I’ll be working with a FinTech company for Field 2, so I had to click on this post! Cool company. I love the idea of providing financing to underbanked populations, it’s a big global market out there. I wonder, though, if Kueski’s low default rate today is due to their being discerning of creditworthiness right now, and whether they can remain selective if/when they start seeing their originations growth slow down over time.
I was curious about the same thing on VS’s targeting strategy! Based on investor communications, I gather that VS is increasingly targeting a younger woman with the goal of retaining her over her lingerie-shopping years. The 10-k, for example, describes Victoria’s Secret’s approach as one that “markets products to the college-aged woman with PINK and then transitions her to glamorous and sexy product lines.” Their launch of PINK lines, and their deliberate choice of which sizes to carry, favors a younger woman too. I do think attrition naturally happens in that transition from college woman to professional woman, increasingly a pain point for VS as you pointed out.
On VSFS – I’m always amazed how much attention it gets. It’s brilliant marketing.
I wasn’t familiar with Net-A-Porter before, and this was a great read. I especially liked your discussion around how the company grew up from a start-up to a maturing model of “software-controlled ballet of man and machine.” Not all companies can make that transition efficiently.
Good questions! 1) It’s true – retail expansion is expensive, and there’s also some saturation risk. I think there will be two key avenues for growth: the online platform, and international expansion. The challenge with the former is the increasing competition (lower barriers to entry). The challenge with the latter is finding the right partners. Currently, VS has a small presence in 70 countries through franchise, licensing, and wholesale partnerships that help de-risk the international operations. 2) My best guess is they’ll react by improving the online channel, squeezing supply chain costs, focusing on the design process, and retaining their key designers. I think their “right to win” in the medium-term will remain in the brick-and-mortar retail experience. But I’m very interested to see how much share the pure e-commerce players will gain and how rapidly.