Levi's Latin America strategy demonstrates the enduring power of physical retail, even for global brands. Ecommerce operators should note the distinct regional consumer preferences, the strategic use of 3PLs and local marketplaces, and the opportunity for experiential retail to drive significant growth. This approach led to 70% growth in Latin America for Levi's in Q1 2022.
Key takeaways
Focus on creating engaging in-store experiences, such as Levi's 'Indigo' concept with tailor shops, to draw customers into physical locations and differentiate from online-only competitors.
When expanding into new international markets, thoroughly research and adapt to local consumer preferences, as demonstrated by Levi's tailoring its offerings to 'fashionable' Latin American tastes (more akin to Southern Europe than the US).
Integrate local marketplaces (e.g., Mercado Libre) into your e-commerce strategy, maintaining strict control over product and pricing to protect brand integrity and prevent discounting.
Consider 3PL full-commerce providers for international e-commerce operations to leverage local expertise and infrastructure, rather than building everything in-house.
Explore the untapped potential of outlet stores in regions with high physical retail traffic, as these can be significant growth drivers where direct-to-consumer infrastructure is still maturing.
Levi's Latin American business is growing -- but it's very different from its Northern counterparts.
The apparel brand's svp and managing director of Latin America, Rui Carlos Da Silva Araujo, spoke on the Modern Retail Podcast about how the company approaches this part of the business -- and its overall approach to DTC. This episode was recorded live at the Modern Retail DTC Summit held in Miami. Levi's Latin American business grew by about 70% in the first quarter of fiscal year 2022, and Araujo said the company plans to continue growing and opening more stores.
While the brand's digital business is continuing to grow, Araujo said stores remain one of the most important sales channels. "We see this opportunity still in Latin America that people want to go to the physical stores," he said.
Currently, Levi's has 400 stores in the Latin American region, and the company is in the midst of an overhaul of its entire experience. It recently unveiled its Indigo store concept, which Araujo described as a way to showcase Levi's as lifestyle brand. It features fewer products and more experiences, such as in-store tailor shops. "The stores are really happier, the product is different," Araujo said. He hopes to have 50% of the Latin American stores to feature the Indigo model within the next two years.
But no one store is the same. That's because Levi's customers are different not only between regions, but also between countries. Latin American customers, he said, "are much more European-driven -- south European, like Spain in Italy -- much more than the U.S. in some countries in Latin America. So the Colombians, the Argentinians and the Brazilians, they are really, really fashionable."
Even with the emphasis on stores, Levi's is still focusing a great deal on digital. It has its own DTC sites for all the countries it serves, but local marketplaces like Mercado Libre also play a big role. "You need to have your mark, you have your own sites," he said. "But you need to have you
Frequently asked about this episode
What does this episode say about customer experience?
Focus on creating engaging in-store experiences, such as Levi's 'Indigo' concept with tailor shops, to draw customers into physical locations and differentiate from online-only competitors.
What does this episode say about e-commerce & marketplaces?
When expanding into new international markets, thoroughly research and adapt to local consumer preferences, as demonstrated by Levi's tailoring its offerings to 'fashionable' Latin American tastes (more akin to Southern Europe than the US).
What does this episode say about international expansion?
Integrate local marketplaces (e.g., Mercado Libre) into your e-commerce strategy, maintaining strict control over product and pricing to protect brand integrity and prevent discounting.
What does this episode say about retail strategy?
Consider 3PL full-commerce providers for international e-commerce operations to leverage local expertise and infrastructure, rather than building everything in-house.
What does this episode say about customer experience?
Explore the untapped potential of outlet stores in regions with high physical retail traffic, as these can be significant growth drivers where direct-to-consumer infrastructure is still maturing.
