Retail Management, Essay Example

Wal-Mart and Victoria’s Secret

Wal-Mart

Founded in 1962 by Sam Walton, Wal-Mart has grown to become a worldwide icon for low-priced consumer goods. In 2003, the retail chain’s earnings topped $244 billion, making it the largest corporation in the world (Funding Universe, 2010).  Wal-Mart buildings, signage, and retail ambiance are all consistent with the company’s tagline “Always Low Prices.”

Wal-Mart stores in the US are typically located within large, free-standing, unassuming buildings with huge parking lots.  The company’s logo has changed five times in its history with the most current version being rolled out in 2008.  The new logo abandoned uppercase lettering in favor of lower case, eliminated the hyphen, and added generic-looking yellow sunburst.  Business Week contributor Jana (2008) quotes a typography expert as saying; “Lowercase letters tend to be interpreted as more casual and approachable.”  No-one really knows what the sunburst means, but Jana suggests it might be a casual statement about the company’s evolving “green” policies.

The inside of a Wal-Mart store is typically well-lit with high ceilings and devoid of any particular color or branding décor.  The ambiance is not as industrial-looking as “warehouse” stores, but the high ceilings and sheer size of the space suggests to shoppers that they are in a big store with lots of products at low prices.  Wal-Mart floors are usually polished concrete with patches of carpeting and laminate flooring providing “separate” shopping areas for clothing and other items.  Some Wal-Mart stores use vinyl-composition tile (VCT) in the food section mimicking the flooring generally found in supermarkets.

The fixtures and flooring found in Wal-Mart departments are virtually identical to those found in specialty stores selling similar products.  People are accustomed to shopping for clothes on carpeted floors with chrome clothes racks, mirrors on end-caps, and attended dressing rooms.  Wal-Mart sells clothing in precisely the same atmosphere.

The same strategy applies to other departments within the store.  With VCT flooring, glass-front refrigerators, deep shelving, deli counters and island-refrigerators, Wal-Mart’s grocery department has the “feel” of a standalone supermarket.  As the largest grocery retailer in the US, Wal-Mart wisely configures this department on a far side of the store thus requiring customers to pass by a host of household, clothing, jewelry and other items on their way to the milk isle.

Wal-Mart’s target customers are middle-class consumers to whom price and value are important.  The atmosphere in Wal-Mart stores is clean, well-organized, but not fancy.  The company’s growth strategy over the years has included an emphasis on placing stores in small towns rather than large metropolitan areas, and being a one-stop-shop for local residents.

Wal-Mart services can include automotive shops, vision centers, beauty salons, photography studios, pharmacies, health clinics, restaurants and banks.  Combine these services with a wide variety of retail goods and groceries, and a customer might never need to shop anywhere else.  Wal-Mart has obviously excelled in the concept of one-stop-shopping.  A Wal-Mart Supercenter is much like a modern-day general store on steroids.

There are some things Wal-Mart does not provide that it perhaps could.  For example, Wal-Mart does not sell wedding apparel.  However, given the company’s strategy of selling a vast range of high volume low-cost items, products like wedding dresses or tuxedos would fall outside that model.  Wal-Mart thrives on high inventory turns with tight margins.

There is however, one service that Wal-Mart does not offer but might be capable of.  This is an outside-the-box idea and perhaps one that would make some cringe.  Wal-Mart is the world’s leader in logistical efficiency and widespread cost control.  Given the nation’s current “crisis” in this area, one wonders about the job Wal-Mart could do in opening a chain of branded healthcare facilities.  It sounds a little crazy, but the concept of high volume products and services at low costs might make a “Wal-Care HMO” just what the doctor ordered.

Victoria’s Secret

Typically located in major shopping malls, Victoria’s Secret is to say the least, gender-specific. A person walking through the mall in search of anything but women’s intimate apparel or fragrances would not give the Victoria’s Secret portal a second glance. The store is quintessentially feminine.

The first Victoria’s Secret was launched in San Francisco in 1977 by Roy Raymond who felt that lingerie was too personal a product to be sold in a department store.  According to FragranceX (2010) Raymond wanted to “establish a cozy, inviting atmosphere similar to that of a Victorian boudoir.”  The company was purchased in 1982 by Limited Brands.  The new owners kept the concept of highly personalized service but changed the image of the brand from Victorian to “tres chic.”

Victoria’s Secret stores are modern and sophisticated with an avant-garde ambiance.  The Formica and chrome fixtures found in most clothing stores are replaced with glass shelving adorned with mirror-strips.  Lighting is bright and progressive often using indirect lighting on white coffered ceilings along with wall wash effects.  The walls are dotted with racy black-and-white photos of slim, sexy, young women wearing lingerie and lacy bras.  As the company’s signature color, pink is prominent throughout the stores.

Mannequins have played a significant role in the company’s product display.  In her article, Hansen (2003) stated that the company withdrew from the usual bust-displays and worked with a mannequin company to “develop realistic mannequins with sexy, provocative poses.”  Much like the controversy over Abercrombie and Fitch’s provocative advertising, Victoria’s Secret gained notoriety and criticism regarding their lifelike scantily-clad displays.  The company capitalized on this controversy by hosting sexy fashion shows and using supermodels minimally adorned with Victoria’s Secret apparel.  While the company has recently “toned-down” its highly sexualized displays, stores still have a sexy, chic ambiance without making the customer feel uncomfortable.

While the company does produce some of its lines in “plus sizes” their primary target demographic are young attractive women and the men who buy lingerie and fragrances for them.

Sales associates do not wear uniforms of any kind, but are dressed in attractive business type clothes.  Customers are greeted warmly and made to feel comfortable.  Personal service is paramount for this retailer.  When purchasing bras or other apparel, women can consult with a sales person in relative privacy.  Men purchasing apparel or fragrances for their significant other are also welcomed with a professional deportment, easing their anxiety.

While customers consult with sales staff in “relative privacy” there are still no totally private places to talk about matters that may be uncomfortable for some.  If for example a man is purchasing an intimate apparel item for someone, much of the sales process happens on the floor.  Having a private consultation room or cubicle might make the initial process more inviting.

While the protests of some regarding the store’s overtly sexy mannequins helped to popularize the brand, the fact that most stores are located in family-friendly shopping malls has prompted the company to become more conservative in this area.  This trend is evidence of a marketing strategy that is customer-sensitive should be continued.

In essence, Victoria’s Secret sells sexy underwear and nice fragrances that are, like most apparel and perfumes, manufactured abroad.  A consumer could purchase similar products at any number of other retailers for far less.  The company’s store designs shout “high-end.”  This keeps Victoria’s Secret in the relatively small club of companies selling veblen goods.  Like Starbucks and Mercedes, the very fact that Victoria’s Secret products are expensive insures continued patronage by “exclusive” customers.

Victoria’s Secret should continue to present itself as being the premier brand in its market.  Maintaining that status (and the markups that come with it) will require a constant finger on the pulse of the market and a willingness to continually update its store image to keep on top of current trends.

References

Fragrancex. (2010). History and background of Victoria’s Secret. Retrieved from http://www.fragrancex.com/products/_bid_Victoria–Secret-am-cid_perfume-am-lid_V__brand_history.html

Funding Universe. (2010). Wal-Mart Stores Inc. Retrieved from http://www.fundinguniverse.com/company-histories/WalMart-Stores-Inc-Company-History.html

Hansen, A. (2003, March 31). Victoria’s Secret. Retrieved from http://vmsd.com/content/victorias-secret

Jana, R. (2008, July 4). What does Wal-Mart’s new logo mean? Business Week, . Retrieved from http://articles.moneycentral.msn.com/Investing/Extra/WhatDoesWalMartsNewLogoMean.aspx?page=1

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