Victoria’s Secret knows what its customers want.
When parent company L Brands announced plans earlier this year to cut the retailer’s catalog and exit the swimwear business, its stock price declined amid concerns that sales would fall. But loyalty goes a long way. According to The NPD Group’s Victoria Secret Playbook report, more than 25 percent of all in-store and online intimate apparel shoppers buy bras or panties from Victoria’s Secret.
The report also pointed out that while Victoria’s Secret customers do shop at other stores, they spend 72 percent of their intimates budget at the retailer’s stores and 85 percent of their digital intimates wallet at victoriassecret.com. In fact, the Victoria’s Secret buyer spends roughly $40 to $60 more than the average intimates shopper, across all intimates categories, thanks to higher purchase frequency and higher average selling prices.
“The exclusive and differentiated merchandising mix that Victoria’s Secret offers shoppers has led to a unique breed of consumer that is extremely loyal,” NPD Group’s chief industry analyst, Marshal Cohen, said. “Victoria’s Secret is an intimates industry leader because of the consumer culture they have nurtured and the way they bring passion back to the shopping equation.”
L Brands showed static second quarter results without much movement across earnings per share, operating income and net sales. Despite a mediocre quarter, devoted customers are helping Victoria’s Secret stay in place as one of the top intimate apparel brands.
“A best-in-class example has been set by Victoria’s Secret in their ability to capture a consumer, keep that consumer, and continually drive them to shop both stores and online,” Cohen added. “As they look to grow their role in the important active and sports segment of the intimates market, it will be more critical than ever for Victoria’s Secret to continue to nurture and leverage their relationship with their consumers.”
Intimate apparel is no longer limited to being worn under clothes and it’s also part of the booming athleisure market, presenting Victoria’s Secret with the perfect opportunity to increase its market share. But rival retailers, including Aerie, are giving the old guard a run for their money.
Following the launch of its unretouched model campaign two years ago, the teen retailer has experienced major success in the intimates market, with a recent 24 percent increase in comparable sales in the second quarter ended July 30. With a focus on young female shoppers, Aerie offers bras, loungewear and panties that don’t compensate comfort and functionality. Since the majority of parents take part in teen’s purchases, Aerie has also won favor of this shopper demographic as well, since it promotes body positivity in its advertising and merchandise, compared with Victoria’s Secret’s sexy image.
Considering that 41 percent of millennials wear a sports bra at least once a week, there’s no question that intimates brands need to shape up their branding and services to lock in devoted consumers. Despite the fact that new consumers may help a little, retailers may want to consider their loyal consumers for long-term prosperity.