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How Levi Strauss Reinvented their company after a Billion Dollar Mistake

[ 2 ] October 13, 2010 |

Levi’s is killing it. Take a look at all the online retailers and how they’re finding their way through the emerging practice of social commerce. A few lighthouse examples stand out: Lululemon, Zappos, Dell, Best Buy – some great work out there.

I find Levi’s interesting, though – here’s why.

Rewind 15 years. Depending on how old you are now and what social circles you hung out in, you may have found yourself listening to a new genre of music: hip hop. With new stars on the scene like MC Hammer, Dr. Dre, and Wu-Tang Clan, we saw hip hop seed its way into mainstream culture – even influencing other genres with the rise of bands like Beastie Boys. By the early or mid 2000′s, we saw hip hop as a core part of popular music. But it wasn’t always that way.

Prior to its rise in popularity, hip hop remained a growing but underground movement Рwith cultural changes far beyond just the recorded albums. New language and vocabulary were born. And most interesting to this story, new styles of clothing. Yes, hip hop ushered in an era of loose jeans and baggy clothing.

A prime opportunity for Levi’s you might think, but if we look back to how Levi’s, the staple blue jeans company in Western culture, performed through the 90′s – we see an interesting little blip. Here’s an excerpt from the 1999 article in the New York Times, “Levi’s Blues”:

For 1996, Levi Strauss reported record one-year sales of $7.1 billion and a profit of more than $1 billion. By the end of 1998, the annual sales figure had shrunk to $6 billion, a 15 percent decline that can be attributed in large measure to the flight of young customers. In part, Levi’s was caught flat-footed as generational and demographic forces dramatically reconfigured the fashion marketplace and the retail environment. These overarching trends had a very specific iteration. As Sean Dee, the new brand director for Levi’s jeans, memorably puts it: ”Loose jeans is not a fad; it’s a paradigm shift.

Why did it happen? Simply put – Levi’s was not connected to the marketplace. They watched from the boardroom and made decisions about how “imaginative” and “fresh” their new marketing campaigns could be – completely missing the boat on what was really taking root in the homes, classrooms, and hangouts of American teenagers in the 90′s. Instead, they forged ahead with stonewashed 5-pocket jeans, and new lines like raincoats. As our friend Grant McCracken so perfectly says in the opening line to his book Chief Culture Officer , “Levi Strauss misses hip-hop. The penalty: $1 billion.”

Fast forward to today and aside from the well-known logo and vintage branding, and you might not recognize what is now a socially connected and in-tune company. When Facebook announced their latest round of new in-site features, Levi’s was right there – making their online shopping experience that much better for those visiting their site. The site could be customized so that only jeans recommended by friends made an appearance on the homepage. Jeans you liked could be easily shared and commented on with your network on Facebook.

From the ‘Levi’s Guy’ and ‘Levi’s Girl’, to their impromptu in-person concerts driven by social media, Levi’s appears to be much more prepared to react (or be proactive about) sweeping changes in customer trends and tastes. Depending on what’s happening behind the scenes at Levi’s, there are huge opportunities in monitoring all this data to anticipate future customer needs, products likely to perform well, and increase engagement with the right customers and influencers.

Kudos to Levi’s! Will it save them from losing out on the next multi-billion dollar trend? And could social tools like the ones mentioned in this post have saved them in the 1990′s? I’m curious to hear your thoughts. Drop a comment below and let me know.

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Category: Retail/CPG

About Mike Dover: View author profile.

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  1. [...] This post was mentioned on Twitter by denisbhancock, Wikibrands. Wikibrands said: How Levi Strauss Reinvented their company after a Billion Dollar Mistake, new post on @Wikibrands http://bit.ly/c5CKKC [...]

  2. me says:

    makes me want to drink alchoholic beverages

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