History of Victoria's Secret

In 1977, a Graduate Student named Roy Raymond, from Stanford Graduate School of Business, felt embarrassed when it came to purchasing lingerie from a department store.  Roy decided to open a store to make a man feel comfortable when purchasing women's lingerie.  He decided to open his first store at the Stanford Shopping Center, creating Victoria's Secret.  Soon to follow was a mail-order catalog and three other Victoria's Secret Stores.  Victoria's Secret is now owned by Limited Brands and there are over 1,000 Victoria's Secret stores and over 100 independent Victoria's Secret Beauty Stores in 49 states, Puerto Pico, and Canada.  The brand is now based out of Reynoldsburg, Ohio and they specialize in lingerie, swimwear, beauty products, sleepwear, hosiery, etc.    

Value Proposition

Victoria's Secret is a value-based company.  Their mission is to make their customers feel sexy, sophisticated and forever young.  They acknowledge their responsibility to deliver on that promise by providing high-quality, safe and effective products in all of their brands.  While their parent company, Limited Brands, offers a broad array of products from perfumes to collegiate dorm wear, they apply the same, disciplined approach to all of their products when it comes to quality and protecting their customers.  As a retailer, they have contracts with manufacturers throughout the world to make their merchandise.  Vendors are selected based on their ability and commitment to meet their safety and quality standards, as well as follow their strict ethical, labor and environmental standards.  Once contracted, their internal experts work with vendors to certify compliance with their strict quality standards and sourcing policies in an ongoing basis.

SCM

Victoria’s Secret's Supply Chain starts from raw materials, which are chosen by the designer and get shipped from China.  The raw materials get processed at the factories, which use special machines for Victoria’s Secret products.  The machines are highly qualified for specific use to process the materials. After the raw materials get processed, they become a product. The product is made in batches of different colors, sizes, designs, and cuts depending on the product design. Then, the finished product gets retailed at Victoria’s Secret stores and on their website.  

Unfortunately, due to certain trademark, labeling, product content and embargo restrictions, Victoria’s Secret currently does not ship all products to all countries. If you have a restricted item in your bag, you will receive a message during checkout that lists the restricted item along with specific instructions to remove the item from your shopping bag or change the shipping method or address if applicable. Shipping and handling charges are determined by the merchandise dollar amount of your order before any deductions; not subject to special offers. Charges are calculated before taxes. All orders are subject to verification. If items are backordered, the total shipping and handling charges will be allocated proportionally and charged as the merchandise is shipped.  All backordered items ship out via Standard Delivery. Delivery is usually 4-7 business days.  

The critical processes that make up Victoria's Secret's supply chain are:

1) Product Design and Product Launch; 2) Merchandise Planning, Allocation and Forecasting; 3) Production & Sourcing; 4) Logistics; and 5) Store Operations. A design idea, from the point it is conceptualized to the point the product is delivered to the Victoria's Secret Stores, termed by the company as "Concept-To-Market", traverses through each of these processes comprising the supply chain. 

Limited Brand’s division Limited Logistics Services (LLS) is a $9.7 billion supply chain management operation. It supports the global supply chain service needs for Limited Brands. The company has supporting departments including Limited Customs Services, Product Quality and Regulatory Assurance, Strategic Procurement, Supply Chain Planning and Analysis, Operations Engineering, Facilities Services, Logistics Operations and Operations Support. The products are distributed to 4,600 stores and catalog customers. Columbus operations contain seven distribution and fulfillment centers and two shipping facilities. LLS serves all Limited Brands businesses - The Limited, Express, Victoria's Secret Stores, Victoria's Secret Beauty, Victoria's Secret Direct, Bath & Body Works, and The White Barn Candle Co. LLS is one of the best retail logistics industry with a balance of state-of-the-art technology and automation, and trained logistics employees.

LLS has set up some functions to manage the company's supply chain processes. LLS wants to concentrate on maximizing distribution and logistics efficiency, fulfilling with international trade and customs laws, ensuring regulatory compliance and facilitating product allocation and flow planning. All departments also have to make sure there are no weak links in their supply chain management. One of the important facts is LLS investing in its employees.

CRM

Victoria's Secret currently does 10 things to Optimize CRM.  The first thing they do is trend the long term control group.  This allows them to observe natural baseline shipping patterns.  Those patterns help inform their contact strategy for a season.  When there is lower baseline shopping, there is more CRM.  Next, Victoria's Secret is increasing the size of their Database.  They are adding cell phone matching capabilities to identify more customers at POS.  They are also investigating media deals that involve sharing of names.  Next, they are Considering Alternatives Channels of Delivery.  They want to test inserting their direct mail piece on top of newspaper deliveries, adding inserts in existing Victoria's Secret catalogs, use concierges to deliver their CRM pieces in high tourist areas and have bulk drops.  They are also increasing their number of email contacts and are using bounce backs since they are a less expensive delivery mechanism that targets high quantities of existing customers, including those not captured on their database. Fourth, they are focusing on current customers with minimal spending on lapsed and prospecting.  They want to retain their high quality customers by focusing on their Angel Credit Card customers, while adding new benefits and double and triple point events.  Fifth, they are rewarding loyalty.  They sent VS branded gifts ($40 value) to their best customers in the past holiday season.  Next, they are researching the customer.  They are undertaking a 3-month study to help better understand what is in their customers' and non-customers' lingerie drawers and what influences her to purchase certain products. Seventh, they are over-hauling the customer contact strategy.  They want to re-build their models, monitor customer cycle time and add more contacts per customer.  Eighth, they want to get more aggressive with offers.  They want to add more beauty samples to some of their gift with purchases and their gift with purchase will be larger.  They also want to feature value messaging on the creative side.  They are calling out special in-store deals that are featured at a great price in addition to their "champion offers."  Lastly, they are looking for creative sources of funding.  They are going to look at partnerships, list exchanges and use excess product for gifts with purchase events. 

Brand Awareness

Victoria's Secret does a great job when it comes to brand awareness.  When they want consumers to get excited for the holiday shopping season, they put on a show to spread the awareness of the brand.  However, this is not just any show.  Victoria's Secret creates a media spectacle with its annual Victoria's Secret Fashion Show.  The show is seen by millions worldwide during the Christmas buying season and generates tons of publicity for the brand.  Besides the fashion show, Victoria's Secret is mostly known for their celebrity models.  These models are the key factor in spreading the brand awareness for the company.  The models go on interviews and appearances, make commercials and pose for the catalogue in order to create a buzz for the awareness of the brand.  Lastly, Victoria's Secret is on almost every social media website there is.  They have pages on Facebook, LinkedIn, Twitter, Instagram, etc.  They are really getting involved in the social media aspect of E-commerce.  This is how they let their customers know what is going on with the company and new products or promotions that are going to take place.   

Building awareness for Victoria's Secret outside the U.S. is especially important now that the company has begun to expand internationally.  They have opened a few Victoria's Secret shops in international airports, such as in Dubai and Buenos Aires, that will serve as a testing ground for overseas expansion.  In order to bring more awareness internationally, they should look into cheaper shipping costs to international countries as well as expand where they ship to.  By doing this, their brand awareness will spread tremendously fast.   

Customer Behavior & Attitudes

You can rarely go into a local shopping mall and not find a Victoria's Secret store.  Victoria's Secret uses "girly" colors like pinks and reds in order to create a visually appealing store for their customer to walk into.  They also use their "sexy" models in order to sell the brand to the consumer.  Advertising plays a large role in the fashion decisions made by the customer of the brand.  Victoria's Secret immediately comes to a person's mind when they think of lingerie, bras and panties.  By using the models to appear in commercials and advertise the brand, the consumer begins to believe that they can be just as seductive as the Victoria's Secret supermodels if they purchase the lingerie.  This is what draws the customer to the stores and what gives them the drive to shop at the store.  

For women who think that the Victoria's Secret line is too sexy for them, the "Pink" line offers a casual alternative that allows young women to feel cute and playful.  A Pink consumer uses personal influences to make purchase decisions.  They like to take their personal sense of style to the next level by wearing clothing that better suits their personalities. 

Target Market/Market and Customer Segmentation

Victoria's Secret's Target Market is the middle class woman or man shopping for a middle class woman aged 21-49.  The customer wants to feel sexy and look sexy, which is why she comes to shop at Victoria's Secret.  Whether she is trying to buy lingerie to wear on a casual day or on a night to impress someone, Victoria's Secret caters to her needs and wants.  She is not afraid to look sexy or wear skimpy lingerie.  

Victoria's Secret's PINK line attracts people outside of the Victoria's Secret market.  These are the younger age women, such as the college student aged 16-29.  The bright colors, trendier prints and smaller attire appeals to be more casual and laid back than the traditional Victoria's Secret line.  This line inspires the younger generation to come into the store and shop.  Victoria's Secret recognized that there is a fad with females who are growing up faster and faster.  The Pink line position's itself as an acceptable method of offering female young adults the opportunity to purchase items where not many other apparel brands will.