Victoria, Don’t Keep a Sustainable Supply Chain Story a Secret
Victoria’s Secret has an opportunity to double down on a more sustainable supply chain while catering to changing consumer preferences
Why Victoria Cares
At the beginning of 2017 Victoria’s Secret published a policy statement on its website in response to the Rainforest Action Network’s (RAN) “Out of Fashion” campaign, that called for the reduction of man- made cellulostic fibers that are procured via methods that lead to significant deforestation [1,2]. Such forest- based fibers include rayon, viscose and modal, which are materials commonly used by many popular fashion retailers. RAN’s campaign specifically called on several large fashion retailers to critically assess their supply chains and work to stop contracting with suppliers that exercise unsustainable forestry practices to produce cellulostic fibers [3]. RAN’s call to action merited the attention of Victoria’s Secret for several reasons:
- Ethical Responsibility: Deforestation contributes to climate change and, when presented with the option, Victoria’s Secret has an ethical responsibility to make choices that will reduce its carbon footprint [4].
- Growing Awareness and Preference: Due to increased messaging from watchdog agencies, consumers are becoming more aware of companies participating in unsustainable business practices. Further, several studies examining the buying preferences of millennial customers have shown that they display a preference toward sustainable brands and are even willing to pay a premium for sustainably sourced products [5].
- Future forest and land scarcity will lead to rising prices: With increasing government regulations and increasing demand for land, deforestation sourcing practices will become more costly to suppliers. As a result of the increasing scarcity of land, suppliers are likely to increase the price of raw materials that stem from deforestation.
A Swift Response
Victoria’s Secret, led by parent company L Brands, was swift to respond to RAN’s call to action. RAN publicly acknowledged these efforts on their website and called on more companies to follow suit. In a statement Victoria’s Secret issued, they committed to the responsible sourcing of man- made cellulosic fibers. They are working with suppliers to ensure they do not knowingly source fabrics that contribute to deforestation. They hope to achieve this goal by the end of 2017. Their L Brands Forest Products Procurement Policy states that the Company will show preference to suppliers that use a variety of more sustainable supply chain practices [6].
In the medium term the Policy states that with regard to incumbent suppliers, failure to provide information or engage in identified improvements will result in non-renewal of contracts and may result in contract termination. L Brands closes the Policy document by stating that they are committed to the continuous improvement to further long term environmental, social and economic practices [2,6].
RAN’s “Out of Fashion” Campaign Could be in Vogue:
Firstly, Victoria’s Secret and L Brands should be applauded for their commitments to sustainability in response to RAN. As an early responder amongst retail giants, the company’s actions set a positive example for others. Victoria’s Secret has an opportunity to rise even more prominently, however, in response to RAN’s challenge.
Victoria’s Secret could use the RAN campaign as an impetus to tweak their product lines to meet changing consumer demands. After L Brands’ most recent earnings report showed a decline in same store sales, analysts noted that a survey of customers with waning affection for the Victoria’s Secret brand cited that the brand felt “forced” or “fake” [7].
In the short term, Victoria’s Secret should launch a consumer facing campaign and announce firm targets around their efforts to convert to forest- friendly materials. The Victoria’s Secret Angels serve as powerful influencers amongst millennials and the company should leverage this platform and visibility to educate consumers about the positive environmental impact that they are striving toward by switching to sustainably sourced materials. To supplement the campaign, the Company could introduce a line made entirely of forest- friendly materials in tandem with untouched photos responding consumer desires for a more natural look. In addition to revising the look of the apparel to be more aligned with consumer preferences, the campaign would provide an opportunity for millennials to shop in a more eco- conscious manner—something surveys have revealed they are willing to pay for [5].
In the medium term, Victoria’s Secret should continuously gather consumer insights regarding forest friendly materials and develop additional product lines using sustainable materials. Not only should Victoria’s Secret show preference toward more sustainable cellulostic fiber suppliers but they should actively work to move toward more sustainable raw materials and recycled materials. As a longstanding giant in the industry, they have the ability to leverage their scale to lead the industry toward a more sustainable supply chain.
If a Tree Doesn’t Fall in a Forest and No One Sees it…
Given that Victoria’s Secret is known for its intimate apparel, which is not visible to the public eye, does the sustainability value proposition still hold for millennials who might be looking to display their eco-conscious values more publicly?
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Sources:
- Ellen Wulfhorst, “Exclusive: Lingerie maker Victoria’s Secret looks to uncover supply chain issues” Reuters, January 19, 2017. http://www.reuters.com/article/us-fashion-landrights-victoriassecret-ex/exclusive-lingerie-maker-victorias-secret-looks-to-uncover-supply-chain-issues-idUSKBN153372 Accessed November 12th, 2017
- L Brands, “Forest Products” https://www.lb.com/responsibility/environment/paper-and-forest-products) Accessed November 11th, 2017
- Christy Tennery-Spalding, “Introducing: Out of Fasion”, The Understory, September 4th, 2014. https://www.ran.org/introducing_out_of_fashion_a_campaign_for_forest_friendly_fabrics
- Lauren Bennett, “Deforestation and Climate Change”, Climate Institute, April 18 2017. http://climate.org/deforestation-and-climate-change/ Accessed November 12th 2017
- Neilson Global Research, “Green Generation: Millennials Say Sustainability is a Shopping Priority” November 5, 2015. (http://www.nielsen.com/us/en/insights/news/2015/green-generation-millennials-say-sustainability-is-a-shopping-priority.html) Accessed November 14th 2017
- L Brands, “Forest Products Policy” https://www.lb.com/binaries/content/assets/pdfs/responsibility/environment/lb-forest-products-policy-dec2015_gc_trm_rancmts_v4_no-header_web.pdf Accessed November 11th 2017
- Tonya Garcia, “Victoria’s Secret losing customers on price and bralettes won’t bring them back” Market Watch. September 14th, 2017. https://www.marketwatch.com/story/victorias-secret-losing-customers-on-price-and-bralettes-wont-bring-them-back-study-says-2017-09-13 Accessed November 14th 2017
You raise an interesting point to consider how much value of a sustainable product purchase is based on the consumer’s desire to make a conscious purchasing decision or for the sake of advertising their “green” purchase. And as you mentioned, intimate wear is difficult to have the public recognition but I do believe that females who are conscious of where their purchases come from will be motivated to make these purchases. Interestingly though, Victoria Secret does not seem to be advertising their move towards sustainable movement, making it indistinguishable to customers. Do you think this is by design in an effort to maintain a sense of continuity? If prices go up without justifying the increase to customers, how will Victoria Secret build their loyalty base?
Perhaps it is too early for them to be overly bullish towards consumers given that this a recent decision by the brand. Interestingly, seems like many brands, including Nike, faced public pressure from Green Peace’s “Detox My Fashion” 2016 campaign for not taking active actions towards sustainable practices. With a new CEO that took helm just last year and given that Victoria Secret has been in a downward slump in the last few years, with recent earnings per share down nearly 30 percent from last year, I question whether Victoria Secret’s response to RAN was just to salvage their plummeting PR and market value. I worry that the breadth of L Brands to be more accountable for their raw materials may be short-lived. Or perhaps some L Brand brands will take greater accountability for their supply chain while others continue their exhausting manufacturing practices. With numerous young companies in the eco-friendly lingerie space (Pansy, Brook There, Sloane & Tate, etc.) and given that most of the eco-conscious consumers are millennials, if Victoria Secret doesn’t focus on communicating their sustainable efforts, they may be too slow to react and begin losing their foundational base of customers.
Their commitment in response to the activists is defensive, and not offensive. This commitment has not accomplished its goals yet, and even when it does Victoria’s Secret should not use their sustainability thrust in outright marketing promotions. Sometimes you can do the right thing without the “pomp and circumstance,” I think a more subtle labeling approach is the correct way to go. I think the brand may suffer it appears they are “Going Green for Green” $:)$
You and your commenters raise interesting points, @MarieCalguri.
You mention using the Angels as potential influencers to communicate the steps Victoria’s Secret has taken towards eco-friendly fashion. While I agree this would be an effective strategy, I’m unsure these influencers would put their personal brand on the line to position Victoria’s Secret as an environmentally friendly brand. I avidly follow Gisele Bundchen, one of Victoria’s Secret most famous angels, on social media. More often than not, her posts tout the importance of embracing wildlife, saving forests (and more specifically, the Amazon) and spiritual fitness. The gowns she wears and posts are always sustainably created. She is perhaps as equally known for her environmental awareness efforts as for her modeling career.
Yet despite her long history with Victoria’s Secret, she hasn’t posted about Victoria’s Secret efforts to go green, and aside from the annual obligatory VS Fashion show posts, I’ve haven’t noticed her mention the brand in her posts. This leads me to wonder if the Victoria’s Secret brand is too steeped in “sexy.” Echoing @D.R.Rockwell, a sudden pivot to “go green” may cause this intimate apparels line to be viewed as inauthentic.
Your article reminds me of the IKEA case we discussed in class. Both cases dealt with a similar issue – to what extent does a business’ sustainability practices reflect pure altruism or an inauthentic marketing scheme? As we discussed in the IKEA case, there was a preemptive effort on behalf of the company to lead the way in sustainable supply chain, both due to public interest and to sustain its business model. In the case of Victoria’s Secret, it appears that their sustainability efforts are purely reactionary. But actually, to me, their swift response to RAN and minimal promotion of their actions signals a more altruistic attempt to evolve their supply chain without risking their brand image and the need for a “pat on the back”.
Moreover, I don’t believe that Victoria’s Secret should necessarily promote their sustainability initiatives given their “sexy” brand image. Consumers who are committed to ethical and sustainable lingerie can do a simple Google search and find many brands that will appeal to them. However, right now, eco-friendliness is usually accompanied by a more wholesome brand image. Although Victoria’s Secret can lead the way in combining sustainability and sex appeal, I think a brand turnaround like that is a very risky proposition for a retailer that is currently struggling to stay afloat.
If I were Victoria’s Secret’s management team, I would follow a similar approach to what they’ve already done in terms of sustainability in their fabric supply chain: play defense just enough to ward off terrible PR, position yourself to take greater control of your supply chain should regulations increase over the next couple of years, but don’t re-brand entirely or push the ‘eco-friendly’ image on consumers.
If there were a clear economic reason for Victoria’s Secret to pursue sustainable fabrics, I’d be more sold on pushing aggressive policies (and perhaps market them to consumers), but at this point, I can’t find research that suggests margin pressure due to more expensive fabrics. And since ‘eco-friendly’ is a stark deviation from their current brand positioning, I see no incentive for the management team to pursue. Given this, I doubt Victoria’s Secret will make much progress on sustainability in the short-term.
Thanks for the post, Marie. I had no idea Victoria’s Secret was running into these issues or facing this criticism. While I understand where much of the pushback comes from in the comments above, I do think that a new “environmentally-friendly line” as you suggest, could be effective here. Some have mentioned that Victoria’s Secret is seen as too sexy — I viewed the creation of the “Pink” line to be a direct response to that. Victoria’s Secret could easily launch a new and separate brand to draw in some of those consumers who would be attracted to environmentally conscious fabrics. On the other hand, to their existing customer base, I think it could serve as an education mechanism. Many consumers have no idea that this issue should even be on their minds. I think having a product set that addresses these issues could work well.
Thank you for an interesting read. I do agree with you that their efforts to increase sustainability in their business is important from the three perspectives that you mention. I am not so worried about the fact that customers, due to the nature of the product, can’t market their sustainable choice to others. On a side note, I do think there are other ways that they can communicate that they have purchased an “eco-friendly underwear” by for instance communicating this on social media (e.g. joining VS “sustainability lingerie club” or something similar…). But, more importantly I do think that the value of this strategy lies more within the perception of the customer – in my opinion millennials see this as a hygiene factor and increasingly demand that the brand cares about more than profits.