Victoria’s Secret Marketing Plan
Group 6
449977, 455097, 456415, 457628, 457800
MKT 370 SP2020
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TABLE OF CONTENTS
Executive Summary 4
Part I: Background & Problem 5
MARKETING AUDIT 5
Company & Brand 5
Customers 5
Competitive Situation 5
Macro Environment 6
PROBLEM & OBJECTIVE 7
Problem 7
Objective 7
Part II: Marketing Analysis & Research 7
SWOT ANALYSIS 7
Strengths 7
Weaknesses 7
Opportunities 7
Threats 8
CURRENT MARKETING MIX 8
Product Situation 8
Price Situation 8
Placement Situation 9
Promotion Situation 9
Value Proposition 9
RESEARCH PLAN 10
Research Objective 10
Participants 10
Procedure & Measure 10
Results 10
Discussion 11
Part III: Proposed Strategy 12
RECOMMENDATION 12
MARKETING STRATEGY 13
Target Market 13
Positioning 13
Marketing Mix 14
Additional Research 14
PLAN FOR MEASURING PROGRESS 14
Goals 14
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Way of Measuring Success 15
SUMMARY 15
Works Cited 17
Appendix 19
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Executive Summary
Throughout the last decade, Victoria’s Secret has faced increasing controversy regarding its brand image
and promotion of unrealistic body standards. Largely, these issues stem from outward projections of an
internal culture of “misogyny, bullying and harassment” (Silver-Greenberg, 2020). As a result, Victoria’s
Secret’s operating income has decreased by over 50% over the last fiscal year and its stock price per share
has dropped over 75% in the last 4 years.
Victoria’s Secret must move forward by shifting its brand image to emphasize body positivity and
inclusivity. This can be achieved by employing a more diverse set of models in terms of both race and
body type to represent Victoria’s Secret and emphasizing this inclusivity in the company’s promotional
activities. In order to reposition the brand with this message, changes in leadership and brand image are
also necessary. The company’s environment of toxicity has been known to stem from its C-Suite
including CEO Leslie Wexner and former CMO Ed Razek, who used their influence to strong arm any
dissenting opinion. While Razek recently stepped down, private equity firm Sycamore Partners plans to
acquire a 55% stake in Victoria’s Secret and will require Wexner to vacate his positions of CEO and
Chairman. In line with these changes in leadership, Victoria’s Secret has also begun a campaign
promoting transgender, plus size, and older models (Fishman, 2020). While they have clearly begun to
move in a positive direction, the company still has a long way to go to revitalize its image. After
repositioning the brand and hiring a management team reflective of this repositioning, we recommend that
the new leadership at Victoria’s Secret implement changes to reconnect with changing consumer taste and
revamp the brand image. In this report, we provide three key recommendations: an overarching brand
ladder campaign, a revamped Victoria’s Secret fashion show, and an updated online store that shows a
commitment to diversity and body positivity.
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Part I: Background & Problem
MARKETING AUDIT
Company & Brand
Victoria’s Secret, a strategic business unit of L Brands, manufactures and sells lingerie, apparel, and
beauty products. L Brands’ mission statement is “We are committed to building a family of the world’s
best fashion retail brands that offer captivating experiences and invite customers into a whole new world
of beauty and style” (L Brands, 2017). This mission statement emphasizes customer experience.
Specifically, Victoria’s Secret aims to capitalize on customer experience by providing a store experience
in which “customers love our brand and how we make them feel when they’re in our stores” (Victoria’s
Secret, 2020). There are four key pillars which define the values of L Brands including: “The customer
rules,” “Passion leads to success,” “Inclusion makes us stronger,” and “It matters how we play the game”
(L Brands, 2016). The company defines its Victoria’s Secret unit as the following: “At Victoria’s Secret,
we market glamorous and sexy product lines to our customers. While bras and panties are the core of
what we do, this brand also gives our customers choices in beauty products, fragrances, sleepwear,
loungewear, athletic attire and personal care accessories” (L Brands, 2020).
Over the last 5 years, the value of L Brands’ stock has continued to fall. At its peak, on December 1,
2015, L Brands’ share price was over $96, while it was $23.80 on February 4, 2020. During the 2018
fiscal year ending on February 2, 2019, Victoria’s Secret’s operating income had fallen to $462 million
from $932 million during the previous fiscal year (L Brands 10K, 2019). This drastic decrease in
operating income, along with the falling stock price of the company depicts the poor performance the
company has been facing in recent years. One substantial contributor to this poor performance is the
negative media attention received by the company.
Customers
Victoria’s Secret targets women from age 20 to 49. Between 2010 and 2015, the female population age 20
to 44 in North America has increased by 3.4%. This female age group is expected to continue to increase
to 61 million in 2020, showing 7.4% growth compared to 2010 (United Nations, 2019). Victoria’s Secret
has a premium pricing strategy, and thus its main consumer demographic falls in the middle to upper class
income bracket. With 1,222 stores worldwide and 1,063 stores in the United States, Victoria’s Secret
serves diverse consumers globally with the majority of its revenues coming from the U.S. and China (L
Brands 10K, 2019). Victoria’s Secret’s brand image resonates with the free and energetic American
culture, and it appeals to females who are passionate about both fashion and beauty. Recent upgrades to
Victoria’s Secret’s online platform and the return of its swimsuit line in 2019 shows an internal attempt to
diversify its portfolio and attract more tech-savvy millennial consumers (Garcia, 2018).
Competitive Situation
The lingerie industry in the United States is valued at over $13 billion, with Victoria’s Secret holding the
largest market share valued at 24% in 2018 (Garcia, 2019). Despite continuing to dominate the industry,
Victoria’s Secret’s market share has fallen consistently in the face of changing consumer preferences,
allowing competitors like Third Love and Aerie to grow.
Third Love was founded in 2013 with the goal of creating “a bra for every body,” highlighting body
positivity (Lunden, 2019). It has had great success since its founding and remains exclusively an
ecommerce business. It is currently valued at over $750 million, with greater than $100 million in annual
revenue (Lunden, 2019). Third Love is also leveraging data analytics, with the use of size and fit quizzes
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to match the customer with the right size bra, from over 78 options (Lunden, 2019). Third Love focuses
on the customer and empowering women, a stark contrast from Victoria’s Secret which has received
public backlash regarding statements about the “perfect body.”
Another competitor for Victoria’s Secret is Aerie by American Eagle. Aerie has both brick and mortar
stores and an ecommerce presence. Furthermore, it has been rapidly expanding its locations, while
Victoria’s Secret has been closing stores in recent years. The explanation for this likely lies in Aerie’s
messaging and its embracing of body positivity. In the 4th quarter of 2018, Aerie sales jumped 23%,
showing its growth and success (Parisi, 2019). Aerie upholds the belief that lingerie is meant for the
wearer, not to be viewed and enjoyed by others. Additionally, motivational phrases decorate its changing
rooms, continuing to promote body positivity (Parisi, 2019). While its market share is only “in the low
single digit percentage points,” it is increasing and expanding its footprint by opening more stores (Ell,
2018).
Victoria’s Secret is facing competition from companies who have adapted to the current trends and
attitudes toward femininity, which is why competitors’ market share is rising and Victoria’s Secret’s is
falling. Victoria’s Secret has historically differentiated itself from these competitors by focusing more on
sex appeal and unrealistic body types; its competitors are focused on empowering women and have done
so since founding. The company is similar to its competition in the quality of the product it provides, but
the messaging is entirely different.
Macro Environment
Victoria’s Secret is a firm that holds significant international market share in the women’s intimate
apparel industry. To convey the industry’s growth, the compound annual growth rate (CAGR) for the
women’s intimate apparel industry is estimated to be 5.5%, with base year 2019. The largest market for
this industry is North America, while the fastest growing market for the industry is Asia Pacific.
According to Mordor Intelligence, a firm known for its credibility in data collection, the primary reason
for the CAGR to be 5.5% is higher online sales (“Global Lingerie Market,” 2020). Additionally, a
growing pattern among firms in the women’s intimate apparel industry has been the acquisition of
dominant local firms by large international firms. This appears to be a more effective way for the larger
firms to acquire market share, than by entering these smaller niche markets with their own brand. Overall,
this industry as a whole appears to be both consolidating around the largest international firms and
growing at a substantial pace.
More specifically, a significant market trend within the intimate apparel industry is increasing organized
retailing as a result of retail’s shift towards ecommerce. Organized retailing stores are brick and mortar
locations, typically with ecommerce websites, that display many different brands of one or more styles,
such as Macy’s, Walmart, or JCPenney. This trend is a threat to Victoria’s Secret because its merchandise
is only sold in its own stores, and customers may prefer the increased selection of organized retail
locations. This growing trend has increased competition in the intimate apparel industry by allowing
customers to easily compare prices, styles, and material quality. In fact, Victoria’s Secret’s price of bras
and panties have dropped 4% and 24.5%, respectively, from 2018 to 2019. Additionally, one of Victoria’s
Secret’s alternative product lines, Pink, also had a similar decrease in price of 12% and 14.2%,
respectively (“The Lingerie Market Today,” 2020). Overall the consolidation of retail locations and shift
towards ecommerce may hurt Victoria’s Secret’s sales and market share if it doesn’t adapt to this new
retail environment.
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PROBLEM & OBJECTIVE
Problem
For many years Victoria’s Secret has served as the standard for women’s beauty and fashion. However,
with changing attitudes toward beauty standards and numerous lawsuits and scandals surrounding sexual
harassment, Victoria’s Secret has fallen out of line with many of its customers’ tastes. Carrying on a
company culture laden with misogyny, callousness and abuse towards its models, Victoria’s Secret’s
public perception has shifted unfavorably in recent years. The outdated beliefs held by executives and
non-inclusive marketing campaigns run by the company further exemplify how out of touch Victoria’s
Secret is with its customer base. As evidenced by falling market valuations, store closures, and the
termination of its annual fashion show, Victoria’s Secret is struggling to hold on to its leadership status in
the women’s intimate apparel industry. The main problem that Victoria’s Secret is facing is a
misalignment between its brand and consumer sentiment. If Victoria’s Secret is to turn its business
around, it must change how it is perceived and its overall marketing strategy (Silver-greenberg, 2020).
Objective
The objective of this marketing plan is to reconnect Victoria’s Secret’s brand image with the current
attitudes of its target customer. By correcting its toxic company culture and advocating for body positivity
and inclusion of all kinds of women, Victoria’s Secret will be better positioned to reacquire previous
customers, establish relationships with a new wave of women, and strengthen brand loyalty in current
