Levi's eyes new stores in East APAC, D2C a main growth priority

Levi's will be launching new stores and rolling out existing store refreshes as well as new in-store services throughout the East Asia Pacific (EAP) region. New stores are expected to launch this year in Singapore, Malaysia, Indonesia, Japan, Australia, and Thailand. This is part of the company's plans to accelerate sustainable business and commercial growth in the EAP region.

Its stores and shop-in-shops will be refurnished into NextGen Indigo stores, and this will be done using digital tools to streamline the consumer journey, including installing LED portal entry archways and LED screens for marketing content. Levi Strauss & Co. managing director and senior vice president of EAP, Nuholt Huisamen (pictured below), told MARKETING-INTERACTIVE that in Thailand alone, close to 100 new retail stores will be introduced in the new NextGen Indigo format, eight of which opened on 1 April. This marks the pivot towards a 100% owned-and-operated business model in the country, added Huisamen. 

Select stores in the region will also introduce in-store tailoring services to offer greater personalisation of apparel. According to Levi’s, as the retail market finds its new equilibrium, the company will focus on omnichannel engagement, leveraging the hybrid customer experience model. Some of the brand's marketing plans for 2022 include leveraging the brand experiences with initiatives such as 501 Day and the Levi’s Music Project. 501 Day is a global campaign that commemorates the iconic blue jean receiving its official patent. Similarly, the Levi’s® Music Project is a programme that connects with and supports artists and aims to leave a more global footprint.

Exciting consumer-facing events and activities in Bangkok will also be announced, Huisamen said, adding that more localised activities will be rolled out in key markets this year.

D2C focus played a role in financial success

Levi Strauss & Co., which owns Levi's, Dockers, and Beyond Yoga, reported an 11% increase in net revenue on a reported basis in Asia during the first quarter of the year. The increase was driven by both its D2C and wholesale channels and most markets, despite a few markets continuing to experience COVID-related impacts.

Direct to consumer (D2C) net revenues for the region increased 17% driven by strong performance in its company-operated stores, as well as eCommerce, which was up 22%. Wholesale net revenues increased 5% driven by strength of the Levi’s brand across several markets. Net revenues through all digital channels grew 17% and represented 14% of the segment's sales in the quarter.

Huisamen credits its success with placing consumer at the centre of everything it does and its focus on D2C. Huisamen cited the recent expansion into Thailand as an example of this. With Levi's global D2C eCommerce increasing by 22% in the past year, the company prioritised its Thai eCommerce site and created a dedicated CRM programme as well, to respond to the omnichannel behaviour of its younger, digitally savvy target audience. 

With young consumers becoming a priority audience, Huisamen said that it is important the brand continue to adopt a digital-first mindset to better serve and appeal to them – both from a marketing and consumer standpoint. Levi's has thus dialled up its social media presence locally with newly launched channels on platforms such as LINE, Facebook, Instagram and Twitter. On top of that, there are brand collaborations and collections with other brands such as The Simpsons, BEAMS, Human Made and Levi’s® Fresh. These have already been rolled out in the region, and reflect the brand's push to connect with younger audiences. 

Levi’s is also looking to redouble its digital transformation efforts, in efforts to lead the jeanswear industry. The company said in a press statement that it will leverage digital, data and AI to stay ahead of trends, drive efficiency and innovation in the product creation process, deliver omnichannel offerings, claim its space in the D2C sphere, and enhance the consumer experience. According to Levi's, AI will continue to play a key driver role when it comes to providing a predictive, proactive, and personalised experience for its audiences, particularly younger ones.

At the same time, it is also working with several different agencies in the region that specialise in PR, marketing, social media, and CRM. While Huisamen did not provide specific names for the agency partners, he said: "We see our agency partners as an extension of our teams, particularly in-market where our in-house teams are lean."

To align the brand better with its transformation and digitisation efforts, Levi's is also exploring opportunities within the digital economy. Recent examples of this include the Levi’s® collection on metaverse platform Zepeto, the Levi’s® x Bitmoji collection on Snapchat, and livestream shopping pilots on Twitch.

"These initiatives allow us to test, experiment and quickly integrate learnings to inform our holistic, digital strategies, in support of our company’s brand-led, direct-to-consumer and diversification priorities. It’s an exciting space that we’ll continue to explore where we see opportunities to enhance smarter creation, connection and commerce at Levi Strauss & Co," said Huisamen. The company was unable to share specific numbers when asked about the ROI for its digital transformation efforts.

On a wider ESG front, Levi’s has pegged its targets to measurable metrics and remains committed to responsible and sustainable practices, as outlined in its 2020 Sustainability Report. The company aims to achieve its 2025 Water and Climate Action Strategy targets, through initiatives such as Water<Less® finishing techniques, that have enabled billions of litres of water to be saved.

While many fashion brands today can come off across as greenwashing, Huisamen explained that delivering profits through principles is part of Levi's heritage. "We remain committed to creating a positive impact the countries we operate in. We take our responsibility seriously in leading positive change in the apparel industry, moving towards more sustainable and more circular products and practices," he added.

Other initiatives include reducing emissions across the company's supply chain; driving innovation in sustainable materials and designs through Wellthread™; and advocating ethical consumerism through the Levi's® Buy Better, Wear Longer campaign. Together these initiatives will help embody the company's move to develop and implement circular products and practices, reported Levi’s.

Levi’s ESG commitments come with other social initiatives, such as the Red Tab Foundation. As the-first-of-its-kind employee hardship fund, the company provided approximately US$2.4 million in financial support to more than 1,800 individuals in 2021. Primarily funded by employees, shareholders and retirees, this concept helped the Levi’s community with everyday hardships, natural disasters and the financial impacts of the COVID-19 pandemic.

The company also provided learning opportunities to existing staff to upskill themselves through training and development programs such as a Machine Learning Bootcamp, to equip employees with the tools they need to thrive in a changing and increasingly digitalised economy.

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