The lower allure of sexual marketing (diversity and inclusiveness themes not adopted), new DTC entrants (women operated brands with newer categories), rise in online shopping (lower footfall making expensive locations inoperable), and a failure to expand to new categories were the primary drivers of the demise of the once-powerful Victoria's Secret.
In today's post, we take a brief look at the history of Victoria's secret, look at the reasons that led to the demise of the brand, and look at lessons others can learn from the failures of VS.
A brief introduction to Victoria's Secret
Before we start the story, let us have a look at the brief background of this legendary brand. Victoria's Secret was started in 1977 by Roy Raymond who got the idea on the occasion of his visit to a store to buy underwear for his wife. By 1982, the firm was nearing bankruptcy with $4 million in topline, when Les Wexner, founder of L Brands, stepped in and acquired this brand. There was a rapid store expansion of VS and by 1990, the firm had $1 billion in topline.
In 1995, the company, on its path to cement its image, started airing its Annual Fashion Show on the internet, which became an overnight sensation. There were two important aspects of these fashion shows. Firstly, VS used to endorse sexual marketing which was the recurrent theme of the time, with all communications and efforts focussed on sexual marketing. Second, these fashion shows used to drive a lot of traffic to stores, as customers flocked the stores for a purchase
What killed Victoria's Secret?
There are broadly four major issues that caused the demise of Victoria's secret.
1. Rise of online shopping: With Amazon and other e-tailers taking over the world, Americans have become more comfortable at shopping online. The planned purchase behaviour exhibited by the customer has been solved by online players where the customer can choose from an infinite catalog and the correct measurement which has led to lower footfall in VS stores. Since the stores used to be situated in high-end malls, the rent per square feet is too prohibitive which coupled with lower footfall hurt the firm's operating performance.
2. Failure to expand in new categories: With the sports-based women athleisure becoming the trend of the times, VS failed to capitalize on these trends and never expanded to newer categories. They were too comfortable in operating in segments with the longer fashion cycles which does not require a complex supply chain to cater to the demand
3. New competition with D2C brands: With lingerie shopping a planned purchase, it is exhausting for most women. A couple of D2C brands Third Love, Savage X Fenty which are founded and operated by women are solving these problems along with introducing newer categories and solving the problem for the women while sitting at their home.
4. Lowering allure of the sexual marketing phenomena: One thing which has led the spiraling of VS the most is its overemphasis on sexual marketing. The fashion show by VS was based on the same theme. However, the newer constructs which were attracting the audience were the diversity and representation of all types of people. For the biggest brands, this shift has been the most difficult part of their marketing communication (for instance P&G). VS failed to alter this image and communicate the authenticity and inclusiveness to the customers
Apart from these reasons, the association of Wexner family with Jeffery Epstein was another PR disaster that was highly criticized by its customers.
Lessons for the future
Here is this story which strengthens Clayton Christensen’s Innovator Dilemma where small upstarts started with a niche. Victoria Secret was too comfortable in its own sphere and did not see enough market opportunity in upending these upstarts. Hence these upstarts became so big and agile that they started appealing to the customers more than VS. A humble lesson for giants like VS is to keep their ears on the ground or else face the risk of getting disrupted
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About the Author: The post is written by our EZPP partner Manu Jindal. Manu is a graduate from IIM Calcutta, currently working with Airtel Labs. He writes about Payments & New Tech at ZappChai.