Levis.com was launched by fashion retailer Levi Strauss & Co. in 1996 as an informative company Web site that included pages on the firm's history and current operations, culture, and fashion. Two years later, the Web site became a sales outlet for more than 120 clothing items in 3,000 different styles. However, in 1999 Levi Strauss pulled the plug on its online sales efforts, using the Levis.com site instead to promote the firm's brand image.
Apparel retailer Levi Strauss was established in the 1850s and became known throughout the fashion industry for its name brand clothing including jeans, casual and dress pants, shirts, jackets, and accessories. Seeing the Internet as a potential marketing channel, the firm developed an Internet strategy in the mid-1990s. Launched to cater to both U.S. and European customers, the site included pages on the company's history, as well as product and marketing information. Levis.com also featured pages, dedicated to its target audience of 15-to-24-year-olds, that covered fashion and cultural issues. Shortly after the Web site's debut, Levi Strauss introduced a new marketing scheme entitled I-candy. The interactive advertising was available on various Web sites, including music sites MTV and Addicted to Noise, in the form of a blinking eye. When Web surfers clicked on the eye, an interactive commercial appeared, touting the Levi's brand.
While Levi Strauss continued to utilize the Levis.com Web site for marketing purposes, company management eventually set plans in motion to turn the popular site into a shopping destination. The firm's market share had slipped from 30 percent in 1990 to 17 percent in 1998, and Levi Strauss planned to use its online efforts to regain a hold on the apparel market. The company also was prompted to begin e-tailing when customers began complaining about not begin able to order Levi's brand products online or by telephone. As a result, an e-commerce plan was developed and in November of 1998 Levis.com began selling 120 items from the Levi's branded apparel line. The site featured a tool entitled Style Finder, which asked online shoppers a series of questions related to fashion, music, and entertainment, and then made apparel suggestions based on the shoppers responses. According to Digital Marketing Director Jay Thomas, as cited in a 1998 Digital Age article, the move into e-commerce reflected Levis.com's "single-minded goal. . .to make it easier to shop and buy our products."
While customers applauded the firm's entrance into the online selling arena, its retailers were less than thrilled. When Levis.com began selling branded products, Levi Strauss retained exclusive online rights to both the Levi's and Dockers brands. This move prevented retailers—including Sears, Roebuck & Co. and J.C. Penney—from selling Levi's branded products online. At the time, retailers accounted for a large portion of company sales, and some analysts believed the online site might undercut these sales and undermine the firm's relationship with retailers.
Levis.com faced many problems and did not fare well in its first year as an online shopping destination. The transition from selling large quantities to retail outlets versus shipping to individual consumers proved to be costly. The site did not sell the famous Levi's 501 Blues line until March 1999, worried that Asian and European customers, who could not buy the jeans online and were paying more than U.S.-based customers, would boycott the firm. Many customers continued to shop at retail outlets to avoid online shipping charges. In addition, the online return policy also was discouraging to customers because merchandise bought on Levis.com could not be returned at retail stores.
At the same time, Levi Strauss was in turmoil. Long-time company president Peter Jacobi retired in January 1999. Having cut its workforce by 40 percent over the previous three years, the firm was struggling with distribution issues, often unable to keep supplies of its products in stores. Sales during 1998 fell by 13 percent, which forced Levi's to cut costs, including those related to e-commerce efforts. Consequently, Levis.com's advertising budget was slashed. With little support from Levi Strauss, the site did not attract the Web traffic necessary to make it a successful venture, and without a substantial Web audience Levis.com did not garner enough attention to effectively compete with major competitors. Many of the Web site's technology staff members began seeking employment with other Internet-based firms.
Continued losses at Levi Strauss forced the company to take further action. In November of 1999, it announced that Levis.com would no longer sell Levi's branded apparel online after the holiday season. The company stated in a 1999 E-Commerce Times article that "during the past year, it became clear to us that the cost of running a truly world-class e-commerce business is unaffordable right now as we look at other competing priorities." Levis.com remained online, however, and was once again primarily used for marketing and communications efforts. Levis.com's exit from e-tailing also strengthened the firm's relationship with retailers. After the announcement, retailers J.C. Penney and Macy's were given the go-ahead to start selling Levi's branded apparel on their Web sites. The move proved effective, as the J.C. Penney Web site sold 50 percent more Levi's branded apparel in six weeks than Levis.com had sold in 12 weeks.
Philip Marineau, the new CEO of Levi Strauss, also was confident that Levis.com's exit from e-tailing was a good move. In a February 2000 Daily News Record article, he commented, "I view the Internet as a key asset. But we're not fulfilling goods on a mass level, let alone one at a time. I'm trying to improve retail partnerships, not drive a stake through them." After shuttering the e-tailing operations, Marineau put plans in motion to improve the use of Levis.com as a marketing tool. The firm shifted control of its Web operations in-house from an outside agency in early 2000. The site's new focus was to promote the Levi's brand image and to encourage Web surfers to purchase Levi's apparel from its retailers' Web sites.
By 2001, users across Europe, South America, Asia Pacific, and Latin America were able to access Levis.com. Along with information on Levi's apparel for men, women, and children, the site also featured company commercials and fashion information, as well as the firm's Original Spin program, which allowed consumers to order customized jeans at certain Levi Strauss stores. As Levi Strauss focused on improving its bottom line, the company continued to use Levis.com as a strategic communication and marketing tool.
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SEE ALSO: E-tailing; Mass Customization