Direct-to-Consumer’s Lasting Impact on Fashion

Vogue Business

At Art Basel in December, Levi’s hosted a pop-up that offered customers a chance to customize products at every turn. Levi’s Haus Miami let shoppers personalize jeans, screen print T-shirts or have items tailored on the spot. Other attractions included artist workshops and an art gallery, all designed to draw people in and get them to linger.

A pop-up engineered for the Instagram crowd may feel like a trend that’s cresting. But Marc Rosen, Levi’s executive vice president and president for Levi Strauss Americas, calls it the future of retail. At the core of fashion’s shift from straightforward selling tactics to experiential retail is increased onus on brands’ direct sales.

“We’ve been on an intentional path to strengthen that direct relationship,” Rosen says. Since changing priorities when Chip Bergh took over as CEO in 2011, Levi’s has registered 16 consecutive quarters of double-digit growth in direct sales, which now account for nearly 40 percent of its $6.6 billion in revenue, up from 30 percent. For the fourth quarter, Levi’s reported Thursday that direct sales increased by 10 percent. “A closer relationship helps us understand what customers want from the brand and lets us give them unique offers.”

Levi’s is part of the fashion industry’s pivot to direct sales, which spans price points and categories and has been ramping up for years. Adidas aims to generate 60 percent of its sales from direct retail by the end of 2020. In an earnings call last August, Prada reported slashing its wholesale vendors by half for Spring/Summer 2020 so “products will mainly be available in [its] stores and only through official channels”. In 2018, Coach cut ties with more than 25 percent of the 1,000 stores carrying its products in North America.

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