Source: Victoria’s Secret
Are Victoria’s Secret and Amazon Meant to Be Together?
Victoria’s Secret is expanding its partnership with Amazon.com, selling its core intimates directly on the platform for the first time.
Victoria’s Secret became the first major vertically-operating chain to open an Amazon storefront in April 2022. Sales were initially restricted to beauty products. Select Pink casual apparel was eventually added.
Under the expanded arrangement, more than 4,000 items across its Victoria’s Secret and Pink brands, including bras, panties, sleep, swim and loungewear, will be offered through the Victoria’s Secret Amazon Fashion storefront, supported by Prime delivery.
Amazon represents Victoria’s Secret’s first North American wholesale partner. Victoria’s Secret’s merchandise has been available through third-party sellers on the platform.
“Following the success of previous product launches, we have continued to expand our assortment offering with Amazon Fashion and it remains a natural extension of our owned channels,” Greg Unis, chief growth officer at Victoria’s Secret, said in a statement.
“Adding a wide assortment of lingerie and apparel from Victoria’s Secret to our stores has been a seamless progression of our work together,” said Muge Erdirik Dogan, president of Amazon Fashion.
The lingerie brand could benefit from Amazon’s reach. Jungle Scout’s recent survey found 56 percent of U.S. adults started their product search on Amazon in the first quarter. Same-store sales fell 11 percent at Victoria’s Secret in Q1 2023.
The Gap brand last November similarly began selling directly on Amazon. Gap’s management likened the move to “rightsizing the business model to a more modern model” with the shift toward digital and away from malls.
Amazon has dedicated storefronts for most brands that sell in traditional department stores, including Polo Ralph Lauren, Calvin Klein, Michael Kors, Levi’s, Adidas and The North Face. Most premier luxury labels, such as Gucci, Burberry and Coach; Nike and Birkenstock; and vertically-integrated chains – e.g., Lululemon, H&M, American Eagle Outfitters and L.L. Bean – do not sell directly on Amazon.
Concerns over brand perception, less control over presentation and customer service, and providing Amazon access to a brand’s customer data are viewed as some downside risks.
Discussion Questions
DISCUSSION QUESTIONS: Does Victoria’s Secret have more to gain than lose selling its lingerie on Amazon? What factors should a retailer or brand consider before selling on Amazon?
Poll
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Nikki Baird
VP of Strategy, Aptos
Dr. Stephen Needel
Managing Partner, Advanced Simulations
Given the current state of Victoria’s Secret business results, this appears to be a calculated risk that management is prepared to make to drive short term sales. Victoria’s Secret needs sales, and so Amazon offers a ready channel. There’s are good reasons why many leading brands don’t sell on Amazon and the fact that Victoria’s Secret is selling on Amazon is telling. Selling on Amazon means that Victoria’s Secret will lose some control of their brand and expose it to potential counterfeit activity.
Much more to gain – especially as mall shopping fades in favor of online for so many things.
I work with a lot of brands. Most don’t love Amazon, but they don’t hate the company nearly as much as grocery does. For the most part, I see interest in exploring the benefits – if the risks can be managed. The most successful brands use Amazon as customer acquisition, offering a limited set of products, leveraging their own fulfillment to make sure they have customer visibility and control, and then entice customers to the broader range. The holdouts are holding out because they want Amazon to do more to get counterfeits off the platform – something that I don’t think Victoria’s Secret has to grapple with so much.
Victoria’s Secret has a lot of ground to make up in appealing to Gen Z, maybe this will help.
Great assessment and strategy!
In an ideal world, Victoria’s Secret would not need to resort to selling on Amazon. However, Victoria’s Secret has been losing market share for years and, despite trying to modernize the brand’s image, is still posting very weak results. As such, it needs new sales channels and routes to market. Amazon is an ideal partner as it delivers a very large audience and a potential bump in sales. That said, Victoria’s Secret will cede some control over its brand and selling on Amazon does not remedy all of the issues – the company still needs to look into and resolve the reasons why it lacks traction with customers.
Toys R Us deja vu.
Despite the dancing-with-the-devil vibe, true scale is no longer achieved in one or two channels. Victoria’s Secret is smart to leverage its hard-won brand equity to expand in new directions. Not every brand has the recognition to pull it off. Victoria’s Secret does.
Why not sell through Amazon’s marketplace, especially as they have dedicated “storefronts” on their site for major retailers like Victoria’s Secret. The real winner is the VS customer that buys their “essentials,” who can now buy through the convenience of Amazon.
I’m hoping this is a planned strategy rather than the last resort for a dying brand. I can see the benefits of keeping your brand name alive by selling on Amazon to keep the lights on while you regroup on your next move, but if this a longer term activity then it will shift Victoria’s Secret into the pit of sameness with a vast sea of online competitors who have been doing this far longer and better. It’s very difficult for an extremely well known brand to go from a thriving physical store presence in the 80s to Amazon reseller, which offers little in the way of experiential cachet — as The Gap is learning the hard way. There is still white space in the lingerie industry that VS was well positioned to explore, such as offering a marketplace platform that assembles brands and products that emphasize emotional wellness, body positivity and empowerment.
Some brands have enough magnetic pull to avoid Amazon, and some don’t. And sometimes in the lifecycle of a brand this kind of move is necessary. It is not a sign of robust health.
These two mega-brands are meant to hook up. To drive growth, Victoria’s Secret needs to be where women shop while Amazon adds some va-va-voom to its assortment.
Sellers should consider the degree of overlap between their audience and Amazon’s. Extending brand awareness, reach and prompt service are major considerations for sellers.
I bet “Victoria’s Secret” ranked high among keyword searches on Amazon, as consumers expected to access the brand’s lingerie (vs. just beauty items).
With same-store sales falling 11 percent in Q1 2023, Victoria’s Secret needs to explore options to boost sales and Amazon is a quick option. While it is probably not ideal for Victoria’s Secret, the risks may be minimized if they strategically offer a limited offering on Amazon. As Nikki Baird noted, a smart strategy could be to use Amazon as customer acquisition, offering a limited set of products, and then entice customers to the broader range at the retailer’s store or website.
This is a super smart move for Victoria’s Secret. They’ve closed several stores and don’t have the salesforce they used to, so offering an additional, extremely accessible channel is necessary.
Victoria’s Secret, like many popular brands of millennials’ youth, is slowly making the transition from mall retailer to brand. The question I’m concerned with is how VS products can compete in a global marketplace, where value, product quality, and sustainability reign over branding.
Many companies that once cut checks on brand alone are struggling to identify their value proposition and VS is no different. I’m very curious how they’ll set their products apart.
Victoria’s Secret might gain some revenue in the short term, but VS will certainly lose some of their control and a lot of their data. Couple this with the many digital startups that have been bubbling up and I think the Amazon partnership could cool off faster than they think.
The real question is: “Is it too late for Victoria’s Secret?”
Mall shopping is declining at an accelerating rate. Younger demographics are spending more shopping time online. Isn’t it a matter of where the shoppers are? If VS doesn’t make this move, do they age?
Online intimate apparel is growing at an astonishing 10% annual rate. VS may be wringing its hands on how to control the brand presentation, but if no one is paying attention, does it really matter?
The real question is: “Is it too late for Victoria’s Secret?”
Mall shopping is declining at an accelerating rate. Younger demographics are spending more shopping time online. Isn’t it a matter of where the shoppers are? If VS doesn’t make this move, do they age?
Online intimate apparel is growing at an astonishing 10% annual rate. VS may be wringing its hands on how to control the brand presentation, but if no one is paying attention, does it really matter?
Retailers and Brands need to be aware of a sticky problem: It is easy to get hooked on Amazon because the sales are just high enough to be impossible to reject (what I suspect happened to VS). Protecting a brand, though, seems impossible on the platform as the Amazon environment has become actively hostile to brands (in general).
After all, a specific search for a specific brand name product no longer brings up results from that brand on page 1 (and often on page 2) of search results. This can do very serious harm as the brand’s presence draws shoppers only to have them choose other options.
DeAnn Campbell nailed with her “I’m hoping this is a planned strategy rather than the last resort for a dying brand.” comment. Let’s face it: sooner or later every brand will sell on Amazon, and consumers will continue to buy there because its easy.
As long as it’s an exclusive relationship and no one else can provide Victoria’s Secret inventory (which can lead to fake inventory in the mix) then I think it’s a win for VC. People do start their product search on Amazon. So if you’re not in the search results you’re missing out on the demand. Could VC get some competition from Amazon in some of it’s more basic staples in the future? Yes, absolutely. But not in the more specialized lines.
That said, if I were a brand, I’d be looking at my packaging and tagging options and incorporate ways to drive those same customers back to my primary brand site as well.
Victoria’s Secret wouldn’t have to rely on Amazon for sales, but as the company has been losing market share and working hard to improve its reputation. An enticing possibility to increase sales and reach a larger client base is to collaborate with Amazon. The drawback is that Victoria’s Secret will have to give up some brand management.
There is a significant amount of manual work, time and resources that are required up front to kick-start an Amazon brand presence. It requires continuously product listing , Amazon SEO optimization, inventory management, orders management throughout the online sales cycle as well as back-end of product listings to ensure maximum conversions. Not sure if your brand is equipped to handle selling on Amazon.
Victoria’s Secret in its current brand iteration will benefit from Amazon’s presence.
Victoria’s Secret has a broader consumer appeal than a decade ago and Amazon will amplify their reach. It’s an excellent move for them.
In today’s competitive retail market, it’s important to go where your customers are, which is exactly what Victoria’s Secret is aiming for with its Amazon expansion. The company must have found enough value in its initial product push to continue to invest further in the marketplace.
Marketplaces are typically perceived by consumers to be less expensive and can help retailers attract new customers seeking deals. Given Amazon’s position as the world’s largest international eCommerce site, there’s a lot of potential for a company like Victoria’s Secret to reach a broader audience while taking advantage of Amazon’s expansive fulfillment and delivery network.
For any brand that is comfortable giving a cut of their sales and consumer data to Amazon, it’s a strong consideration for a multichannel strategy.
I believe that the partnership between Victoria’s Secret and Amazon will play out in a similar fashion as with any other marketplaces like Macy’s, Nordstrom, or JCPenney. Perhaps the only distinction is that Amazon is solely an online marketplace, however, a customer wouldn’t really mind if their favorite brand is available at Amazon or Macy’s as long as they get a fair value.
On the other hand, if brands are following a certain playbook with rules and best practices that advise whether or not to sell on marketplaces, I am positive that the same considerations will be applied to any platform, let alone Amazon.