Levi Strauss & Co. is seeing its digital channels drive direct-to-consumer (D2C) growth, with eCommerce customers proving willing to pay full price and to spring for premium products.
The apparel company shared in its second-quarter fiscal 2024 financial results, reported Wednesday (June 26), that it saw 8% revenue growth, with D2C revenue up 8% globally and 12% in the U.S., with eCommerce gains even higher.
“eCommerce continues to be a big opportunity for us, up 19% this quarter, led by double digit growth in the US, where we are seeing strong full-price sell through and strength in women, now comprising more than 50% of the business in this channel,” President and CEO Michelle Gass told analysts on a call. “Ongoing initiatives to elevate our site and enhance the consumer experience, as well as deliver a more premium and expanded assortment, continue to drive our momentum across all of our markets.”
Indeed, most consumers shop digitally directly from brands or retailers at least some of the time, per PYMNTS Intelligence’s new study, the latest edition of “How the World Does Digital.” The report digs into the digital behavior of 67,000 consumers across 11 countries that make up approximately half of the world’s GDP.
The results reveal that consumers shop online directly with brands or retailers an average of 6.7 days a month. The majority of consumers did so at least once a month, while only 21% did so at least once a week.
“Our transformational pivot to operating as a [D2C]-first company is yielding positive results around the world, giving me great confidence that we will achieve accelerated, profitable growth for the rest of the year and beyond,” Gass said in a statement.
Plus, young consumers especially like to shop directly with brands, suggesting the opportunity for further growth in this channel as these shoppers gain in spending power. The PYMNTS Intelligence report “The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces” reveals that 43% of Gen Z said they definitely or probably prefer making eCommerce purchases from a brand’s own online store, above the 28% of the population as a whole that said the same.
Additionally, the same study found that consumers with more cash to burn often choose D2C, with those who make more than $100,000 a year proving disproportionately likely to prefer the channel.
Notably, however, most consumers continue to engage with physical stores at some point in their purchasing journey. PYMNTS Intelligence’s “2024 Global Digital Shopping Index: The Rise of the Click-and-Mortar Shopper and What It Means for Merchants” revealed that 71% of consumers across the seven countries surveyed do so.
Specifically, four in 10 are Click-and-Mortar shoppers, engaging both with digital technologies and the physical store, and one-third prefer to shop in stores only. As such, Levi’s is innovating on the in-store experience.
“In Q2, we opened our largest store in Thailand at the Central World Mall in Bangkok. This store is a pilot where we’re implementing learnings from consumer research to improve the in-store consumer journey,” Gass said. “By applying changes like displaying our denim lifestyle categories more visibly throughout the store and elevating our premium collections, we drove revenue growth in both tops and bottoms. Results are encouraging.”
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