If you’ve ever used a Swiffer on a dirty kitchen floor, or if you’re under the age of 80 and splashed some Old Spice on before a date, chances are Bergh had an influence on those decisions. The Swiffer was his idea, and the quirky ad campaign that made Old Spice relevant again came on his watch.
About four years ago, Bergh moved from the world of fast-moving consumer goods to take the helm of one of America’s most iconic brands: Levi Strauss.
Bergh saw amazing opportunity, but he also saw an apparel manufacturer that was performing below its potential. At a conference held by the American Apparel and Footwear Association in Washington, D.C. in March, Bergh noted that in the roaring ‘80s, Levi’s were used as currency in the Eastern Bloc. He even told a story of a time he was staying in a youth hostel in Europe in the early 80s. He had washed his Levi’s and left them to dry in the bathroom overnight, but had also accidentally left his wallet on a nearby windowsill. When he awoke the next morning, the wallet was where he had left it, but the jeans were gone.
It was Levi’s that other brands looked up to. Even Nike. Now, Nike’s revenue is nearly 10 times that of Levi’s.
The challenge has been to take a brand that could have been perceived as staid and make it matter to younger generations of customers. It’s not just a marketing issue (though that’s
Bergh’s background). It’s a production, demand, and multiple consumer channel issue. And that, in essence, makes it a supply chain issue.
Bergh spoke about how Levi’s began to struggle in the late 1990s and early 2000s because it was missing younger generations of consumers. With the average Levi’s buyer over the age of 40, the company had to not only appeal to younger consumers with products they wanted, but it had to engage with the entirely new way these younger consumers shopped.
The upside was that Levi’s had room to grow in a number of segments and geographies. It barely made a ripple in men’s clothing outside of “bottoms.” Its eponymous jeans and Dockers khakis were powerful names, but there was potential to get customers to buy other products, like shirts and outerwear.
The company had barely scratched the surface of its opportunity in the women’s market. And perhaps most compellingly, there was still latent demand for Levi’s in foreign lands, particularly Asia.
Here’s a view into how disconnected this can be: recent American Shipper research found that 64 percent of retailers believe transportation plays a critical role in their omni-channel strategies. But only 41 percent said their transportation procurement is closely tied to inventory management.
This is but a small window into the gap that exists between how companies view the requirements of omni-channel and what is actually being done to meet those requirements. Satisfying millennial customer expectations requires transportation strategy be inextricably linked to inventory
But it’s the nitty gritty of tying together the sourcing patterns, customs clearance requirements, duty reduction opportunities and freight transportation needs where Levi’s will be able to meet its lofty ambitions for the brand.
While at the AAFA event, I chatted with Gary Barraco, director of global product marketing at the global trade management software provider Amber Road, about the Levi’s story (the company is an Amber Road customer). He specifically mentioned a number of areas companies need to focus on given these complexities:
- Supply chain visibility, meaning inventory identification, tracking and management of products at the SKU level.
- Consumer demand and experience, whether online or in-store. “Going direct will require creating a compelling, personalized experience that is powerful enough to lure customers away from traditional retailers which carry similar products.”
- Global trade compliance. “Aspects such as merchandise labeling requirements, permissible materials, intellectual property, data protection, and other standards vary from country-to-country and e-commerce retailers must carefully abide by domestic and foreign trade laws or face getting export licenses or privileges revoked, hefty fines, or court action.”
- E-commerce shipping. “Some of the worst consumer experiences in cross-border e-commerce involve logistics. International e-commerce logistics is more expensive, complex, and time consuming than domestic logistics.”
Over its history, Levi’s has often let its brand and heritage do the talking, but Bergh and his team are surely mindful that in a hypercompetitive environment, the brand will only go as far supply chain technology will take it.