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LAS VEGAS — Levi’s is in the midst of multiple strategy shifts, including a pivot to be DTC-first and an effort to grow beyond denim and become a full lifestyle brand. But the most imminent problem to tackle may be the consumer, who’s become increasingly wary in an uncertain political environment.
Addressing questions about consumer sentiment and discretionary spending, Levi’s CEO Michelle Gass on Wednesday noted that the denim brand already has an “approachable price point” but acknowledged that shoppers may nevertheless be more cautious in their purchase behavior in the near term.
“Are the consumers going to be more choiceful? Yes, but I think in times like this, where there’s more pressure and more uncertainty, consumers also go to brands that they trust and that they love, and we’re definitely one of those,” Gass said at a Shoptalk Spring panel. “But it’s up to us. If the wallet’s tighter, then we have to work harder. We have to work harder in driving brand relevance. We’ve got to make sure that every single time they’re coming into one of our stores, it’s a phenomenal experience. And we’ve got to keep innovating and bringing them newness and things that they can’t resist buying. That’s our job.”
She said the executives at Levi’s are watching consumer confidence numbers closely — a recent report from the Conference Board found consumer expectations for the future hit a 12-year low in March — and making efforts to keep its relationship with shoppers strong. Gass said quality and durability are both factors in Levi’s favor, with shoppers perhaps more willing to pay for a product they think will last.
“There are jeans that cost a lot more, there are jeans that cost less,” Gass said. “But it is an approachable price point to start.”
In the meantime, Levi’s is focused on the opportunities it can control, according to Gass, including its efforts to stay top-of-mind in the cultural conversation. The denim brand got a huge lift from that last year when Beyoncé unexpectedly named a song on her newest album after Levi’s, a moment Gass called “any brand person’s dream.”
After hearing a “whisper” from the music star that Levi’s would be name-checked in her latest album, the brand went to work on possible ways to capitalize on that with a broader partnership. The result was a Beyoncé-led campaign reimagining a series of Levi’s ads, the second of which went live last month. There’s a few more in the works, according to Gass, who noted that this isn’t the first time the brand has collaborated with the celebrity.
“The company’s had a relationship with Beyoncé for decades — goes back to the ‘90s, when she was part of Destiny’s Child,” Gass said. “As the story goes, they were looking for brands to partner with them and they got lots of no’s. Levi’s said yes.”
Beyoncé is also a convenient partner to have on staff when you’re a brand trying to grow its women’s business. Though Levi’s is traditionally a men’s brand, Gass said a little more than 30% of its shoppers are women now, and said that number really “should be half.” Asked why it isn’t, Gass acknowledged that the denim brand hasn’t always prioritized women’s categories.
“My first year before becoming CEO, I traveled the world with the team. I spent lots of time in stores, examined the categories. This is probably a simple example, but going into one of our stores, we had lots of denim bottoms for women — we had very few skirts, very few dresses,” Gass said. “We should have an iconic denim skirt, just like we have an iconic 501. And those weren’t key categories for us. So we start with: We should own everything denim dressing.”
After that, there’s also opportunities for Levi’s to offer a variety of tops that match the jeans styles of the day. Gass noted that the brand listens closely to its store managers, who often tell them what’s missing from the assortment or what’s performing well.“You need a different top to go with a low-rise jean than you do with a ribcage wide-leg. And we should be the experts in driving that,” Gass said.
Levi’s has embraced the baggy jeans trend in the industry right now, but it also needs to be ready for wherever the future takes things.
“There are many examples over time of brands who have not stayed relevant, who have not stayed fresh,” Gass said. “There’s also examples who lose their way, right? There’s a lot of nuancing — of really getting it right.”