Following an abysmal first quarter 2023 earnings report, Victoria’s Secret dropped another bombshell announcing it is expanding bra and panty distribution on Amazon. With an ongoing slide in revenues, Victoria’s Secret needs something to jumpstart sales. Yes but apparently, it thinks partnering with Amazon will do the trick. So, it’s launched a branded Amazon Fashion storefront featuring over 4,000 Victoria’s Secret and Pink branded products, including bras, panties, sleep, swim, and loungewear, all available through free Prime delivery. Plus, some styles will be offered through Amazon’s Prime “Try Before You Buy” service.

Second Amazon Launch

This follows the introduction of Victoria’s Secret beauty products and some Pink selections on Amazon last year. “We have continued to expand our assortment offering with Amazon Fashion, and it remains a natural extension of our owned channels,” Greg Unis, Victoria’s Secret chief growth officer, said in a statement. But it feels like the brand is jumping from the frying pan into the fire. It may get some additional sales by entering the “Everything Store,” but more than transactions, it needs to drive demand for the Victoria’s Secret brand. That takes brand building, not transaction loading. What has Amazon ever done to build a brand other than Amazon?

What will unlock growth for the company is to be the first and only brand that customers think about for their intimates solutions. Exposing itself on Amazon surely won’t help accomplish that. Exposing itself on Amazon surely won’t help accomplish that.

Tough Sell

Victoria’s Secret has had a rough ride since May 2021 when it went public as an independent company. Full-year Fiscal 2021 sales were down 9.6 percent compared with 2019, dropping from $7.5 billion to $6.8 billion. Then it dropped another 6.5 percent in fiscal 2022, to $6.3 billion. First-quarter 2023 continued the downward slide with its reported $1.5 billion revenues off five percent and even more alarmingly, net income down to $1 million from $81 million same quarter last year. Based on that result, it revised its full-year 2023 forecast to flat or down low-single digits in revenues and adjusted operating income in the five to six percent range, about half of what it was in fiscal 2021.

“The first quarter continued to be a volatile macro environment for our customer, and as the quarter progressed, business became more challenging,” CEO Martin Waters said in a statement, observing, “Sales performance was particularly challenging in our core categories where there was significant decline in the overall stores and digital intimates market in North America.” But he remained optimistic about the future: “We recognize we are on a journey, and our brand repositioning efforts will take time, and while the environment creates some turbulence, we remain confident in our repositioning efforts and our strategic plans for growth.”

Languishing In Store

More telling than the topline numbers is what sales-store sales reveal. Consumers are not all that enthused about shopping at Victoria’s Secret. Same-store sales dropped 11 percent in first quarter 2023 and 14 percent for brick-and-mortar stores only. This followed an eight percent same-store sales decline in 2022, specific to company-operated North America, as well as its 72 China stores operated under a partnership.

One bright note in the first quarter was direct sales rose 10 percent, up from $420 million previous year to $465 million in 2023. But online direct sales only account for about one-third of its total, and its store sales were off nearly 16 percent. Plus, direct sales didn’t help the company last year when they were down some 13 percent, from $2.1 billion in 2021 to $1.8 billion. It’s safe to say Victoria’s Secret has yet to find the secret to unlocking its growth formula, and I’m pretty sure it isn’t with Amazon.

Backstory

During the company’s investor presentation last October, Unis took the stage to share the company’s growth initiatives, starting with international expansion, where it sees a long runway. In 2022, just under $600 million or less than 10 percent of total revenues were made outside North America. Internationally, it leverages strategic franchise partnerships to “go where the customer is and market like a local,” he explained.

That led to a brief – exceedingly brief – discussion of the company’s goal for channel expansion and wholesale, or as he said, “growing outside our own four walls.” He further described two filters the company would use to choose new channel partners: its promise to bring in new customers and to enhance the brand’s appeal. In a call to VS&Co, it declined to make a comment.

Regarding its early appearance on Amazon, Unis said it proved successful in acquiring new customers through its launch of a beauty assortment and Pink apparel. As for brand enhancement, Amazon may be a good fit for beauty and a secondary brand like Pink, which presents a different image and targets a different customer than the aspirational flagship Victoria’s Secret brand.

In the luxury space, Gucci sees no benefit to opening itself up on Amazon; however, it does offer entry-level perfumes and sunglasses on the site. And luxury-leader LVMH won’t even go that far. “We believe the business of Amazon does not fit with LVMH full stop and it does not fit with our brands,” declared CFO Jean-Jacques Guiony.

All Mixed Up

Victoria’s Secret brand needs to transform its image, to make it hot again. Robin Lewis had much to say about that in his recent piece, “Victoria’s Secret: Is a Turnaround Possible?” observing that the company “has many different siloed business lines that are unaligned, which is confusing … or misleading, to say the least.” Amazon has become another one of its sales silos but a dangerous one. On Amazon, other intimate brands are already mixed into the VSC platform, many of which are look-alike copycats at cheaper prices. In no way does that enhance the brand’s image.

Brand Dilution, Not Brand Elevation

By launching on Amazon, Victoria’s Secret is trading short-term gain for long-term brand building, which is better done through its proprietary channels, especially its stores, and website. “Doing business on Amazon is like putting a band-aid on a bullet wound. It won’t stop the bleeding,” said Paul Friederichsen, founder of advertising and marketing agency BrandBiz. “Sure, it may result in an immediate sales spike, but it’s temporary at best. A brand like Victoria’s Secret can’t sell its way to success on Amazon. That’s a ticket to brand oblivion and commodity hell.”

One thing Unis said in his presentation, which is undoubtedly true about the Amazon marketplace, “Consumers are shopping for solutions, not brands.” But his solutions-first insight applies to challenger brands, not market leaders like Victoria’s Secret where the brand must come first. What will unlock growth for the company is to be the first and only brand that customers think about for their intimates solutions. Exposing itself on Amazon surely won’t help accomplish that. Exposing itself on Amazon surely won’t help accomplish that.

I coined the phrase, “positioning drift” to define the collapse of A&F about eight years ago, following about 25 years of incredible growth under the leadership of CEO Michael Jeffries.  “As Michael Jeffries heads into the sunset, he will be leaving behind a once victorious A&F brand that he brilliantly developed over the past quarter century that is now in tatters. He was blinded by meteoric success, in my opinion and did not see his adversaries gunning for his consumers as his brand drifted off course. That was Jeffries’ Achilles heel. He drifted older along with his original young customers. He kept his focus on those aging customers (as if they would be sexy, young, and cool forever) without looking over his shoulder at their younger siblings, most of whom wouldn’t be caught dead wearing their older brothers’ and sisters’ brand. This positioning drift blindsided Jeffries. In my opinion, even if he had foreseen the need to pivot to the next generation, Jeffries would not have been able to successfully reposition the brand.”

At the end of the day, no amount of product, marketing, store layout, or presentation repositioning would work to capture the emerging millennials and Gen Zs who arrive with their own ideas about what’s cool, and not. And to them, A&F is not. And after 25 years and billions of marketing dollars, bombarding consumers’ brains with an A&F image that automatically pops up every time A&F is read, heard, or seen, makes a turnaround under that brand name, almost impossible.

The reality is that VS was broken. The marketing of the company was inappropriate. It didn’t need a little tweak. It needed a complete revolution. But you don’t change a brand’s positioning in five minutes or a day or a month or a week. It takes years.

So, that’s why apparel brands must continually and incrementally evolve their brand, its imaging, product styling, marketing, and presentation to connect and stay connected with each new generation and their idea of “cool.”

There are other examples of brands that got caught in the positioning drift. Many of them are now residing in Authentic Brand Group’s portfolio: Juicy Couture, Nautica, FRYE, Forever 21, Eddie Bauer, Aeropostale, and others. ABG’s model is a licensing business, and my opinion of their fate is not optimistic. https://therobinreport.com/?s=simon+properties+JC+Penney.

Is VS an Echo or a Repeat?

In 2018, as Victoria’s Secret was unraveling from the same positioning drift issue,  I said, “Who would’ve thunk it? How could Les Wexner, the IQ leader of leaders in the pantheon of retail greats, not have thunk ahead of the curve about the fact that his iconic Victoria’s Secret brand was behind the curve.” I was speaking of his failure to see and to pivot to the new young millennial and Gen Z cohorts with a totally different set of values, tastes and style preferences than their Boomer predecessors. Let’s review: The brand was founded by a businessman who positioned the original brand’s stores as places where men could fantasize and/or buy lingerie for women. When Wexner acquired it in 1982, he went on to strengthen that positioning to infinite levels. At its pinnacle, customers not only accepted the brand’s blatant sexual imaging and styling, but they also supported the brand with a 30 percent share of the market. One could argue that the soft-porn image of VS became as popular with women as it was with cross dressers.

Like Michael Jeffries and A&F, Wexner proceeded to build and manage this Victoria’s Secret for decades, Like A&F, the success of the VS brand was also driven by its sexy products and marketing. And like A&F, it got sucked into a positioning drift. But there’s still hope for A&F. After eight years under the leadership of CEO Fran Horowitz, the brand is seeing some green shoots from its long period of re-positioning.

Will VS, Led by CEO Martin Waters, Get Back to Great?

Waters took the helm in 2020, and according to an article in The New York Times, one could hope he’s talking the right talk and strategically has begun to walk the right walk to return the brand to positive and profitable growth and its dominant share of market. It’s an evolution, not a revolution. Although the website is still focused on looking and feeling sexy, he is shifting the product styling to include more natural looks and body images of everyday women. He dumped its sex-infused annual fashion show with its Angels and soft-porn lingerie presentations. The Angels were replaced with a group called VS Collective, including models inclusive of all shapes, ethnicities, and professions.

That being said, there is a significant disconnect between the theory and practice of transforming VS. The Collective website looks to be in one strategic direction with aspirational marketing language of “We’ve centered ourselves around what our customer wants and needs – making sure that they are proud to shop at Victoria’s Secret. We have moved from promoting an exclusionary view of what’s sexy, to celebrating all women throughout every phase of their lives. We will continue this work and look to be an industry leader in retail innovation, fashion, sustainability, and continuous ingenuity—getting to the heart of what our diverse customer base wants.” Sounds good, but when your new marketing position is basically siloed from your current ecomm business that still extolls sexy in an old-fashioned, not body positivity sexy way, you have to wonder.

Waters is also changing the culture and management. As stated in the NYT, “After becoming CEO, he (Waters) said he held a companywide meeting to hit the reset button at the end of 2020 and told employees that Victoria’s Secret needed to change.” Waters said, “The reality was that the company was broken. The marketing of the company was inappropriate. It didn’t need a little tweak. It needed a complete revolution. You don’t change a brand’s positioning in five minutes or a day or a month or a week. It takes years.” The Collective site affirms that VS supports its 87% female associate base, is investing in women-owned businesses, and funding causes that will make the world better. “In the next five years, VS&Co will invest $50 million to fund causes that matter to our customers, like the fight to eradicate cancers that fully or disproportionately impact women. We are also committed to increasing capital for women owned and run businesses.” Also,“VS&Co is committed to 100% pay equity for all genders, races, ethnicities, and the intersections of these identities. And the VS&CO-LAB is a curated digital platform that champions brands that are for, founded, owned, or run by women. This new destination showcases brands that align with our values of innovation and inclusivity. Through VS&Co-Lab we offer these brands an unparalleled marketing reach, the ability to amplify their stories, and strategic mentorship, all while bringing customers new and desirable products.”

Great ideas, yet the women-funded businesses are showcased on a separate site, not the VS site. It would appear that Waters has many different siloed business lines that are unaligned, which is confusing … or misleading to say the least.

The Brave March ForwardVS is just now beginning to see the light of the brand’s transformation. To continue changing the culture, Waters also replaced the male-dominated executive team and board of directors. In his strategy to transform VS from soft porn to body positivity, Waters got hundreds of letters from people who said they were no longer shopping VS due to the marketing changes. He said he had a brief moment of doubt. However, he discovered that most of those letters were from men obsessed with the old VS. Waters said, “We were happy to say goodbye to them.”

Can Waters Pull It Off?

A few issues are going to act as barriers to Waters’ plans. First of course, is how many years the Board and Wall Street will give him to turn it around. Another is that the market is now more crowded with legitimate competitors: Aerie, Lululemon, and Rihanna’s Savage X Fenty and ThirdLove startups. And a third barrier is how deeply embedded the past sex-associated VS brand is in consumers’ minds. Hear, see, or read the words Victoria’s Secret’s, and is the consumer going to be able to compute that it stands for something different than what it originally stood for?

The Times pointed out that “some shoppers say that they can’t ever see Victoria’s Secret as anything other than what it has represented for decades.” A 33-year-old professional woman they interviewed said, “There is very little chance that I will ever think of Victoria’s Secret as anything other than a brand that showcases a very narrow and unrealistic depiction of women’s bodies.” Changing the brand to VS, eliminating the old name may not be enough. It may need a full-scale reset.

The one statement that Waters made gives me hope. He said, “The idea is that we support women on their journey, not tell them what their journey should be, not define for them what sexy should be, but listen to them.” He commented on a streaming service, a multi-day global fashion event next year, “It will be very inclusive. It will be broader than just the look of the lingerie. It will be about women’s journeys through life.”

Stick to that philosophy Martin. And while you’re at it, get all your public facing marketing coordinated with one cohesive message. And if you are sincere and consistent with all of your current and lost consumers, the current ones will visit more often and buy more, and the lost customers will return. And maybe the repositioning will stick, and the Board and Wall Street will give you all the time you need.

With its U.S. sales, earnings and customer affinity deteriorating, many analysts are questioning the future of Victoria’s Secret. In his article “Behind the Curve,” Robin Lewis credits Les Wexner’s historic ability to predict big shifts in the market, but wonders whether the brand’s unmoving, sexy positioning – long an asset – might be the primary cause in the brand’s current troubles.

In fact, the brand’s marketing has long been criticized (even in internal debates among company executives) for making sex too overt and overly objectifying the better half of humanity. But up through 2015, as brand sales approached $8 billion and operating earnings $1.4 billion, no one could argue it was bad for business. What changed? Is the long arc of fashion currently bending towards natural beauty and away from sculpted artifice? And has the current wave of pussy hats and #metoo feminist activism accelerated the beginning of the end of this iconic brand?

Those old enough might recall that the brand previously changed its positioning. Up through most of the 1990s, Victoria’s Secret was literally Victorian, with an address in London. The brand had a proper English call-center operator; the stores’ design metaphor was a Victorian boudoir; and the brand imagery most often featured a very English-looking and sounding model named Stephanie Seymour, who was often shown wearing lacy nighties and figure-revealing sportswear as often as lingerie.

Rebrand #1

Beginning in the mid-1990s, Wexner decided to change everything. First, he re-engineered the product development process so that it began with the internal design team instead of the merchants. The brand became “Design-driven, merchant-led.” Second, he distorted all aspects of the business — talent, time, inventory, displays, marketing, etc. – towards bras. Third, Wexner and his team defined a new brand architecture for Victoria’s Secret, modernizing its imagery and voice, creating a more aspirational, young and fashionable American brand.

The brand’s DNA was codified into “sexy” and “modern.” Design would produce, ahead of every season’s development, large foam core ideation boards showing “what is sexy now” and “what is not sexy now.” Sometimes the ideas were expressed in video. The tagline was always: “The most beautiful women in the world wear Victoria’s Secret.” These simple guidelines allowed the brand to both evolve with the times and help define — through its catalogs, TV ads, fashion show, digital and PR presences, stores and product – the idealization of modern, sexy beauty for much of America.

This re-engineering within a new brand framework opened up major market opportunities. Sub-brands Body by Victoria (targeting everyday wear) and PINK (targeting more youthful customers and casual occasions) were invented, each with its own brand architecture and business plan. Victoria’s Secret’s design team was supplemented by the corporation’s Limited Design Services, enabling the brand to launch multiple new product lines every season. Each product line had its own defined set of benefit layers, technical + functional + emotional. Each launch was meticulously coordinated across media and sales channels, with resources calibrated to the perceived market opportunity. When faced with the eventual limits in design-, merchandising- and marketing-driven growth, Wexner then pushed for best-in-class operational excellence in manufacturing and supply chain quality, read-and-react speed and selling effectiveness.

The brand, domestically at least, has now hit a wall. What should Victoria’s Secret – this weaponized specialty retail megabrand — do next? Fashion consumers like to shop, and they’ve always been attracted to novelty. The internet has made shopping efficient, and competitors and choices abundant. It seems the natural limit on how dominant a single brand can be over a sustained period of time has shrunk. By a lot.

Rebrand #2?

In my view, the options for Victoria’s Secret are limited, and not at all obvious. Those who think the brand should reposition towards something less sexy and more natural should consider:

Current Victoria’s Secret customers are still fueling a profitable $7 billion business.

They are among the most fashion-driven consumers, likely to buy relatively expensive, high-margin bras with sculpting features, and buy multiples every season.

There is no doubt the “natural” segment is growing faster today, but would it be possible to own that market space even close to the extent that Victoria’s Secret owns “sexy?”

Will pursuing this lesser-volume, more-competitive, and lower-margin segment be worth the risk of diluting its current brand equity?

Wexner believes the long arc of fashion will bend back to sexy. I use the term somewhat tongue in cheek — fashion trends will whipsaw as often as they bend.

Become a Platform?

Why shouldn’t the corporate parent leverage its retail, merchandising and product development expertise to develop more VS brands, sub-brands and business units?

The fact is, Victoria’s Secret is already a platform – for lingerie, beauty, PINK and sport. This brand travels online and overseas. But Wexner determined that the brand’s apparel, swim and the catalog were not worth the added complexity. L Brands’ attempts to create other standalone intimates concepts have not gone well: Intimissimi failed in the U.S., Cacique was offered up as a Lane Bryant sub-brand and La Senza struggles. The corporation is itself a platform, operating, in addition to 1,200 Victoria’s Secret Stores, 1,700 Bath & Body Works, 124 La Senza and 27 Henri Bendel stores. L Brands used to host eight apparel divisions; Bath & Body Works gave birth to C.O. Bigelow but had to bury it a few years later. (Wexner once told a small group, “Being right a third of the time is still Hall of Fame ball.”)

The plain truth about the platform solution is that the business of specialty fashion retail is not at all like Facebook, Google or even Amazon. There are few network economies, and sharing data across brands with different target consumers is worth very little. Specialty brand execution is idiosyncratic, not a formula. It requires obsession to detail and focus; that’s what makes it special. Finally, it’s just damned hard: ask GPS, URBN, ASNA, ANF, and CHS.

Manage Maturity?

Wexner has asserted that shoppers will once again return to malls because we are inherently social animals, and malls that adjust will revive. Assuming the long arc of fashion bends back to sexy, then managing maturity is the most logical choice. The brand has many processes in place to make sure it stays relevant to its target customers. It continues to execute at retail better than anyone in the industry. And there is always China.

Who would’ve thunk it? How could Les Wexner, the IQ leader of leaders in the pantheon of retail greats, not have thunk ahead of the curve about the fact that his iconic Victoria’s Secret brand was behind the curve, so to speak? The reason I’m perplexed about the fact that Wexner apparently did not see a new consumer culture emerging with its new view on intimates is because Les Wexner has been ahead of the curve his entire career. In the mid-60s he was not only ahead of the fashion curve, capitalizing on the new wave of women’s sportswear, he also pioneered the branded retail specialty chain model. Launching The Limited (limited to women’s sportswear), he was also ahead of the fast-fashion curve by innovating a rapid-cycle supply chain, distributing new fashion looks to stores in a matter of weeks vs. seasons. He was also ahead of the curve when in the late 90s he declared apparel retailing “mature,” selling The Limited to focus on Victoria’s Secret and Bath and Body Works.

Worse than being behind the curve, the brand is now between the proverbial rock and a hard spot, a metaphor for the incoming new young consumer culture with their different priorities and desires replacing the outgoing older boomer culture, which is downscaling into retirement, spending less on stuff and more on travel, leisure, entertainment, health and well-being. Furthermore, the aging boomers, once the VS sweet spot, are managing “sexy” in ways that are not necessarily consistent with the brand’s core product and marketing positioning. And then there are the millennials who want authenticity and honesty in the products they choose. The photo-shopped, fantasy VS angels are becoming irrelevant in today’s young consumer culture seeking meritocracy. The desire for an over-the-top plunge/push-up approach to everyday bras is been replaced by bralettes and less structured intimates for a more natural look. Which is not to say beauty has been replaced by utilitarianism. It is more natural beauty. The #MeToo movement has also influenced a more authentic attitude around intimate apparel.

So, if the “hard spot” is the aging culture leaving the brand, the “rock” is the younger culture, larger in numbers, but with smaller pocketbooks and a different style mandate. Ironically, both groups are more interested in the style of life than the stuff of life. And what stuff they do want is driving what’s “in” and what’s not. Younger customers are driving the curve, and in the case of intimate apparel, it’s not just to be falsely curvy. These new world consumers view the hyper-sexualized VS styling and marketing, including the models, as out of touch. Another characteristic of these young consumers is that they embrace diversity, including all body types, which is clearly not in the angel’s brand DNA.

According to a YouGov poll, among 18 to 49-year-old women, the brand’s buzz score (whether consumers are hearing positive or negative things about a brand) dropped more than three points over the past six months to 23. In 2016, it was 31 (for context, Amazon was the number-one brand with a buzz score of 36). By another measure, Victoria’s Secret’s customer satisfaction score dropped by 4.5 points over the past six months to 30 (on a 100-point scale) from a high score of 42 in 2016. And the number of women who said they recently shopped at Victoria’s Secret dropped from 28 percent in 2016 to 17 percent. Even the iconic Victoria’s Secret Fashion Show last November had a 30 percent drop in viewership.

While VS still controls a 27 percent share of market, comp store sales declined every month in 2017, and down six percent in the fourth quarter alone. Sales were down between 10 percent and 14 percent toward the beginning of the year and by single-digit numbers toward the end of the year.

Lose a Share Here, Lose a Share There: Les, You Have a Brand Problem

As this new, largest shopping cohort powers full-on creation of their own new world, Les Wexner will realize that today’s new world “speed boats” (as I like to call the new brand upstarts) now circling his “battleship” picking off a share here and there, have suddenly fired enough shots across the bow that his ship will sink. And it will not solely be a “behind the fashion curve” product problem. It will be a brand problem; the whole enchilada of the brand positioning and the many years and billions of dollars that Victoria’s Secret has spent pounding into our brains precisely what the VS brand stands for. Therefore, it doesn’t even matter if they pivot their fashion styling to serve the desires of the new consumer culture. The merchandise, paired with the brand and what it stands for, will not compute.

VS still promotes a disproportionately higher number of its signature bras over the more popular bralettes. A fashionista I am not, but here are some of the speed boat brands that are nipping away at the battleship’s share: ThirdLove; True & Co; American Eagle’s Aerie; Gap’s Love; Lively; Journelle; L’Agent; and Amazon is planning on bringing its successful UK brand, Iris & Lilly to the U.S.

Maturity Does Not Have to Lead to Death

Far be it for me to express my opinion to the brilliant Mr. Wexner, considering all the curves he was ahead of in his career, including his incredibly successful tenure at Victoria’s Secret. He is a serial entrepreneur and historically knew when to get out. As I said, he declared apparel retailing a mature industry, thus shedding the Express and The Limited businesses to focus on VS and Bath and Body Works. He saw it coming.

But now Victoria’s Secret is likely entering maturity. it doesn’t mean the brand has to die. Levi Jeans and the Gap have significantly declined in size over the years, but they continue to slog along.

So, Mr. Wexner, even though you seem to be behind the curve on this one, enjoy a smaller, mature, and hopefully profitable brand that remains appealing to fewer legacy consumers who still love what it stands for.

I’m just saying…

A few weeks ago, we published a post on our blog at CheckoutTracking.com about the loyalty of Victoria’s Secret shoppers. Understandably, it generated a fair amount of attention…and an even greater amount of envy.

Here’s why:

1. Our data shows that in a world where apparel manufacturers struggle to win millennials, Victoria’s Secret has already done so.
2. While other well-established brick-and-mortar retailers struggle to sell online, Victoria’s Secret has turned into a digital powerhouse.
3. In an era in which fickle shoppers have made it difficult to win customers’ devotion, Victoria’s Secret buyers are more loyal than intimates buyers at other retailers.

What is it that allows VS to win in those three crucial areas? What, in other words, is Victoria’s Secret? In that earlier blog post, we noted that the key to VS’ success was its young and loyal buyers. But that doesn’t quite explain the breadth of the phenomenon that is VS. To truly understand what’s happening, it pays to look just a bit deeper.

Light, Medium and Heavy

Longitudinal data from Checkout Tracking℠ is based on real receipts from real people, from both online and brick-and-mortar locations, collected over time. That allows us to uncover things that aren’t readily apparent when looking at things like revenue, market share, same-store sales, or other traditional measures. In particular, it lets us see categorized individual buyers and then search for insights within buyer subgroups. And if we look at three such subgroups, Heavy (people who made three or more intimates purchases in the 12-month period ending in April 2016); Medium (those who made two intimates purchases during that time period) and Light buyers (just one intimates purchase during the 12 months), it’s possible to see the secret powers of the Victoria’s Secret shopper.

While only 28% of in-store VS customers are Heavy buyers, they spent more than 50% of their Intimates dollars at VS.

The impact of Heavy buyers’ loyalty is even higher online. Heavy buyers account for 18% of VS Online customers, but 44% of dollars spent at VS.

Looking at the data also unveils information on VS’ true competitors.

For moderate brands like Bali, MF and Warner’s, the overlap is in the Light in-store VS buyer.
Target brands have overlap with the Medium in-store VS buyers.

But online Heavy buyers allocate over 90% of their spend on the VS brand across all intimates categories.
Dive even deeper, and the top secret of Victoria’s Secret becomes clear. Engaging Heavy online buyers has been key to VS’ success.

The difference in spend between Heavy and Light buyers online is a whopping $123 — almost double the $64 gap seen in-store between Heavy and Light.

Numbers like that aren’t easily duplicated, as Marshal Cohen, chief industry analyst, The NPD Group, Inc., has said. “The exclusive and differentiated merchandising mix that Victoria’s Secret offers shoppers has led to a unique breed of consumer that is extremely loyal.” But difficult to duplicate isn’t the same as impossible to duplicate. Any manufacturer or retailer, armed with sufficient data on Heavy, Medium and Light buyers, can figure out which levers to pull to get the biggest gains.

Andy Mantis is executive vice president of Checkout Tracking, a business-intelligence service created by The NPD Group.