A) History of the Company
“Victoria's Secret is inspired by a love for lingerie, and the desire to bring beauty—and fantasy—into every woman’s wardrobe. We believe little luxuries are of grand importance. And what’s closest to your body is always closest to our heart” (Victoria’s Secret Facebook page).
Victoria’s Secret was originally founded in 1977 by Roy Raymond; the store was opened in San Francisco. The reason he opened the store was because he always felt uncomfortable shopping for lingerie for his wife, so he wanted to create a more comfortable atmosphere using Victorian details and helpful sales staff. He later opened up a few more stores and started a mail-order catalogue. In 1982 Leslie Wexner, the founder of The Limited, bought Victoria’s Secret and its catalogue for $1 million to add to his current collection of brands already owned. In 1998 Victoria’s Secret launched VictoriasSecret.com, which is one of the fastest growing and most profitable e-commerce on the Internet. As of January Victoria’s Secret stores had a Net Sales of over $4 billion and the catalogue and Internet site combined for over $1 billion (limitedbrands.com).
There are currently over 1,000 Victoria’s Secret stores, we choose to focus on the couple in the Cincinnati area. We interviewed Liz Papa a PINK category Supervisor at Victoria’s Secret in Rookwood Commons. We also looked at the Victoria’s Secret in Kenwood and the PINK store in Kenwood. Liz informed us that the growth of her Victoria’s Secret location, along with the other locations, work off of a tier system. They move up tiers by their sales for that location. Her store, since she has been working there, has gone from a “One to Two Million Dollar Store” to a “Two to Four Million Dollar Store.” With moving up in tiers the store receives more roles, like employees and managers.
A most obvious business change over the past years for Victoria’s Secret has been the added private label of PINK. PINK has also been an expansion of their brand that allows them to go after new target markets. PINK has allowed them to tap into the college/University market as well as the sports market. Liz’s title of PINK category Supervisor just goes to show how the business has changed over the years. The store not only is focused on selling Victoria’s Secret’s merchandise, but now PINK’s merchandise as well. Since PINK was founded in 2004 it has helped give Victoria’s Secret different retail strategies. B. Retail Strategy
1. Who is their target market?
The target market of VS can be divided into two sections as per its brands. VS targets teen girls and college-age females for its private label PINK, and hopes these young females take up its VS brand once they mature. In general for VS, the target market is any female who wants to look and feel beautiful. Based on the price offering it could be said that the consumers of VS belong to middle-income to rich families. VS does target young men for its men’s fragrance products. As per the interview, the Rookwood Commons’ VS manager believes that their target market is mainly new moms who want to update their lingerie wardrobes. Also, for that particular store location, the store caters to UC students, Xavier students, and moms who are shopping during the middle of the day with strollers. 2. Merchandise Assortment
VS’s major brands are VS under which various collections like The Showstopper by VS, Cotton Lingerie, and Gorgeous Collection are sold, and PINK. Since VS is also a privately owned store it doesn’t carry any other brands besides its own. But its online store does sell shoes from other brands like Steve Madden, UGG Australia, handbags and accessories from BCBG, and items from Kelsi Dagger. VS does have a few private brands. Its biggest private label is PINK which has products like bras, panties, sleepwear, travel and accessories, and beauty products. Along with VS as a private label and name of the...