Levi’s reaps benefits from digital transformation

Levi Strauss CEO Chip Bergh has revealed that the iconic fashion brand has started reaping benefits from its digital transformation.
levi strauss digital transformation
Levi’s first quarter revenue rose 7 percent to $1.4 billion and gross profit increased by $45 million to $783 million.

By region, five points of revenue growth came from the Americas, three points from Europe, and three from Asia. By channel, five points came from wholesale growth, four points from our company-operated stores, and two from e-commerce.

Levi’s has achieved several important milestones as part of its digital transformation journey to improve customer experience.

Chris Clark, the chief information officer (CIO) of Levi Strauss, is driving the global fashion retailer’s digital mission. Chris Clark joined Levi’s in January 2015 and brings over 25 years of experience leveraging technology investments to fuel profitable growth, and drive cost productivity.

Levi’s IT partner Cognizant has earlier announced that it started the fashion retail brand to shift the organization toward operating in real time. Levi’s started focusing on IT team’s relationship and credibility with business leaders by creating an IT structure that matches the business structure.

In fact, Levi Strauss named Katia Walsh, a Vodafone executive, as chief strategy and artificial intelligence officer, effective April 29.

Katia Walsh will build out the company’s data, analytics and AI capabilities that will grow the business and fuel new business models.

A Forrester report said Levi Strauss used innovation to create new market leadership. Levi’s Commuter X Jacquard by Google is a clever example of a digital-business value innovation that gives an enterprise a new market leadership position.

A Forrester survey on retailers in March 2019 said global retailers plan to open new stores in 2019, but ecommerce sites are becoming more expensive to operate.

Inventory accuracy and planning systems that forecast demand are still challenges for retailers, but retailers are investing in order management systems to support inventory accuracy and order routing this year.

Retailers still face hurdles with respect to personalization: limited data, infrequent visits even from their best customers, and product catalogs that are too small to drive incrementality or any lift in conversion.

The fastest-growing channel among retailers is social marketing. Most retailers prefer Facebook including Instagram.

Key strategy of Levi’s 

The strategy of Levi’s is to become a world-class omni-channel retailer. Direct-to-consumer, including the brick-and-mortar stores and e-commerce sites, grew 14 percent, and has grown double-digits for 12 consecutive quarters.

Revenue growth from brick-and-mortar stores was 11 percent, while e-commerce grew 24 percent.

Levi’s is expanding its omni-channel execution. Levi’s has rolled out RFID throughout the U.S. and U.K. and will begin to roll out shop online, pick-up-in-store later in 2019.

Levi’s China revenues grew 5 percent helped by growth in company-operated e-commerce in mainline stores.

Direct-to-consumer growth was driven by the expansion and the performance of company-operated retail network and higher e-commerce revenue. Direct-to-consumer growth in the U.S. was up 9 percent. Mexico and Canada performed well, driven by growth in all channels including retail and online.

Rajani Baburajan