The future of Levi’s is DTC-first and it’s already paying dividends in Asia

Legacy denim brand, Levi Strauss & Co has rolled out a direct-to-consumer first strategy across its East Pacific Asia market.

The pivot away from Levi’s historically successful wholesale model was first introduced with the arrival of new president and CEO Michelle Gass who has her sights set on taking the brand to new heights.

Levi’s consider itself a steward of denim and in particular the blue jean – now the iconic brand is taking control of growth by coming back to bricks-and-mortar.

Inside Retail sat down with Nuholt Huisamen, managing director of Levi Strauss & Co for East Asia Pacific, to unpack what the future of the DTC-first strategy means for the Asia market.

The next chapter of the 170-year-old fashion brand is set to be one that centres on the in-store consumer experience.

First things first, DTC

Levi’s has executed several “buybacks” in the East Asia Pacific marketplaces including in Singapore from Jay Gee in order to successfully implement its DTC-first strategy.

“In Singapore’s case, it’s been a bit of an evolution because we didn’t start a business from scratch – we took over a portfolio of stores that were not ideal by any stretch of the imagination,” said Huisamen.

Levi’s takeover of the Singapore market involved reducing brand dilution by closing a string of stores while expanding the size of several key locations and introducing its elevated next-gen fit-out.

A prime example of this was Levi’s decision to triple the size of its Iron Mall store, from 100 square metres to 300 square metres, which has gone on to become one of the most profitable bricks-and-mortar stores in its portfolio.

“We still want to elevate that market – we believe Singapore should be the pinnacle of the Southeast Asia shopping experience and I think we have a few things to learn,” said Huisamen.

The East Asia Pacific arm of Levi’s manages a very diverse portfolio of marketplaces, including Japan, Korea, Thailand, Singapore and Australia, and is responding well to Levi’s DTC playbook so far.

“We are a 75 per cent DTC business and if I think of the evolution over the next year, we’ll probably be closer to an 85 per cent DTC business,” stated Huisamen.

The growth projection comes from Levi’s plan to roll out over 100 new stores in the East Asia Pacific marketplace casting a wider net and creating bigger footprints for its stores.

“We find that actually bigger stores fail fast and become more productive than smaller stores,” shared Huisamen.

When size matters 

Levi’s is 100 per cent DTC in Thailand and recently reopened its 364 square-metre store in Bangkok’s CentralWorld Mall where the brand is testing a new merchandising fit-out that promotes discovery.

The new execution in CentralWorld brings all Levi’s jean styles together to provide consumers with the opportunity to find the right fit in the right wash.

“We find that the search starts online and the majority of the conversion happens in-store,” said Huisamen.

“Creating an environment where you don’t just come to pick up a pair of jeans, you come for an experience,” he added.

Levi’s next-gen stores, what the business refers to internally as its indigo format, have already been rolled out in Australian locations like Melbourne Central and Chadstone.

“When you look at the interior, it’s much different from what you’ve seen from Levi’s in the past, where we create a far elevated shopping experience,” said Huisamen.

“We have style lounges where consumers can feel more comfortable when they look at our product and we have a Tailor Shop experience which allows for customisation.”

Historically, in the Asian market, Levi’s would typically play in the safe 100 to 150-square-metre store size range but now it is applying its learnings from its Singapore location.

“That really opened up the rest of the floor, to really merchandise the store in key categories, which we want to educate the consumer on other things that are not rooted in denim bottoms, which is non-denim bottoms, tops, women’s dresses, etc,” said Huisamen.

Any apprehension that a jeans brand would be able to fill a space that large has dissipated as Levi’s continues to look beyond jeans and denim.

“We need to grow tops faster than bottoms and women’s faster than men’s,” concluded Huisamen.

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