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Tuesday, 18 January, 2022

Levi’s case study: Transforming retail with AI

Levi’s has always been a company of innovation. Being over 168 years old, it has weathered a few storms over the decades. However, it has made a clever move by adopting AI as part of its digital strategy, transforming itself into a leader in its field.

The problem
Retail is going through huge changes as shops close and jobs are lost. This has been exacerbated by the pandemic, speeding up high street casualties. Levi’s was no exception, recording heavy losses in recent times. It needed to address this issues in this fast changing landscape.

The solution
Despite bricks and mortar shops being hardest hit, online retail is up by 35%+. In fact, it is said that online clothing is at an all-time high. Levi’s has smartly spotted this and changed its business model. Levi’s had decided to opt for a complete digital transformation, omni-channel company putting AI at its core. Chip Berg (President and CEO) has put emphasis on structural change to drive stronger EBIT growth in a more dynamic world. He has also hired Dr Katia Walsh – Chief strategy and AI officer, veteran in digitisation and AI to implement plans going forward. As part of her appointment, there has been a number of AI initiatives within the overall roadmap to digitisation.
They have looked at several key areas:

  • Data – Powerful use of data, analytics and machine learning in all aspects of the business for a data driven approach.
  • Demand – Using machine learning for demand forecasting, prioritising fulfilment and reducing lead times. They have developed a repository of data (transcription, browsing history, behaviour, weather, climate, economic outlook, social media and fashion trends) to anticipate demand and give the best advice.
  • Customer experience – Using machine learning for a personalised shopping experience based on what you have bought and viewed before. It is also using a visual search feature to help customers quickly find what they are looking for as well as a recommendation engine to optimise customer experience (CX)
  • Commerce – They are looking at automating all repetitive tasks to speed up delivery and reduce issues.
  • Product design – Levi uses a AI-powered design algorithm to help create new styles of denim.

The results
It is a bit early to get solid results, however already they have seen ecommerce grow by 79% and profits four times what was taken the previous year. This is a huge result. Key to this bounce back, is addressing and incorporating AI as part of its core business. By implementing AI in a big way throughout an organisation, it can yield better results. Apart from this, Dr Walsh is also addressing responsible AI to help the business be more sustainable with reduced waste.

The future
With these impressive figures. There is no question that having a solid AI, data driven strategy is helping make a difference. As the industry moves towards sustainable fashion, the technology will allow them to look at on-demand personalisation. By implementing iterative ML/AI learning , the company should have a deeper understanding of their customers needs and desires. This will then help to develop new products/services or leverage the data with wider partners, thus driving revenues further upward. Future is very good and look forward to seeing how their technology develops.

About case studies
One of the hardest things in business is to imagine what is possible with new technology. The case studies are designed to give a digest on projects around the world using the latest technology along with my insights. It is also a way of showcasing the companies and their products, services and innovation. Please note that we have no connection with companies named unless stated.

About Mike Nash
I also work with companies and clients around the world offering the latest AI advice. After many years creating and running successful businesses, I bring a wealth of commercially minded experience to help achieve the best with AI possible.

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