In the article, “Free! Why $0.00 is the Future of Business”, Anderson discusses the strategy Gillette used to get customers to buy into the idea of disposable razors. One strategy Gillette used is the bundling option. This not only forced the product into consumer’s hands, but it catapulted the brand to where it is now.
This bundling/pricing strategy reminded me of another company using the same idea but for a different end goal. Victoria Secret, as we all know is the household name for all things flirty, fun, and young. Recently, L Brands, the parent company of Victoria Secret, reported record low sales. Most importantly, this was reported after their highly anticipated Semi-Annual Sale.
“The No. 1 U.S. lingerie label, known for its “Angels” and the glitzy annual fashion show broadcast worldwide during the December holiday season, on Thursday reported a 1% decline in comparable sales in the five weeks ended July 7, after lower demand for its bras and the Pink label targeting college-age customers offset gains in its beauty products. That drop extended a streak of mostly declining comparable sales the chain has reported since 2016.”
Victoria Secret’s downfall is their promotional pricing strategy. Loyalists (or an Angels Reward Member) and frequent buyers are aware of the bi-annual sale and are now waiting for the sale to snag their desired lingerie wear. Another pricing strategy that could be damaging the brand is their bundling offers. As an Angel Card holder, I find it difficult to now shop at Victoria Secret if there isn’t an incentive or a discounted rate. Why? Because I know eventually, there will be a sale. Victoria Secret offers pricing including; two for one deals, purchases $100 worth of clothing for a free blanket, and 7 for $35 undergarments.
I recommend that L Brands reevaluates their pricing strategy and implement a dynamic pricing strategy. As the No. 1 brand for lingerie, Victoria Secret has the advantage to change the overall pricing structure of this industry.