By Chloe Aiello

As the women's lingerie market heats up, ThirdLove co-CEO Heidi Zak says the intimate company's competitive edge is its direct-to-consumer model.

"One of the reasons why it's so hard for physical, brick-and-mortar retailers to carry more sizes is because it's so SKU-intensive," Zak said, referring to a "stock keeping unit," or inventory metrics. "We're digital, we can stock as many sizes as we want, and because of our data science algorithm we can accurately predict inventory."

The direct-to-consumer lingerie company already offers 78 different bra sizes, but with its latest $55 million funding round, it plans to offer even more sizes, styles, products, and better fit technology. The round was led by L. Catterton and investment bank Allen & Company, with participation from prominent investors, like 23andMe's Anne Wojcicki, YouTube CEO Susan Wojcicki, and broadcast journalist Katie Couric.

Zak said it's a good time to be in lingerie because there's "one dominant player that sort of controls the industry and there is a lot of opportunity to do something different."

That player, of course, is Victoria's Secret, which has struggled to stay relevant for consumers who increasingly value inclusion and authenticity. Target ($TGT) just announced its own answer to Victoria's Secret's troubles: three new lines of intimates, sleepwear, and lingerie, plus plans for an in-store fitting studio.

But ThirdLove doesn't feel threatened by Target since its online model is vastly different ー and it's vying for a different kind of customer altogether.

"Target's more focused on that brick-and-mortar store base, so directly competing with Victoria's Secret, it's also a lower price point. ThirdLove is a slightly more premium product," Zak said, although she praised Target's wide array of more inclusive sizing.

Zak said that ultimately the future of retail is "a blend of physical retail with digital."

And she didn't close the door to ThirdLove joining the trend of online-only retailers moving into brick-and-mortar spaces. When asked if the company would follow suit, she teased, "not right now."

For full interview click here.