Levi’s has been riding a wave of impressive growth of late, and its focus on being authentic—as a brand, employer and global citizen—has contributed to that success.
Jennifer Sey, chief marketing officer for Levi’s Global Brands, spoke to an audience at Brandweek last week to illustrate the value of companies sticking to their principles in 2018. It turns out you can measure that value in dollars and cents.
And according to Sey, it all started with an ad.
“In 2016, the day after our presidential election, we had an ad in the can that we were going to run for 2017. It was a nice ad about tapered jeans and skinny jeans for women,” Sey said. “I came into the office and I thought to myself, ‘We need to do something different. We have the opportunity—not just the opportunity, but the obligation as Levi’s.’”
The result was an ad most television viewers should be familiar with. Titled “Circles,” the commercial featured scores of people from all backgrounds celebrating life (and Levi’s) to a dancing beat and, although their differences are vast, each is brought together by the spirit of denim. According to YouTube, “Circles” was one of the top 10 most-watched ads in 2017, as well as into early 2018.
“It’s had a remarkable impact on our business. We were up 9 percent last year, which for a brand as big and old as Levi’s, is pretty huge. We’ve had three-quarters of double-digit growth on the top and bottom line, and it looks like it’s going to be a great year for us,” Sey said. “I’m not saying this ad is solely responsible, but it certainly has played a role. It has reminded us who we are; we are a brand that leads with our values.”
Sey said Levi’s values are at the root of its track record for sustainability, equality and support for worker’s rights. Levi’s has pioneered waterless finishing for blue jeans, Sey touted, which has already saved 2 billion liters of water to date, and the company is converting the technology to open source so it can be freely shared with others in the industry.
Levi’s was also the first Fortune 500 company to offer same-sex marriage benefits to its employees and actively supports the UN’s Women’s Empowerment Principles to increase gender diversity in the workplace. The company also partnered with Alicia Keys to build and fund a music studio at the Edward R. Murrow High School in Brooklyn, New York, to support music education at an inner-city school.
Levi’s Worker Well-being initiative encompasses 12 countries and roughly 100,000 employees in factories across the world. Sey said roughly 70 percent of Levi’s products are produced in a supply chain with programs that work to provide “financial empowerment, health and family well-being, equality and acceptance,” and the company has committed to boosting that number to 80 percent by 2020.
While these figures are impressive, they would mean nothing without sustainable success and long-term profitability. According to Sey, the key is to engender “brand love” with a strong purpose, and she believes authenticity is critical to making the relationship between a brand’s purpose and its bottom line work.
“I think people want an easy answer for this,” Sey said. “They want to be able to sort of plot it on a grid and go, ‘Oh, here’s the white space,’ just like they think through their brand positioning. But, it doesn’t work that way because it has to be real and it has to be true or it doesn’t work.”
Using profitability as a measure of authenticity may not be the most appropriate indicator, but Levi’s recent growth is certainly an indication that it is doing something right. Just one day after Sey’s presentation, Levi’s announced its growth had extended to a fourth straight quarter, with a 10 percent increase in net revenue, to $1.39 billion, thanks to “brand growth in all regions and channels.”
Direct-to-consumer revenues grew 14 percent on performance and expansion of the retail network, as well as e-commerce growth. The company had 65 more company-operated stores at the end of the third quarter of 2018 than it did a year prior.
Levi’s net income for the quarter jumped 45 percent, to $130 million, due to the strong showings in its wholesale, retail and direct-to-consumer businesses, along with some favorable conditions, such as lower income taxes, higher operating income and gains on the its hedging contracts.
Chip Bergh, president and CEO of Levi Strauss & Co., said the most recent results put the brand “among the top performers in the industry.” And according to Sey, that’s due in large part to establishing an authentic purpose for the brand.
What’s next for Levi’s? Wearing a T-shirt that simply said “Vote,” Sey gave the audience a sneak peek of the newest ad: A montage of Levi’s-clad people from all walks of life celebrating their democratic right to make their voices heard.