Levi Strauss & Company has a long and inspiring history. Founded in 1853 in San Francisco in the wake of the California Gold Rush by German immigrant Levi Strauss, Levi’s has played a leading cultural role in the evolution of the United States. From its origins as the American workingman’s apparel of gold miners, cowboys, railroad workers, and lumberjacks through its transformation into the symbol of the 1960’s counterculture and subsequent blue jeans craze, Levi’s has been a vital part of American clothing, fashion, and culture for nearly 170 years.
How is it then that a legacy 170-year-old business has transformed itself into a 21st century global digital, data, and AI leader? Perhaps, it’s because innovation is rooted within the company’s DNA. From its early and continued innovations in clothing design and versatility, Levi’s has also been at the forefront of change, including social change and support for progressive causes, which today range from active support for sustainability and LGBTQ rights to public opposition to gun violence under the leadership of CEO Chip Bergh.
Levi’s business culture embraces innovation and change, which is a good trait when you are required to adapt to changing fashions over many decades. It should therefore not come as a great surprise that Levi’s would emerge as one of the most innovative and advanced companies when it comes to embracing digital transformation — doing so in the context of serving its customers and meeting the needs of these customers in an ever-changing world. In response to a changing world — which includes the emergence of data, AI, and digital experience — Levi’s has forged a vision centered on digital transformation as a strategy to accelerate direct to consumer engagement and ensure lifelong customer loyalty. Today, Levi’s is a $6B business, aiming to deliver the “Levi’s experience” through the power of digitalization, data, and AI, to customers across 110 countries.
Levi’s digital transformation began in 2018 as an integrated vision for the future, with the goal of breaking down traditional business barriers and product silos. The company embarked on this effort to integrate innovation capabilities in digital transformation, data and analytics, and AI and machine learning within a single, unified leadership function. This commitment to led to the establishment in 2019 of the Chief Global Strategy and AI Officer role, under the leadership of industry veteran Katia Walsh. Ms. Walsh brought a deep and extensive background in data and analytics expertise from her previous data and analytics leadership roles at Vodafone, Prudential Financial, and Fidelity Investments. Reporting to Levi’s CEO Chip Bergh, Ms. Walsh’s current mandate includes:
- Charting the course for Levi’s global digital, data, and AI strategy through the integration of Levi’s digital, data, analytics, machine learning, Artificial Intelligence, innovation, transformation, strategy, and growth initiatives.
- Integrating digital, data, and AI competencies into the P&L of Levi’s to directly support key business priorities and business outcomes that deliver business value.
- Enabling strategic business goals, continuous differentiation, and industry leadership in product innovation, customer experience, sustainability, and digital assets.
- Driving innovation incubation, new business models, and global growth initiatives that drive business outcomes, customer centricity, and continued brand strength.
In her leadership role at Levi’s, Katia Walsh is a passionate advocate and voice for innovation, delivering business results, and offering great customer experience. She lives and breathes her mantra — “think big, start small, and scale fast” — to win business support for her data-driven agenda. In a recent interview, she summarized her business philosophy for driving successful innovation: “There’s a model that I found tremendously helpful in my career… and that is think big, start small, and scale fast. We want to make sure we focus on both transformative capabilities that may take a little longer to materialize, and at the same time also quick wins so that we show that value and gain momentum. Once you gain momentum, you gain champions. And, once you gain champions, you gain a following.”
Levi’s combines the characteristics and qualities of being a creative company as well as a design company, which lends itself to experimentation and innovation. To execute on its vision, Levi’s is using digital, data, and analytics to deliver enhanced customer experience and business value, focusing on 3 key initiatives – (1) Smarter Commerce, (2) Smarter Creative, and (3) Smarter Connection with Customers. Combined with a mission of “making it personal” for the customer, Levi’s is heavily invested in learning from online experience to create personalized customer engagement. For example, using clickstream data to prioritize product recommendations, or the use of computer vision and AI to enable customers to identify a “look” through images that enables Levi’s to shape and create new products. With more than 5 million loyalty program members, Levi’s can offer a range of exclusive benefits ranging from repair, tailoring, to early access to concert tickets. In addition to operating direct to the consumer, Levi’s supports wholesale partners, including Amazon, Macy’s, and Nordstrom.
Levi’s is focused on ensuring that its investments in data and AI initiatives deliver business value. The company is committed to measuring everything, such as cost savings resulting from automation and the elimination of manual work. The company’s smarter commerce initiative of 2020 was used to determine optimal promotion and pricing to move inventory and factor in price elasticities. Starting small in one country, Germany, Levi’s quickly moved from one country to the next to achieve scale. Data was analyzed to determine how many units, at what price, and in what channel to optimize cost-efficiency. Today, Levi’s analyzes more data than ever to transform the product design process. Levi’s recently launched a Machine Learning Bootcamp, an 8-week initiative to train anyone from textile engineers to business analysts to apply data, AI, and machine learning to assist in their job functions.
Other companies can learn what it means to exemplify data-driven leadership from the example of Levi’s. The structure of the Chief Global Strategy and AI Officer role at Levi’s represents an industry blueprint for what the next-generation of the Chief Data Officer (CDO) role could transform into – an integrated leadership and innovation role with responsibility for delivering business value through digital transformation that is enhancing customer experience through investments in data and AI.
For Levi’s using data and AI is firmly woven into the fabric of the company — a suitable metaphor for a company that began as an outfitter of gold miners. Given its history, it can be expected that Levi’s will continue to innovate, with data, AI, and digitalization as the cornerstones. It’s much more than a passing fashion. Levi’s willingness to embrace innovation is an embodiment of the company’s tradition and legacy of serving its customers. The result is the transformation of a 170-year-old clothing business into a 21st Century digital, data, and AI leader. Levi’s is setting a standard for firms that aspire to become data-driven leaders in the years and decades ahead.