For a long time, Victoria’s Secret was pretty much the only game in town when it came to far-reaching lingerie brands. But eCommerce has changed that, and emerging startup Adore Me is in prime position to take on the big guys (and/or gals).
The lingerie business is booming, thanks in part to Adore Me — a startup that has posted double- and triple-digit growth over the past few years and has shaken the lingerie industry to the core with its fast-fashion model, savvy digital strategies and inclusive “customer-first” mentality. Does this online brand have a chance at overtaking Victoria’s Secret? Experts are starting to say yes.
Adore Me burst on the e-scene (as it were) in 2011, founded by Morgan Hermand-Waiche. The monthly subscription plan entitled shoppers to a bra and panty set each month at a $39.99 price point. That price point and the brand’s wide selection resonated with consumers, and the wide variety of sizes and styles was another big draw. Unlike its rival, Victoria’s Secret, Adore Me seemed to be inclusive of all body types and made its customers (regardless of cup or panty size) feel like they belonged.
Customers responded, and, by 2012, the company was bringing in $1.1 million in annual sales. One year later, the company had shown more than 5x growth, bringing revenues to $5.6 million, and, in 2014, it more than doubled those numbers again, raking in $16.2 million. In 2015, the company brought in an estimated $43 million, making Victoria’s Secret’s 62 percent market share seem catchable.
It’s no wonder, then, that the company claimed the number 14 spot on Inc.’s Top 5,000 list in 2015 overall and took the number two ranking for top retail brands.
But besides a wide selection and inclusive mindset, what’s the secret to the brand’s success? As a purely digital player up until now, it has had a distinct advantage, being able to remain agile and execute rapid rounds of A/B user testing to uncover what its customers are really interested in when it comes to offering new products.
In a recent interview with CNBC, Sharon Klapka, Adore Me’s vice president of business and brand development, described another secret to the company’s success: "Adore Me has been disrupting the lingerie industry [all along], thanks to its ability to create a personalized experience online." As she goes on to explain, on the site, each Adore Me shopper gets what amounts to a curated lingerie showroom tailored to their specific style and size preferences, ensuring they don't get lost in a sea of lingerie.
And now, Adore Me is looking to recreate the winning online experience in its first brick-and-mortar retail space, opening on April 5 in New York City, where the company also happens to be headquartered. As Klapka goes on to describe to CNBC, in the new store, shoppers will get a "one-on-one" 45-minute consultation with a lingerie expert who is trained to listen to their style needs, fit them to find their true bra size and help make the perfect lingerie purchase for them.
"We strongly believe this is a highly engaging experience with an unmatched added value in today's lingerie shopping landscape," Klapka said. "Particularly when the appointment is completely free of charge and you can buy the perfect set for only $39.95."
Victoria’s Secret currently operates 3,000 retail stores globally, with 99 percent of those reportedly being cash flow-positive, according to another CNBC article. As that story shares, some of the brand’s biggest obstacles are around bringing its full catalog of styles and sizes to stores, with 800 of its 1,200 U.S. locations not carrying the full product offering. Operated under parent company L Brands, whose stock reached an all-time high of more than $100 in early Nov. 2015, the specialty store's stock was reportedly up more than 20 percent over the past year, demanding a price more than 24 times higher than its earnings.
Adore Me is hoping to continue to differentiate itself from its rivals, having already surpassed longstanding lingerie contender La Perla in sales. It has already shown signs of doing so, using its digital mentality of testing and iterating in its approach to offline brick-and-mortar retail. Earlier this year, the brand operated a pop-up showroom in NYC, coinciding with the Valentine’s Day holiday and launching its limited edition Valentine’s collection in-store.
"It was a great way to test how we could translate our super-customized experience offline," Klapka said. "The response was overwhelming. We booked about 50 appointments during those three days."
Whether customers continue to respond positively will be evident in the months to come, but — for right now — things are looking perky for this upstart brand.