Taking on Victoria's Secret

AVENEL, N.J. (FORTUNE Small Business Magazine) -- At 9 on an overcast morning, controlled chaos reigns at the headquarters of lingerie merchant Bare Necessities. An unusual team of consultants has just taken over the company's unadorned conference room in Avenel, N.J. One consultant is shoving desks into the center of the room. Others are unpacking gigantic Post-it Notes from boxes and plastering them on the walls.

With furious intensity, two young women are ripping photographs from fashion and lifestyle magazines such as Cosmopolitan and People. What are they looking for? "Anything provocative," one woman replies brusquely.

The company could use a little shaking up. Bare Necessities (barenecessities.com) sold about $15 million in brand-name women's lingerie last year, up from $13.3 million in 2004. The company is profitable, and its four brick-and-mortar boutiques in the Northeast are thriving.

Noah Wrubel, who took over the family business five years ago, sees the Internet as the future of Bare Necessities (80% of its sales are generated online), and he's not happy with his company's position on the underwear superhighway.

Bare Necessities trails market leader Victoria's Secret in both name recognition and online sales. (Victoria's Secret racked up $158 million online in 2004, according to Internet Retailer magazine.) The Bare Necessities site "lacks personality," complains Wrubel. "It has no voice." True, anyone who Googles "women's underwear" will find Bare Necessities high up on the first results page.

Once at the site, she (or even he) will find a crisp, efficient, easy-to-use menu that lists a vast array of bras, panties, nighties, and so forth by size and style. But the same site could just as easily sell paper clips or gardening supplies. "When the transaction is over, I think the customer barely remembers our name," says marketing director Dan Sakrowitz, 37. "If she wound up at a different e-tailer's site the next time, I don't think she'd notice or care."

It's not for lack of effort that Bare Necessities' website lacks a certain panache. Wrubel, 38, a friendly, wiry man with thinning dark hair, says he has assembled Bare's top brass several times and attempted to develop a more memorable online personality. The company even hired branding consultants. "Nothing really worked out," he admits.

Early this year, Bare moved its operations from Newark, N.J., to Avenel, a small town jammed with trucks and warehouses about 15 miles south on the Jersey Turnpike. As soon as they settled in, Wrubel vowed, Bare would sort out its image problems.

That's where FSB came in. We recruited a team of consultants from Frog Design (frogdesign.com), one of the world's most distinguished product-design and branding consultancies. Originally known for its sleek hardware designs (early credits include the first Trinitron TV for Sony (SNE) and one of the first Macintosh personal computers for Apple (AAPL, Fortune 500)), Frog has lately developed an innovative branding service called FrogTHINK. It's a sort of collective therapy exercise designed to help companies unleash their creative mojo.

At about 9:15 A.M., a thirtysomething Australian named Luke Williams stands up. He is wearing dungarees, an un-tucked white shirt, and a gray sports jacket. If the 15 people in the room had any preconceived notions about FrogTHINK, they are probably wrong, says Williams. "There are no beanbags, no water pistols, no 'trust falls,'" he explains. "Removing inhibitions is not enough to cause creativity. You can't dig a hole in a different place by digging a deeper hole." The underwear merchants absorb the spiel in attentive but baffled silence.

Williams splits the participants into two groups: insiders and outsiders. The insiders are the half-dozen Bare Necessities executives, including Wrubel, Sakrowitz, COO Bill Richardson, and five women executives who requested anonymity because of the intimate subject matter. Outsiders include a Bare Necessities employee on her first day on the job, a young woman freelancer who occasionally writes copy for the company, and two women recruited from Frog Design's office in New York City.

The purpose of all those "provocative" magazine images (everything from overflowing cans of paint to a camel race in the Sahara) now becomes clear. The insiders are instructed to stay in the room and use the photos to construct one collage that illustrates a customer's real experience of buying lingerie, and another collage of the ideal buying experience.

The outsiders leave the room with the same assignment. Wrubel and Richardson, sitting in a corner, smile as they tackle the chore. "I like looking at pictures," laughs Wrubel. Richardson, 39, a powerfully built man with shoulder-length hair tucked behind his ears, pauses. "The linear mindset in me wants to write a list of adjectives first and find pictures that match," he says.

In 20 minutes both groups post their collages on the wall. Williams asks everyone to explain which picture he chose and why. To Bare Necessities executive David Wauters, 33, a picture of a woman in a helmet suggests beleaguered shoppers, confused by the selection process.

A picture of several round lampshades reminds a dark-haired female marketing manager that real women, unlike models, come in all shapes and sizes. For a blond Bare Necessities employee in her early 20s, a shot of a woman with a halo makes the point that women don't always seek sex appeal when they buy underwear. "Sometimes we just want to be sweet," she explains. For his part, Wrubel posts a photo of open paint cans, "because shopping for lingerie should be colorful."

It soon becomes clear that buying lingerie is enormously frustrating for most women in the room, even those who work at Bare Necessities. Wrubel is astonished to hear that women often throw out a garment they just bought because it turns out to be uncomfortable or unflattering. The young freelancer complains that shopping for underwear is "boring." And a full-figured Bare Necessities executive says the experience can be downright painful. "I try on 100 things and nothing fits," she laments. "I feel shot down."

The first hints of a role - and a brand - for Bare Necessities begin to emerge. The website doesn't do enough to ease the pain of lingerie shopping, muses the freelancer. Couldn't Bare Necessities provide some sort of instant-messenger link on the site so that customers could ask questions or get information about what they're buying?

Williams, from Frog Design, seizing on the halo photograph, wants to know more about sexy vs. sweet. Wrubel admits that Bare Necessities has so far avoided projecting any image at all. "We use photos on the site to sell the product," he says. "It's functional by design, but we don't impact the mood." That sparks a discussion of some famous competitors' websites, which the Bare Necessities crew denounces as "raunchy," "cheap," and "over the line."

Williams asks both teams (insiders and outsiders) to come up with one-word descriptions for three lingerie websites that compete with Bare Necessities. After a few minutes, the outsiders suggest "extravagant," "sexy," "low quality," "curvaceous," "sloppy," "messy," "generic," "too much lace," "too many markdowns," "inexpensive," and "too innocent," among others. Although most of the terms are pejorative, the outsiders note approvingly that one site sets itself apart by offering underwear fashion tips.

In an effort to help Bare Necessities find a distinctive image for itself, Frog strategy director Stuart Hogue, 31, now asks the group to suggest words that mean the opposite of the terms they used to describe their competitors' websites. "It's sort of like the Mad Libs game," he says.

New words go up on the wall. If one rival pushes lingerie brands with a reputation for poor quality, the outsiders declare, Bare Necessities should emphasize its high-end brands such as Versace and La Perla.

Another rival features only drop-dead-gorgeous models? Bare Necessities should demonstrate that it caters to all body types. If a department store chain's website displays only mainstream generic products, then Bare should focus on trendy niche products such as the Scanty line of sleepwear or lingerie from Spoylt, a high-end British manufacturer.

If a third rival is "juvenile," Bare should stand for "sophisticated." "Too innocent," finally, begets "complexity of character and personality."

FROG'S Hogue announces that he has spotted a recurring theme: Everyone in the room seems to think that Bare Necessities should provide more guidance to shoppers. Citing Oprah Winfrey's TV book club, Hogue suggests that Bare Necessities position itself as a "sage" for lingerie shoppers.

The freelancer wonders aloud if Bare Necessities should create a wise fictional character to greet and guide visitors to the website. Wrubel riffs on this theme. Make that several characters, he says, representing a shopper in a sexy mood, a functional mood, shopping for a special occasion, etc. " 'Approachable expertise' kinda sums it up," declares Hogue.

At about 4:30, Hogue projects a giant PowerPoint slide on the wall. Created just a few minutes earlier, it resembles an archery target split in three sections by a giant letter "Y." At the center is the word "sage," meaning wise, knowing, of good taste. Floating nearby are the words "intimate," "sensual," and "expertise."

"'Sage' is your core essence," Hogue explains. "It differentiates you from competitors that don't advise or assist their customers." The word "intimate" suggests that Bare Necessities is comfortable with the wide variety of women's bodies. "Sensual" suggests that Bare Necessities can help women be more attractive.

Hogue and Williams then unleash a blizzard of marketing ideas based on the general notion of Bare Necessities as underwear sage. One is a tool that would help shoppers find the bra that matches their current mood (sexy, practical, athletic, etc.) Another is to push fashion and lifestyle tips out to customers, on such themes as how to hide your love handles. Frog marketing director Mick Malisic, 32, proposes hiring handsome men in limousines to deliver lingerie orders in person. (The audience greets this one with friendly but vigorous derision.)

Two weeks after the session, Wrubel reports that Bare Necessities has hired a graphic-design firm to change its website so that it emphasizes the themes of intimacy and expertise. Similarly, the company's newsletter now offers fashion advice as well as special deals. "Instead of just 'free slippers,' it's more 'the ten best bras to go with T-shirts' or 'eight solutions for your prom dress,'" he concludes.

FSB will stay in touch with Bare Necessities and report on the progress of its branding campaign.

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Related: More about Frog Design. How much do they charge for one-day's consulting?

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