Amazon's $10 bras are a shot at Walmart and Target — not Victoria's Secret
Amazon's rumored plan to start selling its own $10 bras was seen as a play against Victoria's Secret, one of the leading companies in the market, which typically sells bras for around $40.
But according to a note published by Morgan Stanley, Amazon's pricing strategy suggests it's actually going after big box retailers, like Walmart and Target — not Victoria's Secret — with its budget bras.
The note points out Walmart and Target already sell low-price intimate apparel, and yet, Victoria's Secret continues to own roughly 27% of the market. That means the people who shop at Victoria's Secret are unlikely to be swayed by low prices, and find value in other things, like service and product quality. Instead, Amazon's strategy looks almost the same as what Walmart or Target are doing.
"Given Walmart and Target's similar price points to Amazon's supposed $10 offering (Walmart $8-15, Target $10-20, vs. Victoria's Secret's ~$35) as well as a similar ‘no to little service’ model, we suspect these retailers are likely to be more negatively impacted than Victoria's Secret should Amazon persuade consumers to start buying intimates on its site," the note said.
Given big box retailers account for roughly 50% of the US intimate apparel market, Amazon is certainly tapping into a huge market. But at the same time, Morgan Stanley notes, intimate apparel products have to meet stringent fit requirements, high quality standards, and multiple style needs (bras typically come in 5+ cup sizes, 4+ band sizes, and 5-10 difference colors), making it a tough category to win.
Intimates is also the second least popular apparel category on Amazon, according to Morgan Stanley's survey, which suggests that it's an uphill battle to sell bras online: