December 02, 2014

L Brands

One of our loyal readers forwarded this video about L Brands (of which, Victoria's Secret accounts for 60% of volume) - click here.

The video highlights tactics at Victoria's Secret that apply to your business as well.

Here are the trends.
  1. In-Store Best Sellers. Over time, we're going to see the bottom 30% of the store portfolio be at risk. The best retail locations will continue to perform really well. The worst locations are going to change - they will become smaller, or they will disappear. If they become smaller, they're only going to feature the best-selling items. And if they only feature the best-selling items, then it will be important for the store to have a digital alternative - average/poor selling items will be available online and can be shipped to the customer. This is, quite honestly, a simple extension of the old-school "extended size" strategy that apparel retailers used to have in the 90s and 00s ... key sizes were stocked in stores, your 2XL-Talls were only available via catalog or online.
  2. Shift To Digital / Mobile:  This is a shift that is much more strategic that it sounds, and that is really saying something. What you are seeing here is not so much a shift to Digital / Mobile, but instead, a shift AWAY from Baby Boomers. That's what this is about. Companies going all-in on mobile are telling the public that they are shifting away from Baby Boomers, and are transitioning to Millenials.
  3. Product Shift:  In the article, you learn that Victoria's Secret is shifting away from Dresses and Ugg Boots. This is all code for "Shifting Away From Baby Boomers".
Across my retail client base, these three trends continue to surface. The industry labels this as "omnchannel". The data suggests that this is something far more fundamental, strategic, and important. The data suggests that this is a generational shift, away from Baby Boomers. 

For a company like Victoria's Secret, the shift is necessary, and shifts in demographics are part of the company DNA.

For most other retailers, the shift is necessary in the long term, but can be very painful in the short term.


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