelings of youth and freedomx. Regardless, by the 1960’s it was quite evident that women’s lingerie incited some type of emotional response from women and men alike. The timing was ripe for promoting lingerie in a greater business context.

The Introduction of Victoria’s Secret:
Roy Raymond, an alumnus of Tufts University and Stanford Graduate School of Business, started Victoria’s Secret in 1977. His impetus for creating the business was his embarrassment at purchasing lingerie for his wife in a department store. He was uncomfortable with the interaction with salespeople in department stores and thought that the product offering in such stores was undesirable. Roy borrowed $80,000 from a bank and relatives to implement his vision of an ideal lingerie store, one that would provide a comfortable environment for men. The first store was opened in Stanford Shopping Center in Palo Alto. Roy envisioned a Victorian-boudoir theme for his store with wood-paneled walls and a helpful sales staff. Furthermore, instead of racks of bras and panties in every size, there were single styles, paired together and mounted on the wall in frames. Men could browse for styles for women and sales staff would help estimate the appropriate size, pulling from inventory in the back roomsxi. In the first year, the store generated half a million dollars in sales providing Raymond the funds to open three new stores and start a mail-order cataloguexii. The Victoria’s Secret catalogue was also a success, showcasing Roy’s growing collection of bras, panties, slips, and loungewear. The main rivals to Victoria’s Secret at this time were department stores such as Sears & Roebuck, other mail-order programs, and Fredericks of Hollywood. Although Fredericks sold similar products, the retailer had a darker edge that perhaps appealed to fewer people. After five years of operation, Victoria’s Secret had grossed $6M in profit. However, Roy experienced difficulties running the business, often running late on mail-orders and not producing to meet demand. In 1982, Roy sold Victoria’s Secret six stores and mail-order catalogue for $4M to
the founder of The Limited women’s apparel firm.xiii

III) Ecosystem and Value Chain
The secret behind Victoria’s Secret’s success can be attributed to the construction of its ecosystem. When Roy first created Victoria’s Secret, he established a Minimum Viable Footprint ecosystem: he started with one unique store that provided some commercial value to male and female shoppers (a comfortable shopping experience outside of the prying eyes in department stores). His challenges were in the sourcing and execution of his plan. In addition to building the brick-and-mortar storefront, he needed to establish the value chain and build relationships with lingerie designers and manufacturers so that he had product to sell to his end customersxiv. These early challenges may have been daunting at times, but Roy was able to successfully establish a Minimum Viable Footprint and start to build a client base.

As he gained traction, he expanded his operations to include similar stores in other parts of California and also developed a mail catalogue for customers who could not go to a store. In keeping with his goal of making lingerie accessible to men and women, Roy’s initial catalogues showcased male and female couples together and allowed customers to mail in their requests and have their orders shipped to their homes. It was an innovative concept at the time, but by the early 1980s, Roy ran into problems meeting demand and running the mail order businessxv.

By the time Leslie Wexner bought Victoria’s Secret for The Limited Brands in 1982, Victoria’s Secret had six stores and a 42-page catalogue. Wexner wisely recognized that Roy had established a Minimum Viable Footprint and had a small but growing customer base. He carried over some of the components of the ecosystem that Roy had established (the boudoir store experience and the mail catalogue) and improved upon them. He amped up the sex appeal in the catalogues by having female supermodels pose exclusively for Victoria’s Secret. He drew on The Limited’s deeper pockets and invested in improvements to the mail delivery channel, which was one of the main sources of customer dissatisfaction in the earlier development. He also grew
Victoria’s Secret’s presence geographically and expanded its product lines to include swimwear, bath and body products, etc. This carefully staged approach to developing a robust ecosystem served Wexner well. By the mid-1990s, Victoria’s Secret was a well-known presence across the United States and had a store in almost every large shopping mall.

Roy Raymond established the basis for the Victoria’s Secret innovation, but Wexner was the one to commercialize it and expand it beyond a Minimum Viable Footprint into a full roll out of the value proposition. He leveraged elements of what Raymond started and added additional channels, products, and value. Victoria’s Secret currently has a much more robust value chain than what Roy Raymond initially developed:

Now, after products are designed, they go through a vigorous test / pilot process to see what consumer reception would be like. Products are repeatedly iterated upon before they are approved (if at all) for mass production and distribution through Victoria’s Secrets store, website, or mail channelsxvi. To help balance the additional complexity, the company has become almost fully vertically-integrated. It now has a design team headquartered in New York and is able to maintain significant control over its value chainxvii.

IV) Multi-Channel Strategy
Today, many retailers struggle with creating the right strategy to align their different channels to maximize the financial return from their customers. For instance, Walmart completely separates its .com business from the brick and mortar stores, treating each medium’s shoppers as different customers, each team in a different state with a different marketing team. Target, on the other hand, adjusts as it goes in integrating the site, mobile and brick and mortar to provide its customers with a holistic experience. The results are mixed. Thus we can see that Victoria’s Secret was well before its time when it decided to embrace a multi-channeling strategy in the 1990s, as it recognized the synergies that such a strategy would bring. It recognized that the benefits that customers would receive through multi-channeling went far beyond simply having additional sources of
communication with the retailer. And for the retailer itself, the prospect was of significantly higher revenue. One study in particular indicated that multi-channel customers spent between two to three times more than single channel customersxviii. But the change toward multi-channel strategy was far beyond a change in vision and aspirations. There was much complication in the execution of multi-channeling. For one, retailers have to manage a very high number of SKUs. SKUs have different vendors, different end users, different logistics, etc. Also, the merchandising mix was different for each channel. The VS stores, which were the face of the company, offered the core VS products, such as lingerie, sleepwear, and VS Beauty stores only sold beauty products. The catalogue and web channels offered these same core products, but also carried women’s apparel. So women could purchase substitute or compliment their purchases via the catalogue and web store. Although the stores continued to be the face of the brand, with 75% of all salesxix, it was also an essential component of the catalogue and online experiences. Many customers would have the enchanting store experience, get measured, try on pieces at the store, and make their purchases at the store, but then they would purchase replacements via the web store or the catalogue. In addition, boyfriends and husbands would make purchases on the web store, something they would not be comfortable doing in a store. The web store specifically had the purpose of strengthening and supporting the Victoria’s Secret brand and consequently enabling the brand to surpass its sales goals. The leadership of the company backed these goals with sizable resources; the original web store cost the company five million dollarsxx. This investment enabled the Victoria’s Secret web store to grow very quickly, moving as aggressively as the stores had moved when the brand was launched. The financial investment continued to grow with promotions, and changes in its advertisement approach to bring customers to its web store. The Victoria’s Secret fashion show was annually held in New York, but in 1999 the company decided to provide the real-time streaming video of the Victoria’s Secret annual fashion on its web store. The cost for this live streaming went far beyond the streaming itself, to include TV spots, internet banner ads, print ads in newspapers, and a teaser advertisement during the Superbowl. This advertisement was the first .com ad in the Superbowlxxi- a risk that paid off. The teaser produced one million web
store hits in thirty minutes, and the event itself won Brandweek’s Interactive Marketing Awards for Best Marketing Eventxxii. This is particularly impressive given that the demand was so high that the internet infrastructure wasn’t able to meet demands during the show, crashing networks all over the country. Investments in its web store resulted in a sales growth from nothing to $200 million in 2001xxiii. These numbers were generated from new customer, and increases order sizes and purchase rates by existing customers. Beyond the investment in the web store, Victoria’s Secret was very intentional about integrating the catalogue and the web store, positioning both mediums as part of a holistic support for the brand and the store. For starters, the web store and the catalogue were administered as onexxiv. From the distribution outlook, it leveraged the infrastructure in place like a call center, filling out both web store and catalogue orders from the same centrally located warehouse. In the same manner, the company integrated its different channels, for instance, allowing customers to enter a product’s catalogue number to find the item on the web store. It also segmented its customers, delivering specific messages to them depending on their location, later augmenting the strategy throughout its campaign. The distribution of catalogues was then timed with its e-mails, so that a customer who indicated preferences for clothing would receive an email about a clothing sale and the most recent clothing cataloguexxv.

Furthermore, the company took steps to use its customer database to improve synergy between it’s the brick and mortar stores, the web stores and the catalogues. The company built a robust database with information on ten million of its usersxxvi. The databases e-mail addresses from customers that shopped for each channel were merged to build a cross-channel database, and leveraged this information to allocate appropriate advertising and make cost decisions, such as whether someone would receive a catalogue, and what kind of catalogue it would be. Victoria’s Secret integrated its channels in a manner that is quite unique, in which retailers still struggle to successfully accomplish today. Nonetheless, by 2001, this multi-channel strategy still had its shortcomings. Although the president of Victoria’s Secret Stores work closely with the President of the Web Store and Catalogue, their P&L were separate. This means that nether president had the power to bring about full scale changes to the brand, and particularly regarding merchandising, the soul of any retailer. This limitation left much unexplored room for optimization in Victoria’s Secret multi-channel strategy. V) Firm Differentiation and Value Creation

Beginning with founder Roy Raymond’s vision in 1977, Victoria’s Secret has positioned itself as a boudoir-style lingerie showroom with an atmosphere that is a significant cry from the fluorescent-lighting-laden corners of department stores that have represented the traditional lingerie sales model. Victoria’s Secret entered the market as a standalone chain lingerie store in a time when no true competitors existed in this marketplace. The aim of Victoria’s Secret was to provide a place where men could comfortably purchase lingerie for women; Raymond started the company because he felt awkward shopping for lingerie in a department-store environment.

One of the challenges VS faced in entering the marketplace ended up being one of its major opportunities. At the time VS was founded, there was not much differentiation within the lingerie industry. As noted in the case “Victoria’s Secret,” “In the past, intimate apparel rarely generated much enthusiasm in the business community. The sameness of the product in style, fit, and price made it difficult for consumers to discern the difference between national brands and generic labels.”xxvii Meanwhile, intimate apparel has historically made up a sizeable percentage of the women’s apparel industry. Victoria’s Secret was the first lingerie retailer to exploit the lack of recognizable brand names in the marketplace

The Victoria’s Secret Fashion Show was one way in which the company took a unique approach to marketing itself. Traditionally, runway shows had usually been reserved for higher-end brands, and, if televised, were aired on non-network channels (such as VH1, which showcased designer runways on its FT – Fashion Television program). The first Victoria’s Secret Fashion Show which featured iconic models Stephanie Seymour, Beverly Peele, Veronica Webb, and Frederique van der Wal, was held in 1995 at New York City’s Plaza Hotelxxviii. The following year, other big-name models, including Tyra Banks, Naomi Campbell, and Helena Christensen joined the group; many more top models have been added to the roster since then. The first four annual shows were not broadcast nationally, but in 1999, the show was streamed online for the first time. By 2001, the full opportunity presented by the show was recognized, and the 2001 edition was broadcast on ABC. Since 2002, the show, which continues to take place each year, has been broadcast nationally on CBS.

In addition to the shows overall, the annual Fantasy Bra has added to the aspirational nature of the brand. Each year, one model in the show is chosen to wear a high-dollar-value bra adorned with expensive jewels. The most expensive Fantasy Bra to date is the $15 million Red Hot Fantasy Bra worn by Gisele Bundchen in 2000. While no Fantasy Bra has ever sold (since the line debuted in 1996), the attention garnered by the annual unveiling of this bra at the VS Fashion Show A major marketing differentiator for VS has been its Angels, a group of top supermodels who, individually, represent brands nearly as big as Victoria’s Secret itself. The Angels have included Banks, Christensen, and Seymour, along with Alessandra Ambrosio, Gisele Bündchen, Laetitia Casta, and Heidi Klum, among other top models. Victoria’s Secret’s decision to incorporate some of the biggest models in the world into its shows has been instrumental in the evolution of VS as an aspirational brand. (The models who participate in the VS Fashion Show are known as Runway Angels.) Traditionally, big-name models have rarely had such close associations with mass-market retail brands, and Victoria’s Secret has used its relationships with top supermodels to communicate a Victoria’s Secret lifestyle proposition to consumers. Victoria’s Secret has also appealed to college-aged women through its PINK line, which includes not only includes age-appropriate undergarments, but also officially-licensed university-themed merchandise – and has recently been expanded to include officially-licensed NFL merchandise as well. The PINK line has been successful in recruiting younger consumers to the brand and developing brand loyalty among them that translates to purchases of Victoria’s Secret’s higher-end lingerie, targeted at a slightly more mature consumer.

One remarkable facet of Victoria’s Secret’s success has been its emphasis on employing high technology in developing new bras. Victoria’s Secret has a history of profound innovation in the lingerie industry. While intimate apparel may not seem, on first glance, to be an industry requiring high-level technology, innovative bra design has become increasingly important for biological reasons, and Victoria’s Secret has arguably done more to design and market the necessary technology than any of its competitors. As noted in Discover magazine, “Poor eating habits, as well as breast implants and the estrogens in birth-control pills, have led to an increase in the past 15 years of more than one bra size for the average American woman—from a 34B to a 36C. For many women, this has been a burdensome trend. A pair of D-cup breasts weighs between 15 and 23 pounds—the equivalent of carrying around two small turkeys. The larger the breasts, the more they move and the greater the discomfort.” Victoria’s Secret’s collections have included innovative lines such as the Miracle Bra, the IPEX, the Infinity Edge, and the Secret Embrace. The IPEX launched in 2004 and was promoted as “the remarkable achievement of an international collaboration of designers, engineers and technicians using the latest in digital and laser technology and proprietary manufacturing processes.”xxix The IPEX appealed to consumers because it was a very lightweight bra that nonetheless provided full coverage in the form of a graduated pad that was light around the edges and fuller in the center of each cup. Even the name of the IPEX was designed to communicate that the product was high-tech and pushing the boundaries in terms of expectations consumers previously held for lingerie. The IPEX has since been discontinued, but a new innovation called the Showstopper bra, featuring a similar value proposition but a different marketing approach – one that focuses on appearance rather than fit – launched in August 2011.

One of Victoria’s Secret’s other recent innovations, which has received considerable media attention, is the Miraculous Bra, which launched in late 2009. The Miraculous Bra’s differentiator is that it promises to increase the appearance of the wearer’s bra size by two While some argue that wearing such a bra is deceptive to people who might see you without it later on, the value proposition of the Miraculous Bra is that it offers consumers additional confidence for a $50-60 price tag. A valuable service offered by Victoria’s Secret is the availability of trained salespeople in the store who will measure consumers to ensure that the bras they purchase are the proper size. It is often reported that between 70% and 85% of women who wear bras are wearing the wrong size.xxxi Victoria’s Secret enables its customers to more comfortably wear the company’s merchandise, which likely translates to a better bra experience and increased consumer loyalty to the brand. The boudoir feel of Victoria’s Secret stores make what could be an uncomfortable experience tangibly more bearable, and the black suits worn by VS employees make the experience feel less like an awkward occasion in which one is forced to stand topless in front of a stranger and more like the rendering of a professional service like any other.

VI) Expectations for Market Growth
Currently Victoria Secret is well positioned as a market leader. To assess its future competitiveness and ability to remain an industry an industry leader, one must look at the competitive landscape including current direct competitors and the changing business environment.

Competitive Landscape:
Frederick’s of Hollywood is Victoria Secret’s most comprehensive competitor. The Lingerie retailer sells products that include its flagship lingerie line, the bra and panty undergarments, and its beauty line that consists of an assortment of lotions and spraysxxxii. Frederick’s has attempted to adopt many of Victoria Secret’s strategy. Its 200 boutique stores across the United States have captured customers that do not feel comfortable using large department stores to purchase their intimate apparel. Fredericks Catalogue and Website operations have provided access to additional clientele. Although Both Victoria secret and Fredrick sell similar products through comparable channels, the two companies have very distinct points of difference. Frederick’s market’s itself with racier, adult imagexxxiii. Its overly reveling clothing and use of romantic black and red colors make it less appealing to younger teenage customers whom prefer more colorful patterns for their undergarments. This pigeon hold’s Fredericks into a more adult audience. Victoria Secret’s ability to capture both teenage and adult shoppers has created a sense of brand loyalty prevents its customers from switching to Fredericks as adults. With lines such as Victoria Secret’s “Pink,” the company has tapped into the demands of multiple age groups and to created price appropriate products xxxiv. As a result Frederick’s of Hollywood is left with only a small subset of customers and not a true threat to Limited Brand’s Victoria Secret empire. Agent Provocateur is Victoria Secret’s newest competitor and biggest threat. Founded in 1994, Agent Provocateur has skillfully walked the line between acceptable and indecent for main stream salesxxxv.

The company provides the same array of products as Victoria Secret but has captured the lion’s share of the high end and international markets. Similarly to Frederick’s of Hollywood, Agent Provocateur is solely in the adult markets but due to its tastefully sensual style and premium perception it has the ability transition Victoria secret customers to the UK company once they come of age. An additional threat, is Agent Provocateur’s brand name is growing fast and if choose to go down stream and enter younger markets with teenage pajamas and undergarments, Victoria secret could be seen as “their mommy’s brand” and lose its luster. La Perla, a lingerie company established in the 1950’s has positioned itself as a high end luxury brand. Similar to Victoria Secret, La Perla has used innovation and product expansion to grow the business throughout the decadesxxxvi. Although La Perla is known as a quality brand with a breadth of products, it has not moved down stream to meet customers at age group and at multiple price points. This makes La Perla a direct competitor to Agent Provocateur but not a true threat to the Victoria Secret Franchise. Department stores sell a number of brands at multiple price points providing the variety that is needed for its diverse customer base. Customers use department stores for more practical purchases; such as comfortable bras and other undergarments. Department stores fail to deliver the same aesthetic appeal that Victoria Secret has mastered. Department stores have also failed to find a solution to the awkward feeling men have when walking through the intimate sections. At their core, department stores are family shopping depots with sub-standard customer service. Victoria Secret differentiates itself from by creating comfortable, helpful store experiences that helps to put all customers at ease when shopping in their locations.

Future Market Capture:
With Agent Provocateur as Victoria Secret’s only threatening competitor, it won’t be a traditional competitor that could uproot the status quo. The real threat is the changing market place. Although Victoria Secret as thrived for years using their multi-channel strategy to keep customer awareness high and their products accessible. The Victoria Secret store is a staple in most malls across the country. Through excellent customer service helping to create a first rate shopping experience, Victoria Secret is able to capture and create loyal customers. The threat facing future growth is the shift to online shopping. Victoria Secret has answered this threat by standing behind the strength of their catalogue as both a marketing and shopping tool coupled with their dynamic websitexxxvii. The winner in this space will be the company that is able to utilizing its channels to create products that meet multiple age brackets and allow their consumers to grow with the companyxxxviii. Victoria Secret is well ahead of the curve in this area making it difficult to dethrone them moving forward.

Did not find what you wanted? Get help from our experts.

Find a Perfect and Reliable Professional Essay Writer Helper to write your essay for a Reasonable Price.

best essay writing service

Need help with your Assignment?

Give us your paper requirements,and we’ll deliver the highest-quality essay at only $13 a page.

Some of the free features you will receive:

Find a perfect and reliable professional for your essay writing needs.

Essay Writing Services

If you are a student who is struggling to meet tight deadlines, we are here to help! Do you need to employ an essay writing service? Hire us if you want the best essays. We are a dedicated staff of professional, well-seasoned, and superb essay writer helpers.

Dissertation Writing Services

Did you know we provide the best dissertation writing service on the internet? We continue to receive favorable feedback from our consumers about the excellent work we produce. So, instead of worrying about whom to pay for the dissertation, contact us. We are a dedicated staff of professional, well-seasoned, and superb essay writer helpers.

Assignment Writing Services

We attempt to provide the essay help you require ensuring, that your papers are of the highest quality. When you decide to work with us, we assess your requirements and find the best writer to assist you with your essay. We are a dedicated staff of professional, well-seasoned, and superb essay writer helpers.

Nursing Essays Writing Services

Here’s how it works: you place an order for a nursing essay, and we deliver. It’s as easy as it sounds. This is workable because we have the greatest professional paper writers that are both quick and skilled. We will assign your assignment to the most qualified writer

Coursework Writing Help

Our staff of qualified and professional paper writers has continuously distinguished us as the best coursework writing help service. They are all-natural English speakers with advanced degrees in a variety of professions. We offer the best essay writing services.

Article Writing Services

Our knowledgeable and expert article writing paper writers have advanced degrees in a variety of subjects. We will assign the most appropriate one to you based on the field and topic of your article review. They are all fluent English speakers who fully grasp your requirements. We are a dedicated staff of professional, well-seasoned, and superb essay writer helpers

You May Also Like…

Violence in Sports Essay Sample

Violence in Sports Essay Sample

Violence in Sports Essay Sample From an outsider's perspective, it is hard to understand the social aspect of a sports...