The Victoria’s Secret mall stalwart announced a beauty retail partnership with Amazon on Friday, following in the footsteps of other brick-and-mortar brands experimenting with third-party partnerships.
While some shoppers returned to malls in 2021, indoor mall foot traffic in January was down 12.2% from January 2020, according to Place.Ai. In turn, many mall-centric brick-and-mortar brands like Victoria’s Secret, Gap or Sketchers are seeking additional sales through wholesale and retail partnerships.
Victoria’s Secret’s partnership with Amazon is the 45-year-old retailer’s first foray into third-party retail. In August, the beauty and lingerie retailer spun off as a separate company from Bath and Body Works. In the fourth quarter, Victoria’s Secret sales increased 4% year-on-year to $2.2 billion. On Amazon, customers can buy perfumes and lotions from Victoria’s Secret and the Pink sub-brand.
“Through customer feedback and research, we’ve heard from consumers wanting to buy VS Beauty from Amazon’s store and already researching the product on the site,” said Greg Unis, CEO of Beauty at VS&Co via a Press release. “This is a natural channel extension for us to continue to grow our beauty business and meet customers where they are with the products they love.”
Gabriella Santaniello, founder of retail consultancy A-Line Partners, said the partnership would help Victoria’s Secret get exposed to more shoppers across more channels. Santiello added that “by reaching such a large audience” the company would be able to “identify what works and what doesn’t work faster.”
Beauty, Santaniello said, is an easier category for the retailer to try third-party distribution because it doesn’t have the right shades of lingerie.
Like Victoria’s Secret, clothing retailer Gap has also used third-party retail to highlight one of its lesser-known product lines: Gap Home. In June, Gap spear a home décor, bedding and bath collection sold exclusively at Walmart. In October, Gap and Walmart extended the collection to furniture and rugs.
When the partnership was first announced, Walmart Vice President Anthony Soohoo Told CNBC that the collection was not a capsule but rather “a relationship that we believe we want to build, that lasts for us.”
Indeed, in an announcement about the expansion of the collection, Gap’s head of strategic alliances, licensing and real estate, Adrienne Gernand, said there has been “an incredible response from customers to Gap Home “. Gernand added, “Through our partnership with Walmart, we are rapidly growing the business by entering new categories in the home space.”
For Gap, the partnership allowed the primarily apparel-focused retailer to try out a new category at a new lower price with a wider audience. According to SimilarWeb, Gap.com recorded 55.2 million visits in February 2022, while Walmart recorded more than seven times with 415.8 million visits.
This isn’t the first time Gap has experimented with using other retailers to promote a new brand. In 2018, for example, Gap spear the Hill City men’s activewear brand through its own store as well as select wholesale partnerships with companies such as Need Supply, Neighborhood Goods and A Runner’s Mind. Just two years later, however, Gap shut down the concept, citing Covid-19 budget cuts.
Other mall brands are focusing on growing their wholesale channels while brick-and-mortar competitors are focusing on direct-to-consumer sales. For example, wholesale has become an increasing priority for Sketchers as sneaker giant Nike withdraws wholesale inventory in preparation for its shift to direct-to-consumer sales.
After 30 years in business, Sketchers reported record first-quarter profit last week, with sales up 26.8% to $1.82 billion. For the first time, Sketchers launched both wholesale and direct-to-consumer sales. Wholesale trade outpaced DTC sales with growth of 33% vs. 16%, respectively. Wholesale trade in the US and EMEA, in particular, both grew by 40%. Additionally, wholesale sales also saw the strongest growth in 2021 and the fourth quarter, according to executives at Sketchers.
In the brand’s first quarter results last week, Sketchers chief financial officer John Vandemore explained that the retailer was selling more products at higher prices to its retail partners. Sketchers COO David Weinberg, meanwhile, explained that this was possible through a specific investment in “increased staff” dedicated to wholesale.
Sketchers is also working to expand its wholesale business to more regions and products.
At the end of 2020, Skechers UK and Ireland Managing Director Peter Youell Told fashion trade publication Drapers Sketchers was launching wholesale clothing in the region for the first time and investing in marketing to drive consumers to UK partner retailers for footwear and clothing. In January, meanwhile, Sketchers COO David Weinberg announcement the brand’s intention to increase wholesale in the Philippines.
Still, the US wholesale market in particular generated gains for Sketchers in the first quarter, with wholesale sales in that region up 40% year-over-year. “Wholesale performance in the United States rose sharply on double-digit improvements across all genders and across most categories, reflecting strong consumer demand and retail sales, as well as improved product availability. products and our ability to receive and process additional inventory,” Weinberg said during the retailer’s first-quarter earnings call last week.
Santaniello thinks other brick-and-mortar-focused brands — especially those with a large mall presence — could also try new third-party retail experiences or increase their third-party investments in the future.
“Mall traffic has been declining for decades,” Santaniello said. “It becomes the exposition…you have to go where the eyeballs are.”