Innovation like home try-on was a big factor in the $400M intimates deal.
Victoria’s Secret was slow to recognize changes in the intimates market toward inclusivity and digital commerce, leaving an opening for direct-to-consumer brands that found a fit with how women wanted to shop. Now, it is bringing one of those digitally native brands into its fold.
The news: VS&Co., which is the parent of Victoria’s Secret, has an agreement in place to acquire Adore Me, a digitally native intimates brand and B Corp. founded in 2010.
By the numbers:
In a statement, Victoria’s Secret CEO Martin Waters said Adore Me will help the brand “move to the future much faster.” Here are three areas where the acquisition is additive for Victoria’s Secret.
Victoria’s Secret has been in the midst of a turnaround effort, as it seeks to present a more inclusive brand image and product line after falling out of step with the consumer. This includes offering a wider range of sizes and styles, and shifting marketing toward women, as opposed to the angels and looks that were geared more toward men. Some of the steps have included operational moves like a separation from former parent company L Brands, while others have been more brand-centered such as bringing on a group of activist brand ambassadors and a Mother’s Day campaign with a pregnant model, CNBC reported last year.
Adore Me has been built for where Victoria’s Secret wants to head from the start. The brand has a range of sizes – XS-4XL and cup sizes A-I. It reflects diversity throughout its brand, and presents itself as being there for women at any point in their life. As a B Corp., it also has sustainability woven into its operations. Even as Victoria's Secret overhauls its offerings, Adore Me brings market share that the company is trying to gain.
For a brand that has long been associated with the mall, this acquisition could be just as much about modernizing the shopper experience at Victoria’s Secret as it is about the product line. In the announcement about the acquisition, Victoria’s Secret put a big emphasis on the ecommerce-centered innovation that Adore Me brings, and indicated that the brand's tech can be applied to brands across the company.
“Adore Me is a technology-led, digital-first innovator in the intimates category that will help us bring differentiated experiences to Victoria’s Secret and PINK customers,” said Waters, in the statement. “This acquisition will be a significant accelerant as we pivot toward growth and modernize the foundation of our company with an entrepreneurial mindset that puts technology at the forefront of everything we do.”
The press release goes on to state that Adore Me is “powered by a sophisticated proprietary technology platform with highly differentiated customer experiences.”
One of those innovations is home try-on. Adore Me offers customers a subscription service that ships a monthly box with products that are available to try before buying, bringing the experience of shopping for lingerie to the home. Customers pay only for what they decide to keep.
Victoria’s Secret said that home try-on “generates strong retention among its customers with a personalized product experience and has achieved scale by leveraging a complex combination of proprietary logistics, algorithms, and operational assets.”
Is a Victoria's Secret box next?
Adore Me also has a customer base that is complementary to Victoria’s Secret, according to the brand. Adore Me represents the value portion of the intimates market. This means Adore Me can be a “growth vehicle” for Victoria’s Secret.
With the addition of Adore Me, VS&Co. now has a number of labels under its umbrella as it seeks growth i digital channels. There is Victoria’s Secret and Pink, which launched a dedicated Amazon store for beauty products in May. Earlier this year, the parent company acquired a minority stake in Frankie’s Bikinis and For Love & Lemons. It launched the tween-focused brand Happy Nation, and inclusive and added fashion-focused lingerie brand Elomi to its digital marketplace platform, called VS&Co. Lab.
Now, Adore Me will continue to operate as its own business brand under CEO Morgan Hermand-Waiche with 560 employees, WSJ reports.
It’s clear the modernization of Victoria’s Secret will not go through the flagship brand alone. Adore Me has long pushed intimates forward. Now it will be in a position to help one of the category's legacy companies catch up.
Check out Thanksgiving weekend shopping results from Salesforce, NRF, Shopify and BigCommerce.
Spending through ecommerce channels grew over the five days of Thanksgiving weekend 2022, according to results flowing in from across the retail landscape.
Here’s a look at the totals and trends taking shape for a highly promotional holiday season:
Salesforce released the following data for ecommerce spending on Cyber Monday (Nov. 28):
Online sales reached $12.2 billion in the US for Cyber Monday, an increase of 8.3% year-over-year. Globally, spending reached $46.2 billion, which was a 4.2% year-over-year increase.
Growth and price increases were relatively even at a time of elevated inflation. In the US, the average selling price of goods increased 8% year-over-year, while average prices were up 5-year-over-year globally.
Discounts stayed steep to cap off the weekend. For Cyber Monday, the average discount rate was 30% in the US, which was up 7% year-over-year. Globally, the average discount rate was 28% globally, up 6% year-over-year. Apparel and footwear were the top discounted categories.
Thanksgiving weekend overall saw gains from 2021. After Black Friday spending rose 12%, Cyber Monday trends were in line with the overall numbers for the Turkey 5. In all, spending for the five-day Thanksgiving weekend showed 9% growth in the US over 2021, coming in at $67.6 billion. Globally, spending was up a more tepid 2% to $280.8 billion, according to Salesforce
It’s significant that ecommerce spending continued to grow during the busiest holiday shopping weekend in 2022. Any gains over the records posted amid peak demand for goods and online shopping of 2021 are notable, and the forecast this year tilted more toward in-store shopping and a potential pullback due to economic uncertainty amid 40-year-high inflation. Still, the presence of that 7.7% inflation rate leaves an open question as to how much real growth these figures actually show.
Nevertheless, the data is useful in the trends it reveals for the entire holiday season. These figures indicate that people shopped consistently over a stretch of days and took advantage of the heavy discounts that were forecast to be a primary driver of spending this year.
In the elongated holiday shopping season, retailers who can reach consumers directly with offers are finding success, said Michael Scharff, CEO of Evolv AI, which allows brands to continuously optimize their digital KPIs with autonomous technology.
“This year, consumers actively shopped for gifts starting before the traditional Black Friday-Cyber Monday weekend,” Scharff said. “Customers find it irritating and loyalty-busting to have the best pricing released as ‘surprise’ last minute deals. Companies with the highest conversion rates delivered personalized offers tuned to the ‘deal hunter’ mindset starting around Veteran’s Day through Cyber Monday.”
Discounts are an important lever for brands this year, but leaders must be mindful that the shopping experience also represents an area where brands and retailers can stand out. In a crowded sea of offers, UX offers an opportunity to relate to shoppers on their own terms.
“While Cyber Monday shoppers are all about finding the best possible price, they’re far more likely to buy when presented with an intelligent digital experience that wraps added value around a great price,” Scharff said. “The most successful companies know how to leverage real-time customer intent and the enormous amount of customer data available to inform this kind of personalization and tune the shopping experience to the season and individual user.”
The growth in sales came on a weekend that saw record traffic both across stores and online.
Over the five-day holiday shopping stretch, 196.7 million Americans shopped across channels, according to a survey from the National Retail Federation (NRF) and Prosper Insights & Analytics. This was above NRF’s forecast by about 30 million people, and an increase of about 17 million people over 2021, and is the highest figure since NRF began tracking the data in 2017.
NRF President Matthew Shay said the increase in traffic is a sign that consumer demand remains on the rise, even at a time when price increases are a factor in higher spending totals.
“It is consumer demand that is driving growth,” Shay said.
Here’s a look at how the data breaks down:
In-store shopping: More than 122.7 million people visited brick-and-mortar stores over the weekend. Black Friday was the most favored day, with approximately 72.9 million heading out. Additional shopping holidays also had an impact, as 77% of Saturday consumers said they were shopping specifically for Small Business Saturday.
Ecommerce: In all, 130 million people shopped online during the weekend, which proved to be an area that saw more modest 2% growth over 2021, according to NRF. About 87.2 million consumers shopped online during Black Friday, which was also the most popular online shopping day of the year. Meanwhile, 77 million people shopped online on Cyber Monday. NRF said that a record 59% of online Cyber Monday shoppers used their mobile device, which was up from 52% in 2021.
(Chart via National Retail Federation)
This year brought an “enormous resurgence” of in-store shopping, Shay said, with 17% growth in traffic to stores over 2021. It underscores how shopping is part of the holiday season in America, and people sought to get back out after two years of pandemic concerns.
“I think that reflects the enthusiasm for the weekend, for being out and resuming some of those pre-pandemic behaviors, reliving and renewing some of the family traditions and being out publicly in ways we haven’t been able to for several years,” Shay said.
(Chart via National Retail Federation)
There are also signs of consumers crossing between the two mediums, as Salesforce reported a 9% increase in buy online, pickup in store (BOPIS) orders during the Turkey 5 over the prior three weeks. Retailers with BOPIS grew revenue by 38% more than those without it, Salesforce said.
Top items purchased over the weekend, according to NRF, included clothing and accessories (which were purchased by 50% of those surveyed), toys (31%), gift cards (27%), books, video games and other media (24%), food and candy (23%) and electronics (23%).
When it comes to discounts, 90% said deals were the same or better as last year, while 86% of consumers expect to see great deals throughout the rest of the season.
"It's clear from this past weekend: This is a much more promotional environment," said Shay. “Not only did the return to the sort of pre-pandemic behaviors of being out shopping and doing things in person feel more traditional, but the promotions feel more traditional,. It feels more like the kind of holiday season we had in 2019 and previously where retailers were working hard to get consumers out by providing real deals.”
Direct-to-consumer brands also saw marked growth over BFCM, as Shopify reported global increases in spend above 2021 levels.
In a final report on the weekend, Shopify said merchants that use its software worldwide collectively recorded the following results:
“This year, Black Friday Cyber Monday showed us once again that consumers are voting with their wallets to support the independent brands they love,” said Harley Finkelstein, president of Shopify, in a statement.
BigCommerce, an open SaaS ecommerce platform for B2B and B2C brands, said merchants that use its tools saw big increases on Black Friday. The company reported the following data:
This came after GMV rose 23% on Thanksgiving, while total orders increased 22%, according to BigCommerce.
“Given the soft global economy, this year’s peak holiday sales week is more important than ever,” said BigCommerce CEO Brent Bellm, who noted that “BigCommerce merchants grew significantly faster than overall ecommerce.”