{"id":7553,"date":"2015-12-09T23:30:30","date_gmt":"2015-12-10T04:30:30","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/victorias-secret-to-success\/"},"modified":"2015-12-09T23:30:30","modified_gmt":"2015-12-10T04:30:30","slug":"victorias-secret-to-success","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/victorias-secret-to-success\/","title":{"rendered":"Victoria\u2019s Secret to Success"},"content":{"rendered":"

\"store\"<\/a><\/p>\n

Victoria\u2019s Secret is the world\u2019s leading specialty retailer of intimate apparel. Its 1,100 stores generate $7.2 billion in annual sales, affording it a 35%+ share of the intimates market in the United States. Operating income margins are 18%+, higher than the apparel industry average.<\/p>\n

Victoria\u2019s Secret is a success story \u2013 it enjoyed tremendous growth and market share gain over its history, built a powerful name, penetrated popular culture, and commanded brand awareness. But there\u2019s more at play here than just genius marketing. A unique value proposition, and execution of an aligned operating model, are behind the lingerie giant\u2019s success.<\/p>\n

Business Model<\/h2>\n

Victoria\u2019s Secret creates value for its customers in two key ways:<\/p>\n

Products:<\/strong> The company offers innovative, sophisticated products at an attainable price point. The products hold functional<\/u> value (e.g. push-up design), as well as aspirational<\/u> value (e.g. collections linked to the world-famous Victoria\u2019s Secret fashion show). To drive store traffic, sales, and growth, Victoria\u2019s Secret continuously launches new products (\u201cfashion launches\u201d) while also maintaining some staples (\u201cnon-launch\u201d or \u201cbasics\u201d).<\/p>\n

Experience:<\/strong> Victoria\u2019s Secret was also able to transform the intimates shopping experience from a \u201cneed to do\u201d activity to a branded, quality-service experience.<\/p>\n

 <\/p>\n

Operating Model<\/h2>\n

Five elements of Victoria\u2019s Secret\u2019s operations neatly align with its value creation goals.<\/p>\n

Product Design:<\/strong> The business model requires that the company remain agile and refresh its offerings. Victoria\u2019s Secret is continuously working to introduce new and innovative products. The company places tremendous focus on its \u201cconcept-to-market\u201d process<\/u>. It prioritizes design and speed to market. A key philosophy of the company is to \u201cRead. React. Chase.\u201d The company\u2019s internal design studios are constantly seeking inspiration for new product designs. New concepts are tested<\/u> in small batches in select company stores. The product line Pink was innovated in this way to attract a younger, college-aged woman.<\/p>\n

Supply Chain:<\/strong> Victoria\u2019s Secret manages two supply chains<\/u> \u2013 one for fashion launches, another for its basic products. It selects a handful of vendors that have proven innovative, technologically advanced manufacturing that can keep up with the rapid concept-to-market goals for fashion launch products. The remaining vendors are cost-effective, high volume suppliers for the basic lines. Overall, Victoria\u2019s Secret partners with select contract manufacturers who are mostly small and agile. No supplier provides more than 10% of Victoria\u2019s Secret\u2019s purchases. The company also sources 90% of its product via \u201copen buy\u201d and not \u201ccommitted buy\u201d agreements \u2013 allowing greater flexibility in innovating.<\/p>\n

Merchandising:<\/strong> Victoria\u2019s Secret also treats fashion launch products differently from basic products in merchandising. Fashion launches are \u201cpushed\u201d from the distribution centers to the stores, in quantities aimed at certain sales targets. On the other hand, basic products are \u201cpulled\u201d from the stores in quantities dictated by replenishment needs and actual sales numbers. This allows Victoria\u2019s Secret flexibility in managing fundamentally different groups of product.<\/p>\n

Store Operations:<\/strong> While Victoria\u2019s Secret has a strong direct channel in its website and catalog ($1.6 billion of annual sales), the majority of the business is in its brick-and-mortar channel. The company-owned stores generate the experiential value that helps to differentiate Victoria\u2019s Secret. Interior design choices<\/u> – lighting, fixtures, d\u00e9cor, and music – promote a feel of feminine luxury. The store layout<\/u>, typically multiple adjacent room-like spaces, separate fashion launches from basic collections, but always displays \u201cpair\u201d bras and panties, to promote more browsing time and bundled sales.<\/p>\n

Sales Associates:<\/strong> A big asset to Victoria\u2019s Secret, and critical to its success, are the sales associates. The company is focused on building a sales force that can give the customer maximum comfort<\/u> level (it is intimates they\u2019re trying on!), and it hires and trains its associates accordingly.<\/p>\n

\"bras<\/a> \"fitting<\/a> \"layout\"<\/a><\/p>\n

Sources:<\/p>\n

Limited Brands Annual Report, FY2004<\/p>\n

Limited Brands Investor Handout, 8\/26\/2015<\/p>\n

“Supply Chain Strategies in the Apparel Industry: A Case Study of Victoria’s Secret”, Sumit Kumar, MIT<\/p>\n

Forbes article, \u201cAmerican Eagle’s Aerie Can Adopt Competitor Victoria’s Secret’s Ways\u201d March 2014<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Push-up Bras and Focused Operations<\/p>\n","protected":false},"author":1183,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-7553","hck-submission","type-hck-submission","status-publish","hentry"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/the-tom-challenge-tom-winners-and-losers-assignment\/","yoast_head":"\nVictoria\u2019s Secret to Success - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/victorias-secret-to-success\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Victoria\u2019s Secret to Success - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"Push-up Bras and Focused Operations\" \/>\n<meta property=\"og:url\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/victorias-secret-to-success\/\" \/>\n<meta property=\"og:site_name\" content=\"Technology and Operations Management\" \/>\n<meta property=\"og:image\" content=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/store-300x200.jpg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/victorias-secret-to-success\\\/\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/victorias-secret-to-success\\\/\",\"name\":\"Victoria\u2019s Secret to Success - Technology and Operations Management\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/victorias-secret-to-success\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/victorias-secret-to-success\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2015\\\/12\\\/store-300x200.jpg\",\"datePublished\":\"2015-12-10T04:30:30+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/victorias-secret-to-success\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/victorias-secret-to-success\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/victorias-secret-to-success\\\/#primaryimage\",\"url\":\"https:\\\/\\\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2015\\\/12\\\/store-300x200.jpg\",\"contentUrl\":\"https:\\\/\\\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2015\\\/12\\\/store-300x200.jpg\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/victorias-secret-to-success\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Submissions\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Victoria\u2019s Secret to Success\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/\",\"name\":\"Technology and Operations Management\",\"description\":\"MBA Student Perspectives\",\"potentialAction\":[{\"@type\":\"性视界Action\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Victoria\u2019s Secret to Success - Technology and Operations Management","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/victorias-secret-to-success\/","og_locale":"en_US","og_type":"article","og_title":"Victoria\u2019s Secret to Success - Technology and Operations Management","og_description":"Push-up Bras and Focused Operations","og_url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/victorias-secret-to-success\/","og_site_name":"Technology and Operations Management","og_image":[{"url":"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/store-300x200.jpg","type":"","width":"","height":""}],"twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/victorias-secret-to-success\/","url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/victorias-secret-to-success\/","name":"Victoria\u2019s Secret to Success - Technology and Operations Management","isPartOf":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/#website"},"primaryImageOfPage":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/victorias-secret-to-success\/#primaryimage"},"image":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/victorias-secret-to-success\/#primaryimage"},"thumbnailUrl":"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/store-300x200.jpg","datePublished":"2015-12-10T04:30:30+00:00","breadcrumb":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/victorias-secret-to-success\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/d3.harvard.edu\/platform-rctom\/submission\/victorias-secret-to-success\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/victorias-secret-to-success\/#primaryimage","url":"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/store-300x200.jpg","contentUrl":"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/store-300x200.jpg"},{"@type":"BreadcrumbList","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/victorias-secret-to-success\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/d3.harvard.edu\/platform-rctom\/"},{"@type":"ListItem","position":2,"name":"Submissions","item":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/"},{"@type":"ListItem","position":3,"name":"Victoria\u2019s Secret to Success"}]},{"@type":"WebSite","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/#website","url":"https:\/\/d3.harvard.edu\/platform-rctom\/","name":"Technology and Operations Management","description":"MBA Student Perspectives","potentialAction":[{"@type":"性视界Action","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/d3.harvard.edu\/platform-rctom\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission\/7553","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission"}],"about":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/types\/hck-submission"}],"author":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/users\/1183"}],"replies":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/comments?post=7553"}],"version-history":[{"count":0,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission\/7553\/revisions"}],"wp:attachment":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/media?parent=7553"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/categories?post=7553"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}