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Victoria's Secret vs Chanel: Which Blockbuster Show Has Better ROI?

The multi-million-dollar fashion extravaganzas went head-to-head in Paris this week, right in the middle of the holiday shopping season.
Source: Costanza Milano for BoF
By
  • Chantal Fernandez

PARIS, France — The Victoria's Secret Fashion Show and Chanel's Métiers d'Art runway extravaganzas went head-to-head in Paris this week, with the American lingerie brand's made-for-television fashion spectacular (recorded at the Grand Palais in late November) airing on CBS the day before Chanel took over the newly refurbished Paris Ritz. Though their strategies are quite different in important ways, the Victoria's Secret and Chanel shows were both very expensive to produce — costing millions of dollars each — and aimed to drive positive brand perception, media impressions, retail (and e-tail) traffic and sales.

Though a representative for Victoria's Secret declined to disclose the amount of money the company invested in the production, the last time Victoria’s Secret staged its annual Fashion Show outside the US, traveling to London in 2014, reports put the cost of the event at about $20 million, up $8 million from what it reportedly cost the brand to produce the show three years prior in New York.

CBS is said to pay over $1 million for the rights to the show, which this year featured performances by Lady Gaga, The Weeknd and Bruno Mars and appearances from a high-profile cast of models including Adriana Lima, Gigi Hadid, Bella Hadid, Kendall Jenner and Irina Shayk. Two runs of the show were taped on November 30 and edited for the television broadcast on December 5.

Meanwhile, Chanel's 2016/17 Métiers d'Art show was staged at the (newly renovated) Paris Ritz, where Gabrielle "Coco" Chanel lived for some 35 years. Three runs of the show — dubbed "Paris Cosmopolite" — took place over the course of the afternoon and evening on December 6. Models included Lily-Rose Depp, Pharrell Williams, Georgia May Jagger and, in a rare appearance, Cara Delevingne, who turned down an offer to walk for Victoria's Secret.

The cost of staging Chanel's Métiers D'Art shows — which each December celebrate the artistry of the traditional maisons that create the house's embroidery, feather-work, buttons, beading and more — can vary dramatically depending on Karl Lagerfeld's specific vision for the spectacle. A representative for Chanel declined to disclose production costs for this week's show. But sources familiar with the company's budgets said costs have previously ranged from $2 million to over $10 million.

So which show delivers better return on investment?

“This kind of investment, in today’s world, can pay a lot," said Mario Ortelli, a senior luxury goods analyst at Sanford C. Bernstein. “If you do something spectacular, you have millions of people that are looking at your catwalk, streaming on Snapchat, on the various platforms."

To get a relative gauge on the impact of these shows, BoF enlisted social-media monitoring and analytics firm Brandwatch to track the performance of Victoria’s Secret and Chanel before, during and after their respective events. (Brandwatch gathered current data from Twitter, Facebook and Instagram, as well as news sites, blogs and forums, with historical data pulled from Twitter.)

The Victoria’s Secret Fashion Show was mentioned over 104,000 times between the reveals of the first model castings and the day before the taping, during which the conversation focused on models with massive social media followings, like the Hadid sisters, and spiked around the announcement of the performers on November 1st, which garnered more than 21,000 mentions.

Top Victoria's Secret Fashion Show topics the first two days after it aired on CBS. | Source: Brandwatch

In the weeks directly leading up to the show, Victoria’s Secret had emphasised its models’ training regimens through content tagged #trainlikeangel, which in turn promoted Victoria’s Secret’s activewear line. The company also created a major media moment by flying the models and plenty of photographers to Paris three days before the show in a branded private jet filled with champagne, mini French flags and Victoria’s Secret merchandise. Of course, the models themselves also took to social media to record the journey. During this period, 96.1 percent of Victoria’s Secret brand mentions online were positive.

As runway images, clips and teasers flooded the web between the taping and the television event, the Victoria’s Secret Fashion Show was mentioned about 859,000 times online. The conversation again focused on popular models, specifically Bella Hadid and Adriana Lima, and their backstage beauty prep, which provided as much content as the show itself. The day of the CBS broadcast, the Victoria’s Secret Fashion Show was mentioned over 497,000 times. Eighty five percent of mentions in the first two days after the airing were positive.

Meanwhile, the online conversation about Chanel before, during and after the Métiers d’Art show was significantly smaller. In the month leading up to the event, the show was mentioned just over 1,400 times, but 100 percent of that conversation was positive. While the brand did little to build anticipation online, it did reveal the show’s title and post an image of Ms. Chanel.As a result, “The Ritz Hotel" and "Gabrielle Chanel” became the most talked about Chanel-related topics on Twitter, Facebook and Instagram.

Lagerfeld also guest-edited the December 2016/January 2017 issue of Vogue Paris, which landed on newsstands the day before the show and included an editorial starring Kirsten Stewart at the Ritz. But the widest possible reach was, perhaps, not Chanel's goal. The show was not live-streamed, much less televised. Instead, editors and celebrity guests such as G-Dragon, Willow Smith and Rowan Blanchard provided the most immediate access to the show via their own social media accounts. In the first 24 hours after the presentations started, the show was mentioned online over 8,500 times. In the days following the event, Chanel also uploaded its own editorial-style content.

To be sure, stills and clips of the Métiers D'Art show are valuable assets for Chanel. "At the end of the day, you need content," Bruno Pavlovsky, Chanel's president for fashion, told BoF in a previous interview. "We need more and more content to keep alive the emotion that we offer to our customers."

Top Chanel topics the first day after the Métiers d'Art show. | Source: Brandwatch

“It’s a vehicle for the image of the brand, to increase attention to the brand and especially traffic in stores,” said Ortelli. “Even a brand that has a strong image cannot sit and wait and let that image fade,” he continued, adding that Chanel uses these events to stay relevant and highlight the quality of its products. “The idea is to reinvigorate the image that is already in the mind of the consumer.”

It’s hard to gauge the impact on actual sales. “Many of the items in a runway show are not the items that the normal customer buys,” said Ortelli. Yet some of Chanel’s consumers do actually shop pieces from the runway show and productions like the Métiers D’Art show can be a powerful generator of brand desire.

“I feel like the concept is more important now — and as a modern consumer, you feel like it takes precedence,” said a Chanel couture client who asked to remain anonymous. “You want the concept and the idea before you want the piece of clothing. I like to have that connection, that live experience.”

Ortelli added that the choice of Paris for the Métiers D’Art show was not just about the house’s historical connection to the city, its home-base, but also a reaction to a broader sales dip caused by decreased tourism to the French capital after a string of terrorist attacks and other security concerns. Indeed, Chanel has previously used its show locations to strengthen relationships with key markets, such as Dallas and Dubai, in recent years.

Tapping talent from the fashion world, including Sophia Neophitou-Apostolou and Nicola Formichetti, Victoria's Secret also uses its annual fashion show to maintain its image. "Between all of the diamonds and the most expensive bra, it really supports that brand message that this is a luxury, cutting-edge design company," said Bridget Weishaar, Senior Equity Analyst at Morningstar.

Yet the sales impact of the Victoria's Secret Fashion Show is more clear and immediate. Ed Razek, chief marketing officer of creative services of Limited Brands (the parent company of Victoria's Secret), told BoF in 2011: "You see sales results almost immediately. On the night of the show you see substantial increases in our web business from all of the news coverage. The day after the fashion show runs [on television], you see substantial increases in our web business." Last year, Victoria's Secret Direct, the brand's online and catalogue businesses, saw sales grow 15 percent to $567.1 million during the fourth quarter, which includes the holiday season and Fashion Show.

Between all of the diamonds and the most expensive bra, it really supports that brand message that this is a luxury, cutting-edge design company.

While the more elaborate looks seen in the Victoria’s Secret Fashion Show are not directly for sale, versions of many of the core lingerie pieces seen on the runway are immediately available in stores and online, where consumers can “shop the runway” through an interactive platform, as well as pick up the show’s official fragrance and the signature hot pink silk robes worn by the models backstage.

2016 has proved to be a challenging year for L Brands: profitability has lagged even though comparable sales remained positive due to smaller operating margins and decreased mall traffic. In May, Victoria’s Secret discontinued non-athletic apparel, swimwear and perhaps, most significantly, its famous catalogue. It also reorganised the business into three categories — lingerie, Pink and beauty — and stopped offering broad-based promotions.

Yet according to Variety, 6.65 million people tuned in to watch the CBS telecast on Monday night. “There is a degree to which these shows will always drive sales in a roundabout way,” said Neil Saunders, managing director at Conlumino.

The Victoria’s Secret Fashion Show also helps the American brand communicate on a global stage. The 2014 London show, for instance, helped Victoria’s Secret strengthen its retail presence in the UK. And though the brand still has no retail presence in France (save for one store, a joint venture in Orly Airport) its alignment with Paris, the global home of luxury and lingerie, translates across the world.

In May, Victoria's Secret acquired a network of 26 franchise stores in China as part of a long-term strategy to deeply expand into the country. Not coincidentally, this year's Victoria's Secret Fashion Show featured more Asian models that ever before, including Liu Wen, Xi Mengyao, Sui He and Ju Xiaowen.

With plans to open flagship stores in Shanghai and Beijing in the near future, might Victoria’s Secret head to China for its next fashion show? It could result in the kind of expensive, exciting and far-flung show Chanel has already staged many times over — proving that while the Victoria’s Secret Fashion Show might deliver a more impactful fashion spectacle, Chanel still wrote the playbook.

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