Levi Strauss & Co. treads into the potentially treacherous waters of channel conflict with this week's launch of its first major online selling effort.
The jeansmaker has traditionally partnered with retailers to distribute its product. Over the years, however, those partnerships have become strained with some prime customers, such as Sears, Roebuck & Co. and J.C. Penney Co., becoming competitors by developing strong private-label jeans brands of their own. Department stores also have capitalized on the popularity of designer labels.
KEEPING THE CUSTOMER IN MIND
Faced with a market share slide from 31% in 1990 to 17% for the first six months of 1998, Levi Strauss reorganized management to focus on consumer needs. While that reorganization did not impact its slowly evolving Web sites, customer access is the focus of the sites that now include online ordering and payment.
"Our single-minded goal is to make it easier to shop and buy our products," said Jay Thomas, director of digital marketing, Levi's brand.
The move sets up a potential conflict between electronic stores and brick-and-mortar retail sites. At the same time, many retailers are setting up their own online efforts.
In fact, Levi Strauss asked some of its prime customers not to include its products on their retail Web sites, Kent Anderson, Macys.com president, said at a news conference last week.
"At the present time, they have asked us not to present their product on the Internet," Mr. Anderson said, declining to comment further.
Other manufacturers are taking a different approach. Clinique recently launched its own e-commerce site, but its products will be available for sale at the Macy's online store as well.
Levi Strauss says its two upgraded Web sites, www.levi.com and www.dockers.com, will showcase more items than many department stores regularly stock, particularly fashion items such as cargo khaki pants and its more expensive Silver Tab line.
The sites, each with 120 items for sale, provide "a real sense of the breadth of the merchandise" Levi Strauss offers, said Mr. Thomas.
SOLVING A PROBLEM
The sites also will offer consumers all sizes made in each line, solving another longstanding problem the company has experienced at retail. "You should expect your size is there. You don't walk out empty-handed," Mr. Thomas said.
Levi Strauss plans to use the online sites to showcase its full line of clothing beyond jeans, such as shoes, belts, women's tops, skirts and even snowboarding jackets--"products you didn't know we made," he said.
NEWSPAPER, RADIO BACK SITES
The sites will be backed by an estimated $5 million in online, newspaper and radio advertising, primarily in top college markets.
CKS Partners, Cupertino, Calif., is the online agency. TBWA/Chiat/Day, Playa del Rey and San Francisco, handles U.S. advertising for Levi's. Foote, Cone & Belding, San Francisco, handles Dockers' advertising.
Levi Strauss also will run a promotion in which three college students will get $500 per week to spend a "semester online" by performing all of life's necessary tasks online, from finding a mate to buying food. An in-room camera will allow live programming with the students, to be chosen later this year, during the course of the year.
The sites include new features, such as See it Big, which allows customers to get close-up views of buttons or cuff details. Another, Style Finder, offers fashion advice based on individual tastes.
Copyright November 1998, Crain Communications Inc.