Emerging Markets

Panty Raid: A rundown of the new lingerie players putting the pressure on Victoria’s Secret.

Known for its resistance to economic downturns, you’d be accurate in describing the lingerie market as a stable one. Take the five years between 2011-2016, as an example: During this stretch, the US intimates market jumped from $10.3B to $12.4B, and the Western European market grew from $13.9B to $14.5B.

Still, these numbers only tell half the story. Frankly, with the decline of establishment luxury companies — Victoria’s Secret sales have plummeted, and Agent Provocateur has filed for bankruptcy in the US — the intimates economy is in flux.

With these troubles, the market isn’t expected to post record-shattering growth in the near future. But there is a shimmering, silver lining in all of this: As VS and Agent Provocateur have stumbled, a new group of modern luxury lingerie upstarts have pushed their way into the market — and in many ways have even exacerbated traditional brands’ problems.

Who are they – and how are they faring?

We’ve focused on three brands for this report in order to help frame the piece for you. Note, however, that under the modern luxury banner, there are several more upstarts that bear mentioning, particularly Negative Underwear (New York), Lively (New York), Journelle (New York), and True & Co. (San Francisco). This list continues to expand by the quarter. Below, some growth numbers for the following:

  • Beija London
    Founded: 2016
    Location: London
    Growth: Declined to disclose
  • Third Love
    Founded: 2013
    Location: San Francisco
    Growth: Revenue grew 1600% from 2015 to 2016. On track for 500% growth in 2017
  • White Rabbit
    Founded: 2016
    Location: New York
    Growth: “We’ve been in business for about a year and half, and have seen roughly 5x growth y-o-y,” co-founder Mariana Hernandez told us.

New consumer preferences (and how these brands are capitalizing).

To be sure, Victoria’s Secret’s recent decline is symptomatic of an overall shift in what consumers are now looking for from the intimates brands they buy from. As the story goes, women are evidently no longer drawn in as much by the allure of busy storefronts and televised spectacles like the Victoria’s Secret Fashion Show. They prefer their intimates brands emphasize a focus on them as the customer, rather than it being about how “cool” the brand in question is. As this publication has written many times before, this is what happens when a market opens up and becomes consumer-centric.

In response, lingerie upstarts are using an entirely different marketing and messaging set up that breaks considerably from their established predecessors. New brands are dispensing with oversexualized positioning to place the focus on the functionality of the product, and on serving wearer.

Here’s how this is playing out:

Big brand cachet matters far less now. “Consumers are becoming more astute,” said Abbie Miranda, co-founder of Beija London. They’re more discerning and less likely to be impressed by brand cachet. “They know the economic benefits of investing in independent brands over large chains and they are looking for a more emotional connection when parting with their money.”

Desexualizing the product. According to Emily Piskulick, associate content marketing manager at Third Love, brands like Third Love had downplayed the sexual side, and are instead placing greater emphasis on performance, for instance. “Our marketing is targeted at this modern woman…through photos and videos that show the functionality of the product.” This is a common trait with brands across the board.

More inclusive imagery. New players are also marketing their products through concepts like worldview and lifestyle, as opposed to strictly sex appeal. Beija London’s Miranda explained this well to us: “A goal [of ours is] to reflect a broader variety of women in the imagery used for selling.”

*Alternate view: Playing devil’s advocate.

Though these new values, consumer preferences, and messaging tactics all sound nice, not everyone is convinced this is an accurate depiction of new brands’ success. “The most significant shared characteristic among the current crop of start-ups has to be access to the funding, PR, and connections of Silicon Valley,” said Cora Harrington, founder and editor-in-chief of The Lingerie Addict, a key publication dedicated to the space. “It’s less that these upstarts are reinventing lingerie (after all, a bra is a bra is a bra), and more that they’re able to tell a good story, which journalists who are less familiar with the space see as something new and exciting…even if it’s not,” It’s an observation that’s duly noted here at Lean Luxe, and is a pattern within other sectors as well, not just lingerie.

Operations: Beyond branding and messaging.

Beyond the storytelling, a key difference between modern luxury brands and established players in the space concerns supply chains. Operating at a smaller scale, lingerie’s new players are digitally native and direct-to-consumer. They’re marked also by a data-savvy, though transparent, relationship with their target audience. As such, they pride themselves on the following:

On being nimble. Lingerie MLCs are actively engaged in a dialogue with their consumers (and the market in general), in a richer way that can extend far beyond simple surveys. “We can speak to them directly, we can react to the weather, to social trends, to sales day-to-day, and we can respond to those,” Beija Flor’s Miranda explained to us. Indeed, a big advantage smaller brands have over their larger counterparts is their reaction time. “We are able to quickly inform new product developments — for example, adding additional sizes, higher rise styles, etc,” White Rabbit co-founder Mariana Hernandez told us.

Offering a better selection (by way of data). Bra shopping is hardly a one-size-fits-all process. By rejecting standard industry size templates, upstarts are finding success by tying in data to their supply chain decisions. “We design and fit our bras using real women’s measurements and millions of data points including breast shapes and fit issues,” said Third Love’s Piskulick. This informs not only manufacturing quantities, it also helps to determine product ranges themselves. For instance,“[Third Love] discovered that 50% of women fall in between standard cup sizes, so we invented ½-cup sizes.”

On being online-first. For a product category where fit is of the utmost importance, many consumers, understandably so, were initially reluctant to buy online. “When we first launched White Rabbit, we encountered more resistance to buying underwear online,” said Hernandez. In response, she introduced a Comfort Trial program, in the vein of other online brands like Warby Parker, where consumers are issued a full refund if left unsatisfied. So far, it’s working well. Hernandez claimed that those who are aware of the initiative were four times more likely to buy.

On being consumer-centric to the core. You can argue that the shortcomings of established brands can (partly) be attributed to leadership, which has lost touch with new intimates consumer. Piskulick explained that you can really tell the difference in brands and products that are created by the core consumer for that target audience. Such is the case for each of these companies.

Predicting the future.

There are questions about the future prospects of the category. While the numbers provided might sound strong, some observers of the space aren’t convinced that their impact has really that significant. Harrington, for once, is very skeptical. “I think it’s easy to mistake a robust media presence for market penetration, but getting a lot of press isn’t the same as selling product,” she argued. “While I’m sure it sounds nice to position these brands an industry game changers, the honest truth is they’re minor players.” For now at least.

What about acquisitions? M&A activity for lingerie could heat up. Earlier this year, PVH, which owns Calvin Klein and Tommy Hilfiger, acquired True & Co. Even now, the breadth of the lingerie market is owned by about seven firms: Victoria’s Secret, Aerie, Wacoal, Chantelle, Natori, PVH Corp, and Komar Brands.

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