First Draft and Formative Feedback
February 28, 2019
Victoria’s Secret
1 Executive Summary
This report looks into the current market
position of the brand Victoria’s Secret, analysing its strengths and weaknesses
and thus recommending ways it can progress as a successful lingerie brand
against current competitors.
The report is constructed from both primary and
secondary research, with primary data ranging from in-store visits and
comparisons, as well as surveys and interviews. Secondary research includes
data from Mintel and other websites, articles and various social media
analysis.
2.0 Introduction
2.1 Brand Overview
Victoria’s Secret is the leading American lingerie
retailer (Condé Nast, 2018) which carries a sexually provocative aesthetic.
First establishing itself in the USA, Victoria’s Secret as a brand has grown
massively and expanded globally over the past few decades, thanks to their
iconic fashion shows and supermodel endorsement.
In recent years Victoria’s Secret has faced
challenges within the fashion industry; from inclusivity issues, to debate
about their ethical values. This has led to a significant drop in sales,
‘Victoria's Secret saw its fiscal third-quarter operating income tumble 89%, or
a whopping $120 million, to $14.2 million.’ (A. Cheng, 2018). These losses could be due to unsuccessful marketing strategies,
and a lack of adaptation within the brand.
This marketing report will explore the current
marketing strategies put into place by Victoria’s Secret, whilst
also analysing the strategies of competitors and looking into reasons
why Victoria’s Secret is declining as a brand. The report will then go on to
discuss recommendations including new marketing strategies that should be
implemented to help Victoria’s Secret develop to succeed within the current
market, based on the research gathered.
2.2 Brand Timeline
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2.3 Brand Background
Victoria’s Secret was founded in 1977 by
businessman Roy Raymond to combat the “racks of terry-cloth robes and ugly
floral-print nylon nightgowns” (Newsweek, 1981) he encountered when lingerie shopping
for his wife. The name ‘Victoria’ is based off Queen Victoria, to give a
“fanciful” and “private” (Vogue, 1992) illusion, and the Victorian-esque decor followed, to “impart the sense of class and dignity
associated with the Victorian era” (Time, 2015).
Although Victoria’s Secret is a brand that is still
loved by many, they are faced with a lot of competition from both high-street
and online lingerie retailers. In recent years, the brand has begun to crumble
under the new market of increased diversity and inclusivity that Victoria’s
Secret does not exhibit. With fresh brands which promote body-positivity
like SavagexFenty and Aerie on the rise, consumers are looking away from Victoria’s Secret’s
perfect aesthetic and high prices.
2.4 Objectives
This report will investigate into the current
market position of Victoria’s Secret, analysing the successful and
unsuccessful strategies the brand currently uses, including product selection
and social media and influencer marketing. Research will then be done into the
brand’s competitors, and why they have an advantage over Victoria’s Secret.
Finally, new strategies will be suggested with an overall clear recommendation
being made to help Victoria’s Secret become more appealing to the modern consumer.
3 Macro Economic Analysis
There are a variety of factors to consider when
evaluating a company’s success in the fashion market. Marketing communications
management is complex and uncertain, because of the nature of marketing variables,
including political, economic, social, technological, environmental and legal
factors (Chris Fill, 2013).
At current, the future of the market in the UK is
very uncertain due to Brexit. Although Victoria’s Secret is an American brand,
they currently have many stores in the UK, including a flagship store on Bond
Street. Trade barriers could be modified as the UK gains independence, as well
as the value of the pound coin fluctuating throughout the duration of the
Brexit timeline, and this uncertainty could make foreign companies such as
Victoria’s Secret apprehensive to trade within the UK.
With online-exclusive retailers on the rise, and
brick-and-mortar shops transferring to online and apps, Victoria’s Secret faces
added pressure to keep up with the current market. As for social media,
Victoria’s Secret has a high follower count, but low engagement rate. This may
be due to the lack of influencers featured on their page or doing sponsored
posts.
4 Brand Market Position
Victoria’s Secret has a very strong brand image,
with over 1500 stores worldwide in over 80 countries, making many consumers are
aware of the brand’s presence. This, combined with the world-famous Victoria’s
Secret fashion show, has made the brand the leading US lingerie retailer.
Recently, the brand has faced backlash from
consumers for being transphobic and exclusive of certain body-types,
particularly within the Victoria’s Secret fashion shows, resulting in the
number of viewers to drop from 5 million in 2017 to 3.3 million in 2018.
Despite knowing Victoria’s Secret does not use transgender or plus-size models,
72% of people would continue to shop from the brand, meaning they have a loyal
fanbase (appendix 1). This has the potential to change however, especially with
more inclusive brands such SavagexFenty on the rise, and consumers are beginning to look elsewhere for
their lingerie. Victoria’s Secret has the potential to capitalise on the plus
size market, especially as it continues to grow and gain importance, in order to
attract more audiences.
5.0 Competitors
5.1 Competitor Analysis
Although Victoria’s Secret has a strong presence in
the US, it is still overshadowed by big retailers such as M&S and Primark
in the UK (appendix 2) and faces competition from online-exclusive retailers
with competitive pricing (appendix 3). Many of their competitors use influencer
marketing, such as reposts and paid collaborations, whereas Victoria’s Secret
only use their own ‘angels’ in campaigns and on social media.
As mentioned before, Victoria’s Secret has a lot of competition from
inclusive lingerie retailers which promote body positivity, such as Aerie and SavagexFenty. Millennials are more likely to shop from places that
promote inclusivity, with 48% expressing they “try to use brands of companies that are active in supporting social
causes”, according to a BCG survey. Both brands have
created campaigns featuring plus-sized models, from a range of ethnic
backgrounds, which Victoria’s Secret is yet to do.
5.2 Brand Positioning Map
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At the top end of the map is high-end lingerie
retailers such as La Perla and Agent Provocateur. Both brands carry a luxury aesthetic
at a high price point, with a high-quality finish. At the lower end is
high-street retailers such as Primark and H&M, who focus more on
fast-fashion and trend over quality.
Victoria’s Secret has been placed somewhat in the
middle, on the lower quality side but high price end. This is because
Victoria’s Secret is like the high-street stores in which they produce the
trends quickly and are manufactured in sweatshops, but many people believe they
are overpriced for the quality they are receiving. In a survey with Wells
Fargo, 58% of consumers who had shopped there less in the last year said it was
because of high prices.
5.3 Current
Brand Marketing Position and Competitors
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6.0 Consumer Demographic
6.1
Consumer Overview
Victoria’s Secret is a brand which
portrays itself to be very sexually provocative and luxurious. However,
according to a Condé Nast survey, Victoria’s Secret was the favourite brand of
Millennial and Gen Z consumers (girls aged 13-34). This could be due to the
association of the brand with ‘it girls’, such as Kendall Jenner and the
Hadids, who young audiences look up to, as well as so closely linking
Victoria’s Secret with their sister brand PINK, which is specifically aimed at
younger audiences. With the way that Victoria’s Secret brand themselves
combined with their high pricing, it is alarming that their consumer
demographic is so low.
Most Gen Z consumers and a
proportion of Millennials are students, and therefore do not have much of a
disposable income. This can make revenue for Victoria’s Secret unstable, as
political factors such as rising tuition fees may affect the amount of money
consumers are spending on lingerie.
It is also controversial that a
shop as highly sexualised as Victoria’s Secret is attracting such a young
audience. With the promotion of extremely fit models, combined with a sexually
provocative aesthetic, Victoria’s Secret are sending out the wrong message and
not catering to their target demographic.
6.2
Current Consumer Demographics
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