After trying to rebrand themselves as more inclusive and diverse, Victoria’s Secret will be taking a more moderate approach after sales plummeted.
Victoria’s Secret’s Radical Transformation
Victoria’s Secret, the American lingerie giant, underwent a two-year transformation.
The goal was to shed its hyper-sexualized image, regain cultural relevance, and appeal to younger consumers after consumers had been turning to trendier competitors like Savage X Fenty and Parade.
Mixed Results Despite Rebranding
While there have been certain achievements, such as the campaign introducing the “new” Victoria’s Secret with notable figures like soccer player Megan Rapinoe and transgender model Valentina Sampaio, these favorable reviews from online critics haven’t translated into tangible sales.
Sales Are Dropping
The brand anticipates a projected revenue of $6.2 billion for the current fiscal year, marking a 5% decline from the previous year and a substantial drop from the $7.5 billion it earned in 2020.
Recent Campaigns and Brand Ambassadors
Recent marketing endeavors have featured models like Hailey Bieber and Emily Ratajkowski, who could have seamlessly fit into the Victoria’s Secret lineup from 2007.
The brand also embraced new ambassadors, including plus-size models like Paloma Elsesser and Ali Tate-Cutler.
The Vision for the Future
During a recent presentation to investors in New York, Victoria’s Secret’s vision for its future became evident.
‘Sexiness Can Be Inclusive’
Brand president Greg Unis of Victoria’s Secret and its sub-brand Pink emphasized that “sexiness can be inclusive.”
The brand is now prioritizing inclusivity and celebrating the diverse experiences of its customers.
A Focus on Profitability and Growth
The central goal of this transformation is to enhance profitability and surpass the $7 billion mark in annual sales.
To achieve this, the brand is diversifying into new product categories, particularly activewear and swimwear.
Modernizing and Cost-Cutting
It plans to modernize its approximately 1,400 Victoria’s Secret and Pink stores and open 400 new global locations.
Cost-cutting measures are also being implemented, and there’s an apparent emphasis on reducing risks related to the brand’s image.
Challenges and Market Dynamics
CEO Martin Waters acknowledged challenges within the retail sector, citing a shift among consumers towards off-price alternatives due to economic pressures caused by inflation.
Expanding Product Offerings
To lure back customers, Victoria’s Secret is expanding its product range beyond traditional lingerie, including bras, underwear, and sleepwear.
The brand is reintroducing swimwear and activewear, two categories it had abandoned in recent years.
Shrinking Numbers of Activewear
It was revealed that activewear, at one point, accounted for $500 million in revenue for the company, with a substantial 16% share of the sports bra market.
Today, this segment has shrunk considerably, capturing only 4% of the sports bra market.
Broadening the Apparel Range
The brand plans to enhance its offerings in other apparel categories, encompassing loungewear, sweaters, slip dresses, and corset tops, all complementing its core strength in sleepwear and lingerie.
Pink, a sub-brand under Victoria’s Secret, will focus on improving its selection of fleeces, sweatpants, tracksuits, and casual pieces.
Revamping the In-Store Experience
A remarkable transformation from the Victoria’s Secret of the past involves the appearance of its brick-and-mortar stores.
The brand commenced the renovation of its retail locations in 2021, discarding the formerly dark and austere store atmosphere, which was trendy in the 2000s but no longer resonates with modern consumers.
The ‘Store of the Future’
The “store of the future” is designed to feature brighter, more welcoming lighting, softer decor, wider entryways, and an overall inviting atmosphere.
The fixtures within stores have been made smaller and more rounded, painted in a soft pink hue to foster intimacy with consumers.
Challenges From Digital Disruptors
Victoria’s Secret’s modern transformation was prompted, in part, by the competition posed by digital-native brands, such as ThirdLove and Parade.
These newcomers enticed consumers with inclusive marketing and progressive language.
Changing Dynamics of Disruption
However, the threat posed by digital disruptors has waned recently, given the struggles in the direct-to-consumer sector and the growing unsustainability of digital marketing costs for brands with exclusive e-commerce models.
Despite the diminishing threat from some disruptors, brands like Rihanna’s Savage X Fenty and Aerie continue to be strong contenders, especially among younger consumers.
Skims Is a Major Challenger
Additionally, a potentially more formidable challenger is emerging—Skims, the shapewear brand co-founded by Kim Kardashian.
Skims recently secured funding in July at a remarkable $4 billion valuation.
While Skims’ projected $750 million in sales this year falls below Victoria’s Secret’s $6 billion-plus, it positions itself ahead of many other potential challengers.
An initial public offering (IPO) could provide Skims with the resources to aggressively expand its presence, potentially taking on Victoria’s Secret directly.
Conservative Approach to Apparel
Greg Unis maintains that Victoria’s Secret’s entry into new apparel categories will follow a conservative approach, marked by a test-and-learn strategy.
Claiming Market Share
Despite the challenges faced, Victoria’s Secret still boasts the title of the largest underwear retailer in North America, commanding around 20% of the market share, as per its own analysis.
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Brandon Grayson is a passionate and influential writer who specializes in issues of equality, health, and human rights. Their work, characterized by its depth and empathy, delves into complex social issues, advocating for change and understanding.