We speak with Levi Strauss & Co’s chief digital officer Jason Gowans about getting the fundamentals of e-commerce right, the latest technologies he is most excited to tap into, and what Gen Z really wants. Inside Retail: You joined Levi Strauss & Co earlier this year and are overseeing the company’s push into digital. Can you share some of the areas that you’ve been focusing on? Jason Gowans: I came in 10 months ago, and I’ve spent that time getting to know the team, learni
learning the business. What has struck me is that you’ve got this amazing 170-year-old company with a globally loved and recognized brand, you’ve got a very meaningful wholesale business, and you have a very substantial and growing DTC business. For me, that’s a great platform upon which to continue to grow the DTC business. On e-commerce specifically, there are three big things that emerged from the deep dive I did with the team. The first is the need to focus on the fundamentals of running a great e-commerce business, both for consumers and for the company. You need to be excellent at all the basics in helping consumers throughout their journey: being in stock, having a fast site experience, making sure that the images on the product detail pages are compelling, making sure you can inform the customer around how things are going to fit. That’s opportunity number one, and – probably very similar to most other retailers – you just have to be excellent every day on funnel. Opportunity two is what we would describe as evolving the assortment, and that speaks to a few different things. One is the opportunity to expand our choice count. If you go back to the investor day presentation from 2021, [outgoing Levi Strauss & Co CEO] Chip [Bergh] talked about the need to diversify our categories, and we can see a real opportunity to do that in e-commerce as well. Along with that comes an opportunity to be really thoughtful around how you differentiate those choices for consumers. If you take a trucker jacket, for example, we have a number of different choices at different price points, and it’s really important that you can help consumers navigate those choices. We’ve seen through our consumer research that many consumers – men in particular – are amenable to trading up if they understand the functional benefits of doing so. In our case, if you think about the fibre, the fit, the fabric, the finish – these are all ways in which a consumer might think about one choice over another. So that’s an opportunity for us as we evolve the assortment. And the last big pillar is creating a digital flagship experience. What we’re talking about here is the confluence of three things: loyalty, omnichannel and mobile. When it comes to loyalty, we already have 20 million consumers in our loyalty program, but we think we’ve got an opportunity to make it even more compelling for those who are in it and those who might be in it in the future. Consumers have told us they love the convenience benefits associated with loyalty, like free shipping, but they also care about the experiential benefits – customization, for example. So we think we’ve got an opportunity to drive more value into that loyalty program in ways that consumers have told us they care about. On mobile, the overwhelming majority of our online traffic is mobile, yet comparatively, a much smaller share are using our mobile app. This is important for two reasons. One is it’s a better experience in the mobile app, but when you think about the aspiration to be the best omnichannel retailer in the world, the app also is the remote control for that experience. When you walk in the store, it would be helpful to understand if the store has your size in stock, if your order is ready for pickup, or employees could use location services within the app to see that the consumer is on their way to pick up their product or make a return. Those are the three big prongs of how we think about creating a digital flagship experience. IR: When it comes to the technology side of things, there can be a lot of roadblocks around linking legacy systems to more modern technologies. What are some of the biggest challenges you’re facing as you look to drive change in these areas? JG: I would say in some of our emerging markets, we aren’t so encumbered by legacy technology, so we’ve got a chance to move faster there. We’re actually replatforming the core e-commerce engines in a couple of emerging markets, which is going to help those markets continue to grow. Elsewhere, we’re trying to find the right balance between moving quickly and upgrading what you might characterize as legacy technology. One of the things that we’re trying to do is decouple the consumer-facing frontend experience from a lot of the backend systems. One example would be the work that the team has done to expose a lot of our backend capabilities as a service; for example, inventory as a service. In that case, it’s a legacy system, where inventory lives, but if you can expose that as an API, you have flexibility on how you might want to think about your frontend. This idea of decoupling the frontend from the backend, so that you can move quickly on the frontend, is an ongoing project. IR: What are you most excited to do on the frontend once you’re able to decouple it from the backend? JG: A lot of the things that animate me on the frontend are things that consumers are telling us that they care about. So, for example, in our CSAT [customer satisfaction] surveys, aside from things to do with size and fit, consumers have told us we have an opportunity with ease of navigation. We just rolled out a new navigation menu on levi.com. and we AB-tested two different variants against the original solution. Both variants were better than the version that we had, and one in particular was strongly positive. We’ve rolled that out to 100 per cent of traffic, and it’s something that has shown up in the CSAT feedback. When you can decouple the frontend from the backend, you can start to iterate through some of these consumer-facing opportunities much more quickly – navigation is just one such example. We’ve done that in the app as well, and we’ve seen big improvements there. Another recent win was some work we did to speed up the website, and in fact, the site has become 35 per cent faster than it was six months ago. We’ve still got a ways to go, but it’s definitely moving in the right direction. IR: Some of the buzzwords in retail tech right now are AI, augmented reality, and the metaverse. There’s a lot more hype around these technologies than some of the things that you’ve been talking about. Is Levi’s interested in leveraging these technologies as well? JG: AI powers a large part of the company already, and it did so even before I got here. If you think about a lot of the backend processes that are critical to running the company – how we do demand forecasting, how we allocate product, how we decide price optimization – AI is at the heart of many of those business processes, so it’s not a new topic for the company. I think some of the generative AI applications might be new, and that’s a space we are keeping an eye on. There are lots of different possible applications, not least of which is employee productivity. If you think about so-called ‘co-pilots’ for engineers when writing code, AI is now a viable companion that can offer suggestions on how to write code more efficiently, and we think that’s a great application in the area of employee productivity. On the consumer-facing side, there are lots of different possibilities, such as helping the folks who set up product descriptions. The way we think about it is less so about replacing a human [employee] and much more offering a starting point that the human can then choose to edit beyond. IR: Can you tell me more about how you see digital working hand in hand with Levi’s physical retail presence? JG: One obvious way is thinking of stores as a node in your fulfilment network. Today, on levi.com, when you buy something, there is a possibility that the order is actually filled from one of our stores. That’s a case where we use AI to determine what’s the optimal routing location for the order, depending on a whole bunch of real-time information. Certainly buy online pick up in-store (BOPIS), return to store – those are all journeys that consumers enjoy and want to do more. A more subtle application would be using the stores as a fulfilment node where they’re shipping to your doorstep and you’re indifferent as to whether it came from a fulfilment center or from a store. The goal for us is to get the product to the customer as fast as we can, and give a great consumer experience. IR: A lot of retailers are trying to understand Gen Z and what they’re looking for, but it can be really hard to know. You read one study and it says Gen Z doesn’t go into stores, they shop online, and another one says they only shop on TikTok. And yet another study says they actually do go into stores. What is your sense of what Gen Z is looking for when it comes to a brand’s digital presence? JG: The number one thing they care about is the product. In our consumer surveys, the number one piece of feedback is always to do with the product. And it’s not any different when you talk about Gen Z. Do you have the products that they care about? Do you have it in the size that they’re interested in? Beyond that, Gen Z consumers are not really much different from any other consumer in the sense that they care about connection and they care about convenience. On the convenience side, we’ve talked about omnichannel journeys – BOPIS, click-and-collect, return to store – Gen Z consumers care about those journeys just as much as other consumers. On the connection side, that’s where Levi’s has an opportunity to lean in. The stories that we tell, the people we bring to life on levi.com. For example, when you go into our stores, we have a Tailor Shop experience. These tailors are experts in, obviously, tailoring, but in many cases, they’re also extremely creative, and the designs they can create, the one-off customized products they can create, those are things that resonate with Gen Z consumers. And there’s more that we can do to bring that to life online. The journalist travelled to Levi’s corporate headquarters as a guest of the company.