economic downturn

Why The Lingerie Industry Can’t Compete With Victoria’s Secret

Source: http://www.businessinsider.com/victorias-secret-will-beat-competition-2013-9

victoria's secretVictoria’s Secret is facing a deluge of competition from lingerie start-ups that seek to challenge the brand.

Brands like AdoreMe, Intimint, and True & Co. are trying to seduce Victoria’s Secret customers with lower prices and more tailored selections.

AdoreMe offers direct-to-consumer lingerie at about half of Victoria’s Secret prices.

Intimint asks customers to take a quiz and sends them new lingerie selections every month, based on their preferences. True & Co. sends women five bras a month, giving them the option of keeping what they like and sending back what they don’t.

While these brands are consumer-friendly and creative, their business models ignore exactly what makes Victoria’s Secret so successful.

In the ’90s, Victoria’s Secret used to focus on value. But the brand floundered because there was nothing to set it apart from other price-friendly brands like Hanes and Maidenform.

Victoria’s Secret didn’t start dominating lingerie until it stopped being cheap and began focusing on the customer experience.

Stores were redesigned with soft, pink wallpaper and inviting fitting rooms. Friendly, attractive associates were trained to greet customers and measure their bra sizes.

Women were willing to pay $50 for bras because the luxury experience made their lingerie purchases feel like investments.

This attention to customer service helped Victoria’s Secret overtake competitors like Frederick’s of Hollywood and ! post rec ord sales even during an economic downturn.

AdoreMe CEO Morgan Hermand-Waiche told Business Insider that “people are so tired of high prices and slow-fashion from Victoria’s Secret.”

But Victoria’s Secret’s sales suggest differently: The brand recently reported a 6% increase in the second quarter, on top of a 10% increase last year. That’s among the best in the retail industry.

Women don’t line up at Victoria’s Secret because it’s cheap or has an ever-changing assortment of merchandise.

They trust the brand and feel like a trip to a Victoria’s Secret store is a treat.

Victoria’s Secret offers an experience that e-commerce retailers simply can’t compete with.

 

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Monday, September 2nd, 2013 news No Comments

This is what happens when 99% of the inefficiencies are cut out of a system (advertising industry)

Update: Including Q3 09 numbers

Source: http://adage.com/agencynews/article?article_id=140125

While no holding company’s results are pretty these days, Interpublic Group of Cos. last week posted particularly poor numbers, swinging to a net loss of over $35 million for the first nine months of 2009 from almost $60 million in profit during the same period in 2008. IPG’s third-quarter revenue fell 18% compared to declines of 14.4% at rival Omnicom Group, 8.7% at WPP (factoring out the effect of acquisitions and currency shifts) and 5.3% at Publicis Groupe. WPP’s reported revenue, including revenue from its big Taylor Nelson Sofres acquisition, rose 16.7%. In the same quarter, net income attributable to IPG tumbled 47.3%, more than double the drop of Omnicom (down 22.5%).

wasted-ad-dollars

Google changed the game by changing the business model from paying for impressions to paying only when the advertiser gets the click.  This helped to cut out the 99% of waste and inefficiency which existed in the industry.


WPP Profit Dropped 47% in Second Quarter More Than Half of Company’s Revenue Came From Nontraditional Advertising

NEW YORK (AdAge.com) — Using words such as “severe” and “surprise” to describe the recession’s impact on its business, WPP, the world’s largest advertising conglomerate, today said its profit was down 47% for the second quarter. And WPP Chief Executive Martin Sorrell said it will be a while before marketing executives begin to spend and take chances the way they did just a few years back.

FULL ARTICLE – Source: http://adage.com/article?article_id=138673

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In a first half earnings statement released this morning, WPP Group announced that digital and direct marketing-related services now comprise 25% of its body.

WPP Group owns labels like 24/7 Real Media, Mediaedge:cia, MediaCom, Mindshare, GroupM and Outrider.

Digital and direct garnered $1.7 billion in revenues in the first half of ‘09, with a projected annual run rate of nearly $3.5 billion total. But it is digital media and advertising that appear to be dominating the segment.

Overall, first half revenues fell 2.9% to $6.4 billion in the first half on a reported basis, MediaPost reports. Like-for-like, however, total revenues slid 8.3% against the first half of 2008.

According to WPP, traditional advertising and “media investment management” have been the hardest-hit amidst the economic downturn.

“On a constant currency basis, advertising and media investment management revenues fell by 7.5%, with like-for-like revenues down 7.8%,” it stated.

Branding and identity, healthcare and specialist communications — which includes direct, internet and interactive — were least affected.

The media conglomerate committed to prioritizing the growth of digital communications, customer insights and strong geographic markets.

Related topics: Online Advertisers, Data Updates,

Sourcehttp://www.marketingcharts.com/updates/digitaldirect-marketing-now-25-of-wpp-group-10211/?utm_campaign=rssfeed&utm_source=mc&utm_medium=textlink

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Thursday, August 27th, 2009 digital 1 Comment

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