There are some stores where the price you see is the price you pay. At others, you know there are always coupons and deals available so you never have to pay full price.
Victoria’s Secret has long been known as the latter. Now it’s making yet another attempt to be known as the former.
It was around this time last year that the then-new CEO announced a turnaround plan to reverse years of declining sales. “We are absolutely looking for opportunities, anywhere we can, to be less promotional,” Hillary Super said.
Earlier this year, the company updated investors on its “journey to reduce promos,” as Chief Financial Officer Scott Sekella promised fewer “gifts with purchase, and a pullback on our traditional promos, percent off-type deals.”
By this summer, Sekella reported progress on “more thoughtful discounting,” “more targeted promotions,” and “driving more regular price sales.”
And now, one year into the new strategy, the company says it’s working. Sales and earnings are rebounding, as “the Victoria’s Secret brand proposition of sexy, glamorous and luxurious is clearly resonating,” Super told investors. “The customer is responding, returning and reengaging with the brand.”
And they’re apparently happily paying full price, and then some. “By connecting emotionally with the customer, we’ve been able to increase regular price selling, pull back on promotions and execute select strategic price increases,” Super explained.
Sekella called it “emotion versus promotion.” Appealing to new customers who aren’t discount-driven has allowed the company to show increased strength in “regular price selling and a pullback in traditional promotions.”
So the strategy may be working, for now. But this isn’t the first time the company has tried – and failed – to cut back on coupons and promotions. It was nearly a decade ago when Super’s predecessor said “we abused our brands at Victoria’s Secret by promoting endlessly and endlessly.” So the retailer tried selling more at full price.
And shoppers weren’t so sure that’s what they wanted. “If you’ve promoted the brand by sending out millions and millions of coupons that say $10 off everything, and you suddenly stop that, it would be like being off of drugs or something,” the CEO admitted.
And, just like drugs, it turned out that coupons were a hard habit to break. Within a couple of years, Victoria’s Secret abandoned the new strategy and brought the coupons and deals back.
Today, the retailer’s new management says this time is different. Dialing back the deals is “a multiyear journey,” Sekella said. “I think we’re still in sort of the early middle innings on the promotional pullback.”
Super emphasized the newer, younger customers who are discovering the brand and aren’t as worried about deals. “They’re coming into the brand based on product, brand and emotion and not on promotions,” she said.
Time will tell whether they continue to do so – or whether the “drug” of coupons and deals will once again prove too tempting to resist.
Image source: Phillip Pessar 
