Technology

Information Technologies

      This is the last dimension of quality. VictoriasSecret.com takes many types of security measures like, uses of technologies and policies such as limited access data-centers, firewall technology, secure socket layer certificate authentication and limitations of administrative access to their systems. In addition, their policy is NOT to send the credit card number via e-mail. They designed their page to accept orders only from Web browsers that permit communication through Secure Socket Layer (SSL) technology.

VictoriasSecret.com will ask you to provide personal information when you establish or update an account with them, ask to sign up for Victoria's Secret E-mail, when you shop online they also may ask for your personal information, check the status of an order, request a catalogue, purchase an e-gift card or send a wish list or gift reminder or if you sign up to receive information about their products, promotions and events through text messaging for all that actions Victoria's Secret might ask for your personal information just because they want to provide an excellent service.

Categories of information collected include name, address, e-mail address, recipient's name and e-mail address, order information, telephone number, credit card information and messages or reminders you create.

Also they have a return policy. They know that they have a strong reputation for their quality. But, if for any reason you aren't satisfied with your purchase, they will assist you with a prompt refund or exchange. Their sales aren't final. Refunds for the items returned within ninety days of the purchase date will be credited in the same form as the original payment type. And items returned more than ninety days after the purchase date will be in the form of a merchandise credit redeemable with your next purchase. Unfortunately, customers can't return the merchandise bought through their catalogue or website at the Stores.

     Victoria's Secret uses self- service through the Internet and the catalog. This low contact service allows the customer to use technology. This service allow the customer an easy way to shop at home, Victoria's Secret website offers more products and more selections than the stores, and this help the company to get new customers, because of online promotions and the easy way to get the products deliver. The technology the Victoria's Secret uses in the stores are bar code reader, inventory control readers, and a particular reader that let managers knows how many clients enter and exit the store.

      Victoria's Secret use focus operations, in order of paper handling, they use direct mail to let the customer aware of the new products offer in the store. VS, every month send a coupon of free cotton panties and a $10 off any bra, in regard of demand management, VS use Internet technology, capacity management and client mix.
VS support employees in a very outstanding way. The internal service quality is great because the workplace design makes the employees enjoy and feel comfortable. The reward are also great because every new item the employee get it for free or for a very low cost besides of the associates discounts of 30% or 40% off, which is great because this helps the employee to have a personal experience with the product that she will share with the customer. VS also give recognition to the outstanding employees in every department (intimates, pink, beauty, and cashiers.)

Victoria’s Secret uses iPad

      The Victoria's Secret iPad App is targeted at the consumers who regularly purchase VS merchandise.
     Victoria's Secret receives a significant amount of business from their catalog and online sales. As a result, an iPad app seems like a natural fit. The iPad is expected to have a positive impact on newspaper and magazine sales and in turn, catalog sales will likely benefit from devices such as the iPad as well.
     Beyond interactive pages and simple animations, VS iPad App users have the ability to view prices, availability and style information for the latest fashions. Don't forget about the VS models. The company is well known for using attractive models in their fashion photography and the iPad app doesn't disappoint!

        If you're a woman who currently owns Victoria's Secret products, you're already thinking about them on a regular basis (since you're wearing their products on a regular basis). The iPad app serves a constant reminder to visit their store and check out everything new that they create. The VSAllAccess website invites you to view their ads, so I'm assuming the app will do that as well. That invitation is an even better way to make women integrate Victoria's Secret into their daily lives. They want to create customers that passionately evangelize for them, and so far they're doing a really great job. More power to them.

           

     In 1998, management launched www.victoriassecret.com with little fanfare. The new media

department was headed by Ken Weil, VP, a former department store buyer and veteran of an

Internet professional services firm startup (Proxicom). The new media group of four rolled

out the web site, whose stated goals were twofold: 1) to strengthen and support the Victoria’s

Secret brand and 2) to exceed sales goals. Moving as aggressively online as they did in

initially building the brand, Victoria’s Secret soon became a leader in online innovation. The

web site launched on December 4, 1998 at 6 p.m. Its first order was from Littleton, Colorado

at 6:20 p.m. for $39. This initial site cost less than $5 million to build and launch.

       The web site made a splash with the first large-scale real-time streaming video presentation

of the company’s annual fashion show on February 3, 1999. Tickets to the fashion show, held

annually in New York City, had historically been extremely hard to obtain, and that

enthusiasm translated into incredible interest in the web cast. The company’s public relations

blitz leading up to the show included TV spots, Internet banner ads, and print ads in major

newspapers. A teaser advertisement during the first quarter of the Superbowl in January 1999

generated 1 million web site hits in 30 minutes. It was also the first “dot-com” commercial

ever in a Superbowl. However, the company’s web site and the overall Internet infrastructure

were unable to meet demand during the web cast, crashing networks throughout the United

States. Nonetheless, the event’s huge press coverage earned it Brandweek’s Interactive

Marketing Awards Best Marketing Event.2

        The company invested heavily in back-end infrastructure and technology over the next year

so that the next web cast from Cannes, France in May 2000 was able to handle 2 million

viewers, up from 1.5 million the year before. That year the web site earned top honors in eretailing

performance, beating other well-known brands such as Amazon and PayPal.3 Then

in 2001, the company introduced a combination of streaming video with interactive content

and e-commerce, with a video image of supermodel Heidi Klum talking to customers about

different swimsuit designs as they surfed through the web site and made purchases.

      Today the new media group is staffed with forty people, with an annual budget of over $10

million. Weil explained his build strategy as follows: “While we do partner as appropriate to

build our web site infrastructure, we do a lot internally. For example, rather than licensing

content management software from a company like Vignette, and having to spend a lot of

time and money customizing it, we built one ourselves in-house. We call it ‘WENDI’ for

‘web enabled database for the Internet.’ We wrote the code ourselves for a couple hundred

thousand. And we got 100% of what we wanted. On the other hand, when it came to putting

dozens of servers online to support the live web cast, we partnered with Yahoo! Broadcast to

do it—that saved us enormous effort and cost.”

Victoria’s Secret web store and catalogue were managed as a single unit. From the beginning,

the company tried to leverage its existing infrastructure like a distribution or call center to

operate its web store. Both catalogue and online orders were filled out of its warehouse in

Columbus, Ohio. “From the distribution standpoint, it’s the same model,” said Weil. The

company also tried to link its different sales channels, adding the “order from catalogue”

feature on its web site—shoppers entered an item’s catalogue number to find that item on the

site. In addition, Victoria’s Secret segmented its audience demographically, and delivers

specific messages while refining strategy throughout the campaign. The retailer timed its

catalogue distribution with its e-mails. “Our goal is to provide the same message to the same

customer at the same time,” said Weil. For instance, a customer whose purchase history

indicated a preference for swimwear would receive an e-mail promoting a swimsuit sale and

would get the most recent swimwear catalogue.

This high-impact web presence translated into strong growth for the online division, whose

sales grew from practically zero in 1998 to over $200 million in 2001. Performance metrics

for the web included sales growth, the number of “new to file” customers (i.e., newly

acquired customers), average order size, and purchase rates.

Victoria’s Secret Direct Division

      Organizationally, Victoria’s Secret web group reported to Sharen Turney, President of

Victoria’s Secret Direct, which included both web and catalogue sales.

     Sharen Turney was named Chief Executive Officer and President of Victoria’s Secret Direct,

the brand’s catalogue and e-commerce arm, in May 2000. Ms. Turney brought broad

experience and expertise across the retail spectrum including stores, catalogue, and ecommerce.

She joined Victoria’s Secret Direct from Neiman Marcus where she held

numerous management positions since 1989. Her roles since 1997 included Executive Vice

President for merchandising, creative production, advertising and public relations; and Senior

Vice President and General Merchandise Manager for Neiman Marcus stores. In 1999, Ms.

Turney was named President and Chief Executive Officer of NM Direct, the company’s $322

million direct marketing business, which included the catalogue and e-commerce arms of

Neiman Marcus, Horchow, and Chef’s Catalog.

Despite the overall environment of dot-com hysteria and dreams of instant wealth, Turney

and her colleagues on The Limited executive team resisted the temptation to create a separate Victoria’s Secret company for the online business. Instead they chose to keep the channel

within the Direct family, believing that an integrated, multi-channel approach would support

the brand better than a separate dot-com entity. “We just knew it was right to keep the

catalogue and online business together,” said Turney. “It was never even really a discussion

to do otherwise. Our direction from Les was clear.” Turney matched product styles and

promotions to the catalogue to ensure a consistent customer experience.

Even with integrated goals, “minor fights” still broke out over allocation of costs. Some

catalogue managers argued that the web was not adding incremental profits, but merely

shifting sales from one channel to another. To counter this, Turney was careful to align

management incentives—bonuses were based on Divisional performance rather than channel

performance. Also, she deliberately did not try to calculate the profitability of the web

channel: “The entire Direct Division has a shared vision, shared goals, shared incentives. We

succeed or fail based on Divisional performance. And right now, we’re succeeding.”

Turney also had her hands full within her own Direct division. Integrating web purchases

with catalogue and store sales was not without challenges. Indeed the growth in web sales did

not come without a cost, as customer migration caused cannibalization of sales for the

catalogue and store channels. Victoria’s Secret estimated cannibalization rates as high as 50-

70%, although tracking the actual rate was a difficult task. On the other hand, the web was

proving to be an important vehicle for customer acquisition: although web sales accounted

for 30% of the Direct division’s business, a disproportionate number of “new to file”

customers came from the web. However, similar to the cannibalization problem, it was

difficult to separate channel effects with respect to customer acquisition, for half of webgenerated

new customers also received a “prospect” catalogue. As a result, while the first

order for these “new to file” customers was through the web, it was impossible to know if

they would have ordered online without the offline stimulus of the prospect catalogue.

One thing was clear: web fulfillment costs were cheaper than catalogue orders. Weil

estimated that order fulfillment costs were $3-4 more for catalogue sales than web sales.

However, the ease of ordering meant web sales typically had a slightly lower order size, on

the order of $8 to $10 less, for a net profit gain of approximately $1 to $2 for web

transactions. Although the web had 10% fewer returns than the catalogue.

The task of calculating the impact of the web became urgent as the relatively mature

catalogue business, a longtime source of strong profitability, faced significant challenges.

Mailing costs have increased to approximately $0.60 per catalogue. As a result there was a

premium placed on optimally leveraging mailings to improve business results.

RFM

     A primary tool was a sophisticated algorithm called “Recency, Frequency, and Monetary

Value” (RFM), which was based on the idea that recent shoppers were more responsive to

catalogue mailings, as were more frequent shoppers and those with higher recent order sizes.

The RFM algorithm used each customer’s transaction history to determine which customers

should receive the largest number of mailings based on their calculated propensity to buy as

evidenced by their scores across each of those variables.

    In addition to RFM, sophisticated modeling was used to segment prospects and current

customers. There were models for customer acquisition, retention, and extension. Each

segment had different profiles and costs, and it was a difficult balancing act to set priorities

by segment. For example, although it cost $20 to acquire a new customer and only $10 to

reactivate a previous customer, attracting “new to file” customers was important for the longterm

health of the business, despite the increased costs, as customers in any direct business

were always “rolling off the file.” In addition, 10% of the customer file generated 50% of the

business, so it was also important to cultivate heavy buyers.

Merchandise variables added to the complexity of the business—for example, should a recent

swimwear buyer receive a catalogue all about swimwear, or should she receive another

catalogue instead to expose her to a broader set of merchandise? The type and form of

mailings were other variables: prospect catalogues, “full book” catalogues, mini catalogues,

or printing on cheaper paper or in smaller trim sizes. The possibilities and variations were

indeed endless, all designed to sort the database and merchandise to predict catalogue

response and drive different types of mailings to the most responsive portions of the customer

base.

Victoria’s Secret was as expert in the use of these techniques as any cataloguer in the

business. Still, even with the use of these sophisticated tools, costs continued to escalate. As a

result of cost escalation, there was continued pressure to reduce catalogue mailing expense.

Consequently, while catalogue mailings had increased steadily from 1978 to 1998 to a peak

of over 400 million annually, mailings were actually cut from 1998 to 2002, dropping to 350

million.