Victoria's Secret model bags

L Brands reorg sets stage for a seamless shopping future

It’s common in conversations with retailers today to hear about a given chain’s pursuit of a seamless shopping experience, regardless of where or how a purchase is made. While most seem to talk the talk these days, there are those making the attempt, at least, to walk the walk. A case in point is L Brands, parent company of Victoria’s Secret, which announced a reorganization plan to bring together current store operations and its various consumer direct options into unified business divisions.

Going forward, L Brands will restructure into three business units: Victoria’s Secret Lingerie, PINK and Victoria’s Secret Beauty. The company will integrate its direct to consumer business, primarily online, within each of the three divisions. Plans call for the company to focus more on brand-building and loyalty programs than discount offers and print catalogs.

While most reorganizations occur when companies are facing headwinds, L Brands decision comes after posting positive results. L Brands achieved a total sales increase of five percent year-over-year for the nine weeks ending April 2. Same-store sales during the same period were up four percent.

“Coming off a record year, now is the best time to make improvements … going from best to even better,” said Leslie Wexner, chairman and CEO of L Brands, in a statement. “We are making these changes to accelerate our growth and to strengthen the business for the long term by narrowing our focus and simplifying our operating model. I am certain that these changes are necessary for our industry-leading brands to reach their significant potential.”

BrainTrust

"Hats off to L Brands for realigning their business by including their online business within each of the three divisions when business has been up."

Adrian Weidmann

Managing Director, StoreStream Metrics, LLC


"Simplicity is different than seamlessness. Making things seamless often ends up making them more complicated."

Ian Percy

President, The Ian Percy Corporation


"I think doing this is as much about removing channel conflict and competition as it is achieving a seamless shopping experience. Not only do these different channels have different customer offers and policies, but they spend vast time and resources trying to beat the other channel within the same company!"

Doug Fleener

President and Managing Partner, Sixth Star Consulting


Discussion Questions

DISCUSSION QUESTIONS:
How far along are most retailers today in achieving the seamless shopping experience that most state as a goal? Do you think the organizational steps being taken by L Brands will move that company in the right direction to offer customers a seamless shopping experience?

Poll

9 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Adrian Weidmann
Adrian Weidmann
7 years ago

Hats off to L Brands for realigning their business by including their online business within each of the three divisions when business has been up. It makes tremendous sense and aligns with the way shoppers perceive and interact with the brands. Shoppers don’t categorize or define the experience, they simply want an easy, seamless and delightful shopping and buying experience. It’s also easier to proactively make changes when business is good as opposed to waiting to fix a problem. There will be challenges and disruptions so it is best to address these hurdles when business is good.

Tom Redd
Tom Redd
7 years ago

Seamless is still a rough road for most retailers. The internet/mobile are a big part of this play, but still very critical to the success of seamless retail is the overall retail platform and a SVT regarding each customer’s activity across all channels. In addition the supply chain has to have a fast and dynamic element to assure that the seamless designs get the right product out to the right people.

 

Brian Kelly
Brian Kelly
7 years ago

Wexner remains the leader in specialty retail because he remains fixed on exceeding the expectations of his customer. From The Limited through the portfolio of brands, then selling off the portfolio and now to shopping on her terms. Most retailers are not close to the goal because few understand their customer to the level of detail of Wexner’s team. They are more disciplined, motivated and focused on what drives success. And he takes calculated risks.

Ian Percy
Ian Percy
7 years ago

Adrian said it well. I am thrilled to hear Chairman Wexner point out that the best time to re-invent or transform an organization is when it’s at the top of its game. As Canadians, years ago, we were horrified when Wayne Gretzky was traded when he was the world’s most amazing scorer on the ice. Still haven’t gotten over it but it’s the same principle. With over 40 years of consulting under my belt, I’d say that this kind of insight was evident in less than 1 percent of my clients. They always waited until they were in deep trouble to reorganize the deck chairs.

Second, I’m not sure “seamless” is the word to describe what L Brands is doing. Wexner sums the plan up as, “narrowing our focus and simplifying our operating model.” Simplicity is different than seamlessness. Making things seamless often ends up making them more complicated. For example, people can’t simply shop anymore, they have to arm themselves with technology.

Honestly, I think trying to coddle the customer so they have instant gratification no matter what their whim is overblown, maybe even a mistake. We’re developing a society where any inconvenience sends people apoplectic. Our energy is better spent on creativity and innovation, on differentiating the business. Of course we want to provide excellent service but I suggest that we’re looking at this out of fear. It’s like assuming customers will go on a hike only if there’s a paved path with no inclines.

Robert Hilarides
Robert Hilarides
7 years ago

I applaud the move but have to highlight the delicate balance between “shopping experience focus” and “leveraging synergies” across the business units (where I’m sure there is considerable cross-purchasing). We’ve seen the pendulum swing back and forth between focus and synergy strategies for decades, and Victoria’s Secret must be careful to hold onto the baby while it dumps the bathwater. How does the organization support insight sharing across business units? How does it facilitate bundling or cross-purchasing? How are e-commerce best practices applied across the business units? These are very solvable problems but take concerted planning.

Doug Fleener
Doug Fleener
7 years ago

I think doing this is as much about removing channel conflict and competition as it is achieving a seamless shopping experience.

Not only do these different channels have different customer offers and policies, but they spend vast time and resources trying to beat the other channel within the same company! This conflict cost the company sales, profits and customers.

Hats off to L Brands for doing this, and to the internal teams for moving forward with what’s best for the company and the customer.

Karen McNeely
Karen McNeely
7 years ago

First off, Leslie Wexner has always been my retailing idol. I love that at 78 years young he is still relevant and shaking up the status quo.

Sadly, most retailers are better at talk than at execution. Many executives would learn a lot by attempting different transactions for themselves to better understand the customers’ point of view and get a very clear picture of what their company’s challenges are and how they could be fixed.

Most of retailing is common sense. Men like Wexner and Michael MacDonald at DSW (another retailer I admire) know this.

Chuck Palmer
Chuck Palmer
7 years ago

Breaking down internal barriers is a major first step, and including those numbers in the public reporting will get everyone (internal and external) more closely focused on THE customer’s experience rather than MY customer’s experience — store vs. catalog vs. web/mobile.

The loyalty programs will be the linchpin. These programs cross channels and give the consumer a sense of engagement even when they aren’t in a purchasing mode. L Brands has taken and will likely take more steps to move more and more customers into those programs. This allows for more intimate dialog with their customers and deep data to inform the business.

Look for more presence of the loyalty programs in stores and the store staff being armed with more information about individual customers. We might even see a level of personalization that makes it easier for consumers to procure and shop alike.

Ken Morris
Ken Morris
7 years ago

L Brand is on the right path to improving the seamless customer experience. Consolidating departments will help eliminate organizational silos that make the delivery of a true omni-channel experience challenging. However, that is just one piece of the puzzle. They will also need to transform their technology to effectively achieve a seamless commerce experience. The ideal strategy is to consolidate the technology for all channels onto one unified commerce platform. Another critical piece is training sales associates on new processes that converge the digital and physical shopping environments. It takes a lot of heavy lifting to do it right!

The reality is that while many retailers are trying to offer omni-channel services, most of them are not doing it very successfully. For example, according to BRP’s 2016 POS Survey, while 60 percent of retailers indicate they have implemented “inventory visibility across channels,” 80 percent of those retailers indicate that the system “needs improvement.”

Many retailers have taken the “just get something done” approach to deliver a seamless customer experience that transcends channels. The unfortunate result of this quick fix approach is a faux omnichannel model that doesn’t execute as promised and has the risk of disappointing customers.

Saddled with legacy systems that are not designed to accommodate today’s retail environment and their islands of automation, retailers have scrambled to cobble things together in attempts to deliver the omnichannel capabilities customers expect. Retailers need to invest in infrastructure, networks and a service-oriented architecture (SOA) layer and do it right. The risk of losing customers due to disappointing shopping experiences caused by a flawed omnichannel architecture is deadly and that is why “real” unified commerce is retailers’ top priority for 2016.