Home' INSTYLE Magazine : INSTYLE SPTOCT 2016 Contents In the 50s and 60s, underwear
was dowdy. Lingerie -- if you ever
owned any -- was reserved for your
honeymoon or an anniversary
night. Never for every day. Fast
forward and it's anything but boring,
sometimes frivolous, and often on show.
So what (or who) transformed an
entire category by turning innerwear
into outerwear, stretching practical into
fashionable and, in the process, made sexy
mainstream? e world's best-known,
bestselling and most profitable lingerie
brand, Victoria's Secret.
But that's not how it started. Targeted
solely at men shopping for their wive's
underwear, its 1977 beginnings were a
little odd. Despite that, it grew, primarily
on the back of its 42-page mail-order
catalogue, but poor profitability pushed it
In 1982 a new owner took the helm
-- one who sensed that lingerie had
unrealised potential -- as fashion. Leslie
Wexner discarded the unprofitable
business model and revamped the brand
to appeal to women. Stores quickly spread
across the newly malled suburbs of
America and the brand began its pattern
of making a stir. e lingerie business was
Five years after the purchase, Victoria's
Secret had transformed from a three-store
boutique into a 346-store retailer. Wexner
had created a market where none existed.
He built a New Luxury brand.
NEW LUXURY TRADING UP
For the majority of us, Old Luxury isn't
reachable. Never has, never will be. So,
we're trading up.
What does that mean? Authors Michael
J. Silverstein and Neil Fiske noticed more
and more people were choosing to pay a
premium for a few high-end goods and
sacrificing other parts of their lifestyle for
eir 2003 book called "Trading Up"
uncovered the phenomenon and they
accurately predicted the growth of an
'affordable' luxury market across almost
every category. ey believed that people
were "...willing, even eager, to pay a
premium price for remarkable goods
that we call -- New Luxury -- products
and services that possess higher levels of
quality, taste, and aspiration than other
goods in the category, but are not so
expensive as to be out of reach."
How does it work? New Luxury items
range from a few dollars to thousands.
You trade up in one or two categories that
are important to you and your self-worth,
and your other (unimportant) purchases
become selective. Across those categories,
you trade down to the low-cost or private-
label brand, or even go without.
According to Silverstein and Fiske,
" e combination of trading up and
trading down leads to a disharmony of
consumption ... she may shop at Costco
but drive a Mercedes, for example, or
buy private-label dishwashing liquid but
drink premium Samuel Adams beer."
Translation? A disproportionate amount of
your income is spent just in the category/s
that hold great meaning to you. e rest
means nothing, so you pay little.
What else? New Luxury brands defy
the traditional (low) volume ceiling
for premium products. By emotionally
engaging with customers and connecting
on a ladder of benefits, the "New Luxury
'sweet spot' enables them to move off the
THE NEW LUXURY BRAND
Victoria's Secret has elevated the price and
position of lingerie to unprecedented heights.
Who was it and how did they do it? Neil Osborne
reveals how a three-store company used the
'trading up' phenomenon to create a New Luxury
brand -- and a big-money empire.
traditional demand curve and achieve
high margins and high volumes at the
Wow: High prices, increasing demand,
big profits and loyal customers. Does that
mean any non-traditional brand can go
luxury or vice versa, that any luxury
brand can launch its own affordable line?
Let's uncover a few of Victoria's Secret
affairs to see what we can learn...
ALL BODY NO BRAINS?
Early on, Wexner established an ethos
of never underestimating his customer.
"Most of the women that I knew wore
underwear most of the time, and most of
the women that I knew would rather wear
lingerie most of the time, but there were
no lingerie stores," Wexner explained to
Newsweek. "I thought if we could develop
price points and products that have a
broader base of customer, it could be
Victoria's Secret filled the huge white
space in the market that was unspoken
for. It made lingerie mainstream and along
the way pushed innovation, lifted quality,
made seasonal changes and delivered a
flawless customer experience.
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