How Did Levi's Lose To UNIQLO And GAP?

The combination of Levi's brand and cheap supermarket image brings irreparable damage to brand image.

This may also partly explain why even the Asian emerging markets, which everyone is talking about, has not brought much hope for Levi's: when more and more fashionable young people see Levi's in supermarkets, they are disappointed.

Can young people fall in love with Levi's again?

The scale of Levi's is still there, but it has lost its appeal to young people.

Ye Yun, 33, has a passion for jeans since he was young.

He also clearly remembered that when he was sophomore in 2001, he bought the first Levi's jeans, not 501, but at that time.

The micro pants 517.

That year, Levi's opened its first store in Shanghai, with an average price of several hundred yuan more than that of Lee, which entered the Chinese market in 1995.

At that time, ye Yun felt that he had bought the best jeans in the world and was at the forefront of fashion.

But after graduation, ye Yun found some better European cowboy brands, such as G-STAR, Diesel and so on.

In recent years, with the accumulation of income and fashion knowledge, his interest has shifted to Japan's tide brand. Samurai, Pure Blue Japan and The Flat Head are now his favorite cowboy brands.

In May 2014, Levi's 501 Jeans ushered in its 141st birthday.

But this brand is no longer on most young people's shopping lists.

"It's a popular supermarket brand in foreign countries. If you need to buy a pair of cheap jeans, I would prefer to make UNIQLO and Gap, which are cheaper, and the styles are changing more and more fashionable."

Ye Yun said.

In the American market, young consumers are also staying away from the brand.

A survey by BrandIndex, a brand consultancy, found that consumers aged 18 to 34 had a declining desire to buy Levi's.

Consumers over the age of 50 have become their biggest buyers.

The aging of consumer groups is undoubtedly a dangerous signal for brands like Levi's.

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In the past 30 years, jeans have been completely rid of the logo of tooling and become fashion accessories like handbags.

From ZARA and other fast fashion brands to Helmut Lang, Acne and other designer brands, as well as GUCCI[micro-blog], Chlo and other luxury brands, jeans are everywhere.

In the new era of competitors from all sides, as Ye Yun felt, the Levi's that once defined the jeans culture has been further and further away from these new changes in jeans.

Today, Levi's is still a large company with a sales volume of more than 4 billion dollars.

But its position is far less than 30 years ago.

It used to be the best choice for jeans before 1980s.

In 1873, Levi's's first pair of jeans 501 was regarded as the world's first real jeans, and Nixon wore 501 when he visited Russia in 1960s. It used to be a symbol of American cowboy culture and capitalism.

But these brilliant history did not continue to help the brand maintain its brand attractiveness.

Since 2001, Levi's has frequently prosecuted its competitors, accusing Von Dutch, Fossil and other companies of copying their pocket designs.

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In 2007, Levi's was also known as "litigation leader", because in the 5 years from 2001 to 2006, it launched more litigation than Nike and Disney, which seemed to need more rights protection.

Prosecution is just a representation.

A guardian commentary reveals the real cause of the company's anger: "not because it was copied, but because it missed the cowboy fashion trend and tried to retaliate by litigation."

The missed 10 years obviously can not be compensated by litigation.

It is not surprising that Levi's's historical sales peak remained at 18 years ago.

Levi's's gold ten years is more than 30 years ago - 1985 to 1996.

With the launch of the jeans market, its sales amounted to $7 billion in 1996.

After that, sales fell all the way.

By 2000, Levi's's share in the jeans market had dropped from 31% to 14%, and last year's sales were only $4 billion 610 million.

Since taking office in 2011, CEO Chip Bergh is trying to re polish the Levi's signboard.

One of his biggest moves was the Eureka innovation laboratory set up last year.

In a 150 year old old house near San Francisco headquarters, Levi's is planning to change the design process to make it faster and cheaper.

At present, 30 employees of Eureka are tested with different colors, patterns and chemical reagents every day, and can produce 20 samples per week.

Because it is very close to the buyer team, the design and production department can quickly adopt new ideas.

Bergh has also set ambitious goals, and hopes that 80% of the design will come from this laboratory by 2015.

In marketing, Levi's is also trying to rebuild its brand image.

Last year, after the cancellation of Weiden+Kennedy with advertising agency, this year Levi's recovered the FCB advertising company that had worked in the period from 1930 to 1998, and is ready to strengthen the Levi's culture and launch the new advertising theme "Live in Levi's" to replace Go Forth, which lasted for 5 years.

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Another big hand is sports marketing.

Levi's has strengthened its cooperation with San Francisco Giants to become a sponsor of softball and rugby matches in the US.

In May last year, the group even spent $220 million to buy the naming right of San Francisco gymnasium for 20 years, renamed it Levi's Stadium, and the Super Bowl in 2016 will be held here.

"Nothing can be more American and democratic than these. They attract all fans."

Bergh hopes to arouse people's concern about the American spirit represented by Levi's.

Sales growth continued to be blocked, in order to improve profits, "thin" has become an inevitable choice.

In 2012, the group cut off the continuous loss of dENiZen's business in Asia, and in 2013, its profits rose sharply.

At the beginning of 2014, the group decided to carry out the cost reduction plan. In the first stage, 800 non retail and non productive jobs in the US and Asia were cut off, thereby saving 75 million to 100 million US dollars per year.

However, as Berge himself feels, the opportunities that Levi's has missed in the past 20 years and the challenges ahead are far from being easy to change.

10 years ago, Levi's lost its identity as a cowboy fashion leader and began to pform into a low end brand with low price as a competitive advantage by expanding wholesale channels and reducing production costs.

In 2003, Levi's shut down the last plant in more than 60 factories in the United States, cutting nearly 2000 employees.

This allowed Levi's to take the road of light assets, greatly reducing production costs, but also burying the hidden danger - the quality of Levi's jeans has been significantly affected.

In the same year, it also introduced a cheap series of Levi Strauss Signature.

The biggest selling channels in this series are WAL-MART, Kmart and other large stores.

Nowadays, no matter in the US consumer complaints website Complaints Board or on Amazon [micro-blog], many consumers will complain about the quality of this cheap brand.

Perhaps it is not bad compared with other jeans at the same price sold by WAL-MART, but Levi's brand itself will give consumers different expectations - it represents a strong, durable, good quality, and frankly Frank western culture.

To expand market share,

Usually a brand name and sales channel are completely independent. For example, Gap launched Old Navy, and Levi's also launched Dockers in the golden age of 1986.

However, Dockers didn't get the success of Old Navy. The group tried to sell Dockers 10 years ago, but it didn't close because of price reasons.

Up to now, 86% of the group's total revenue is from Levi's.

Although this cheap series saved the trend of Levi's decline last year, the brand experienced two digit growth last year. However, the combination of Levi's brand and cheap supermarket image has irreparable damage to the brand image.

This injury may also partly explain why even the Asian emerging markets that everyone is talking about has not brought much hope for Levi's.

When more and more young people like Ye Yun, who are keen on fashion, saw Levi's in supermarkets in North America, they were disappointed.

In order to attract China's rising young middle class consumers, Levi Strauss group also launched a new brand dENiZen for the market in 2010, selling around half of the price of Levi's. At that time, it planned to open 1000 stores in China in 5 years.

However, from its product design to its display, it is not able to compete with the fast fashion brand at the same price. Finally, Bergh decides to stop the loss and pfer the brand to the middle and low end of the US market.

"China is a challenge. We have tough domestic and global brand competition in the face of inventory problems."

Bergh said.

At present, Levi's accounts for only 15% of its total revenue in the Asian market.

The effort to expand the product line did not seem to be ideal.

To increase revenue, Levi's, like many brands, has launched T-shirts, skirts, sweaters, sweaters, shoes and even underwear.

But because of its stubborn brand image, jeans still account for about 80% of sales.