Levi's loose jean pivot helped by real-time data

Levi Strauss & Co. guessed wrong on the popularity of loose fit jeans in the US and saw sales drop off in its direct-to-consumer business. In addition, Levi's marketing and back-to-school campaign failed to drive traffic.

Those challenges dinged the third quarter results, but there is a bright side. Levi's was able to see the demand fall off and steer its inventory toward low-rise fits because of its investment in new systems and data infrastructure.

"We moved quickly to address these U.S. traffic challenges and have a clear plan to improve performance. We are increasing investment behind areas of strong consumer demand, particularly low-rise fits and strengthening inventory positions accordingly. We are deepening our marketing investments, creating a stronger cadence of traffic-driving moments and placing greater emphasis on mid-funnel product marketing," said Levi Strauss & Co. CEO Michelle Gass.

The company reported third quarter net income of $169 million, 43 cents a share, on revenue of $1.6 billion, up 4% from a year ago. Direct-to-consumer sales were up 2% globally and down 1% in the US.

Levi's remains a work in progress, but its data investments helped it pivot in the third quarter. It's one thing to make a mistake, but real-time data enables you to cut your losses quickly.

The company bet on Google Cloud's unified data platform for sales, marketing performance, supply chain metrics and consumer insights. The visibility enables Levi's to see if marketing translates to sales.

For merchandising and inventory analysis, Levi's counts on Google Looker and Gemini for conversational analytics so queries can query store sell-out and inventory by product category.

On the back-end, Levi's is deploying SAP S/4 Fashion to support e-commerce and retail and has standardized its processes. Regional rollouts are underway and expected to be completed by mid-2027. Job listings also highlight Manhattan Associates as a key supply chain vendor. In a May update, Levi’s said it has retired more than 90 legacy systems and standardized 80% of its processes globally.

Going forward, Gass said Levi's has launched its AI shopping assistant, which has consumers adding to their bags at 3x the average rate.

"These efforts are part of our broader journey to build an entirely new digital flagship experience, including a complete redesign and platform migration of Levi.com," said Gass. "We are making great progress, and both efforts remain on track for a global launch next year. Once complete, levi.com will offer personalized experiences, dynamic outfit recommendations, immersive fit navigation and other unique capabilities that will convert more consumers into head-to-toe lifestyle shoppers."