The following Information I extracted from Mintel helped me to better understand the lingerie market as a whole: how my chosen brand performed in latest years, how their main competitors did, how important advertising is and what the main trends are.
"Victoria’s Secret continues to face criticism that its strategy is outdated as the retailer continues to underperform. Victoria’s Secret’s parent company L Brands reported a 3% decline in comparable sales in its 2017 fiscal year, negatively impacted by Victoria’s Secret exit from the swim and apparel categories during the year. However, the retailer is performing much better in the UK. The latest accounts filed at Companies House reveal that Victoria’s Secret’s UK arm saw sales increase 24.3% to £132 million in 2016. We expect this strong growth trajectory to have been sustained in 2017 as the retailer continues to expand its geographical coverage and reach new customers.
"Victoria’s Secret continues to face criticism that its strategy is outdated as the retailer continues to underperform. Victoria’s Secret’s parent company L Brands reported a 3% decline in comparable sales in its 2017 fiscal year, negatively impacted by Victoria’s Secret exit from the swim and apparel categories during the year. However, the retailer is performing much better in the UK. The latest accounts filed at Companies House reveal that Victoria’s Secret’s UK arm saw sales increase 24.3% to £132 million in 2016. We expect this strong growth trajectory to have been sustained in 2017 as the retailer continues to expand its geographical coverage and reach new customers.
The retailer has been making significant adjustments to its
product assortment, axing swimwear and apparel whilst minimising the number of
soft bralettes within its range as it looks to play to its strengths. This
appears to be having a positive effect, with L Brands reporting that comparable sales for the
first quarter ended May 2018 increased 3% year-on-year.
Although Victoria’s Secret continues to report substantial
sales growth in the UK, figures suggest that this growth is being driven by new
store openings, with sales per outlet thought to be on a downward trend since
2014. We also expect a similar theme to have taken hold at Bravissimo
in 2017, as the retailer has rapidly been expanding its store portfolio during
the year, opening a net of four new stores in a challenging retail environment.
In contrast, Ann Summers has
continued to see an uplift in like-for-likes since 2014. Although the retailer
has reduced its store portfolio in recent years, total sales have been on an
upward trend. In the year ending June 2017, revenues rose 7.4% to £109 million,
with sales boosted by the retailer’s Party Plan business. This side of the
business reportedly saw a renewed popularity following the ITV comedy-drama
series Brief Encounters, which aired in July 2016 and
documented the beginning of the Ann Summers brand by telling the story of four
women who began selling lingerie and sex toys to women in the privacy of their
own homes in the early 1980s. This resurgence in the Party Plan business has
therefore helped to offset store closures, though we expect the impact of the
series to soften in future as no further series of the programme are planned to
help sustain interest.
Figure 28: Leading
specialist underwear retailers’ estimated UK sales per outlet, 2012-17
2012 2013 2014 2015 2016 2017
£000 £000 £000 £000 £000 £000
Victoria's Secret UK 3,917 10,937 11,294 8,864 8,260 8,098
Ann Summers Ltd 815 718 760 761 848 950
Bravissimo Ltd 2,127 2,161 2,300 1,964 2,010 2,000
Boux Avenue 1,068 1,420 1,589 1,675 1,734 1,759
Calzedonia Group UK* na na na na 914 957
Rigby & Peller
Ltd 1,147 1,086 1,074 913 883 867
Agent Provocateur Ltd 1,348 1,849 1,979 na na na
We also ran a repertoire
analysis on this data to identify the extent to which consumers tend to shop
around for underwear, nightwear and loungewear. The research suggests there are relatively high levels of
brand, or at least retailer loyalty, in the sector. One in two consumers
(48%) have shopped with just one retailer for underwear, nightwear or
loungewear in the last year.
This aligns with relatively
low average spend per person (see How Much They Spend) and
together these two datasets imply that purchasing frequency is low within this
market.
Analysing this data by
demographics, we can see that men are significantly more likely to shop at one
retailer (54% have done so in the last year) whereas women shop around more.
Meanwhile, a similarly pronounced trend appears by age, with older shoppers
more loyal to just one retailer, whilst younger shoppers buy underwear,
nightwear and loungewear products from a variety of different retailers. This
lesser brand loyalty amongst young shoppers could well erode the dominance of
players like M&S and Primark in future as young people will likely retain
their preference for shopping around as they age and appear to be much more
experimental in their underwear purchasing than their older counterparts.
M&S is the market leader
in the UK underwear,
nightwear and loungewear market by some distance, driven by the retailer’s
dominance in the women’s underwear market. We estimate that M&S captures approximately 20% of
consumer spending on underwear, nightwear and loungewear. However,
M&S’s strength in this category does appear to be softening as the retailer
faces increased competition in the market.
One of the defining trends
in the UK fashion market in the last
year has been the shift towards greater inclusivity and this is having a big impact on the underwear
market. There has been a significant uplift in digital advertising in
the market and this has
given underserved consumers more of a voice, which in turn has placed
pressure on brands to use models that better represent their customer. As a
result, there has been much more diversity in underwear advertising, which we
expect to become the norm.
Brand research reveals that Triumph International-owned brands Triumph
and Sloggi garner the highest levels of trust amongst UK consumers,
with both brands strongly associated with offering good value and consistent
high quality. Victoria’s Secret and Calvin Klein also scored highly across a
number of key attributes, with these brands most likely to be seen as
trend-setting, stylish and worth paying more for. Meanwhile, Heidi Klum Intimates and Curvy Kate suffer from more limited
brand awareness.
In 2017, Triumph International
overtook M&S to become the highest spending company in terms of on
underwear and nightwear advertising in the UK. This increase in
expenditure aligns with the group’s new global strategy, which the company
announced in mid-2017. The transformation programme, which we discuss in more
depth in the Competitive Strategies section, was conceived to capitalise on the
full growth potential of each of Triumph International’s brands by operating
them as separate business units, with their own dedicated sales and marketing
teams. Therefore, a significant increase in expenditure was perhaps inevitable.
In contrast, UK underwear market leader M&S significantly
reduced advertising expenditure. During 2017, the retailer’s marketing strategy
underwent a significant transformation, unveiling a new campaign which united the
retailer’s food and clothing divisions under a single tagline and philosophy
for the first time in its history. The new “Spend It Well” tagline which was
unveiled in May 2017 was designed to promote M&S as a retailer that offers
value for money by focusing on quality experiences. Ahead of the campaign,
M&S spoke about its intention to promote a shared attitude that connects
with consumers regardless of age or demographic. The adverts sold an attitude
rather than targeting a specific age group, as the retailer looked to offset
criticism that it continues to market itself at too young an age group. This
shift in advertising strategy likely played a significant part in the
retailer’s reduced advertising spend on certain product categories, such as
underwear, as it looked to promote a message as opposed to specific products.
Elsewhere, Tesco,
Intimissimi, Calvin Klein, Bravissimo and Victoria’s Secret were amongst those
that significantly increased expenditure on advertising underwear and nightwear.
Meanwhile, Wacoal, Debenhams and Asda all reduced advertising spend on the
category, but again it is worth noting that this may be due in part to
increased promotion on social media as opposed to other marketing channels.
Figure 35: Total above-the
line, online display and direct mail advertising expenditure on underwear and
nightwear, by leading advertisers, 2013-17
2013 2014 2015 2016 2017
£000 £000 £000 £000 £000
Triumph International 725 902 1,443 437 1,504
Marks & Spencer 803 1,704 2,555 1,860 677
JML Direct 1,692 644 62 - 543
Intimissimi 317 385 449 215 454
Asda Stores
226 65 72 1,109 445
Calvin Klein 409 83 95 35 429
Boux Avenue
320 386 408 228 267
Fashion Forms
21 26 - - 177
Freemans Grattan Holdings - - - 118 176
Tesco 781 110 - 2 171
House of Fraser 123 - 8 - 73
Bravissimo Lingerie - 5 165 2 53
Under Armour - - - 18 51
Wacoal 516 371 229 196 51
Debenhams - 34 423 663 50
Victoria’s Secret - 175 241 13 42
JD Williams 150 249 141 31 39
Solendro - - - - 35
Agent Provocateur 12 37 28 19 30
Maison Lejaby 1 - 1 - 21
Others 1,417 1,832 1,851 1,280 250
Total 7,512 7,008 8,171 6,226 5,538
Total above-the line, online
display and direct mail advertising expenditure on underwear and nightwear, by
media type, 2017
Estimated
consumer spending on underwear and nightwear, by category, 2018
As the chart above
illustrates, womenswear
continues to dominate the UK underwear, nightwear and loungewear market, accounting
for approximately 70.2% of total spending.
Whilst menswear accounts for just 29.8% of consumer spending, growth in this
segment is outpacing womenswear as more men are becoming invested in their
personal appearance. This combined with the increased focus amongst UK retailers on menswear
has fuelled growth in a number of key menswear categories, including underwear,
as men have more choice than ever before
In the last year there have
been a couple of particularly high-profile brand launches. In May 2017, it was
announced that Agent Provocateur co-founder Serena Rees was set to launch a new
underwear label later in the year, and the Les Girls Les Boys brand was
officially unveiled in September 2017. The new label is designed to be gender-fluid and a fusion
of underwear, nightwear and streetwear. The product assortment comprises
bras, briefs, bodysuits, rib jerseys, t-shirts, vests, pyjamas, boxer shorts,
hoodies and joggers, available in sizes XS to XL, with retail prices ranging
from £20 to £120.
This was followed in May
2018 with Rihanna’s Savage x Fenty launch. Ahead of the unveiling we discussed
the possibilities of the brand in our Analyst Insight Is Rihanna about to disrupt the
lingerie market? – 24 April 2018. However, since that was
written the first collection has been officially launched, with much acclaim
and confirming many of our suspicions. The new brand has been praised for its body-positive
approach, offering products in wide range of sizes, alongside nude
underwear in a wide range of tones. Bras are available in UK sizes 32A to 44DD, with other lingerie, underwear and
loungewear products coming in sizes XS to 3XL. The range is also designed to be
affordable and accessible to as many consumers as possible, with prices
starting at £10.60 and shipping available to 210 countries worldwide. There is
also a membership scheme available for £36.80, giving consumers access to free
shipping, early access to new products and limited-edition items for a year and
the brand launched a pop-up in London in June 2018 to give it more exposure.
Prior to this a number of brands with a sustainable focus launched
in 2016, including Copenhagen-based Woron and Lara Intimates. Woron currently
has over 40 stockists across Europe, including three sustainability-focused
retailers in the UK. Lara Intimates
is a UK-based business that uses
industry off-cuts to produce its lingerie garments, currently only operating
online."
Source: Mintel 2019
Source: Mintel 2019
No comments:
Post a Comment