Victoria’s Secret has successfully made the journey to global direct-to-consumer commerce. Patrick Bousquet-Chavanne, Chief Executive Officer and President, Americas, at ESW, explains how they did it.
Long before it even began trading online, lingerie, clothing and beauty brand, Victoria’s Secret, was pioneering a direct selling model via its catalogue offering. While the company has, like many brands faced challenges to its traditional retail model, its digital transformation has resulted in it selling into more than 60 countries.
Speaking at the National Retail Federation’s recent Big Show in New York, Chief Operating Officer at Victoria’s Secret, Ishan Patel, shared that optimising a successful Direct To Consumer (DTC) strategy is very complex, almost like a game that you have to keep playing but to which there is no end point. It first requires an understanding of where the market is going to be and constantly striving for that. It also means knowing what the consumer mind-set is going to be, what’s happening with the competition and what adjustments need to be made.
There is a marked difference between what the company used to offer and what it does today. Its catalogue heritage had enabled it to create brand resonance overseas, with Victoria’s Secret shipping via mail order to more than 200 counties before they were selling online. This early foray into cross-border DTC was in sharp contrast to the highly localised digital service it offers its international customer – before, it only offered payment in US dollars with no foreign language translation and only accepted US-centric payment providers.
In 2014, Victoria’s Secret doubled down on its DTC strategy and moved into five international markets - Canada, Australia, the UK, France and Germany - and then latterly Spain - offering localised language, currency and merchandising. And today, those markets have developed into an international operation that spans more than 60 countries — most recently embracing diverse locales such as Israel and India — selling in 40 currencies and offering more than 20 payment types.
DTC is now clearly a business imperative, but it is wrong to assume that a brand will automatically travel internationally. Brands need to work to ascertain the size of the customer base and to diligently research demand – on segmentation and specialism – to establish which markets will be the most lucrative.
Localisation and customer experience remain the keys to international success. There is no country called international; the brand has to go country by country, market by market and understand that in each distinct market there will be variables and synergies and distortions from home market that need to be understood.
In order to create loyal customers in new markets, it is essential to get the initial experience right from the very start - creating trust during the checkout process by removing hidden fees and providing clear delivery dates, providing a variety of secure payment methods and fast returns and refund processing.
This is borne out by ESW’s (formerly eShopWorld) recent Global Voices: Cross-Border Shopper Insights survey of nearly 15,000 consumers which showed that for more than a third (32%) of respondents who reported concerns around the cost of returns and the length of time to receive a refund, these were barriers to making a cross-border DTC purchase.
Brand equity in new markets should not be taken for granted, it needs to be earned and built. However amazing the brand or the assortment, if customers get to the checkout and there is friction, they are quite likely to abandon cart. And once they have moved ahead to purchase, the after sales experience must be seamless; local ability to return quickly, to ensure the customer’s credit is applied as quickly as possible, gives them one less reason to say no and it reduces the barrier of entry to the brand.
Ultimately, brands need to avoid learning the hard way. They must be able to trade in an international market at least as well as they can locally in their home market or they are simply trading on their brand equity rather than building on it.