Levi’s exec says eCommerce forcing focus on inventories

Retailers can no longer accept a lack of shelf level inventory in-stocks and inaccurate inventories, according to Carrie Ask, executive VP and president of global retail at Levi Strauss & Co.

Speaking at this month’s NRF Big Show in New York, Ask said that after travelling the world and observing consumers purchasing intent and behaviour in-store, the 164 year old brand’s executive team had an ‘a-ha’ moment.

“Now while store traffic is declining, we discovered something else, something that we think is fundamentally different about store traffic today,” she said.

“We discovered the purchase intent of consumers visiting stores, is rising. Makes sense, they don’t have to go to a store anymore, so when they do, their intention is higher.

“In addition, we found that ‘out of stock’ and ‘couldn’t find my item’ are the top barriers to purchase for consumers that plan to make a purchase, as well as consumers who purchase but didn’t get everything they wanted.”

Ask said the opportunity and stakes are now higher than ever for physical retailers. On the opportunity side, Ask said Levi’s were underestimating the potential within its store traffic to drive sales and conversion. And on the stakes side, the clothing brand also realised that when out of stock, the opportunity to drive a planned or impulse purchase is removed, resulting in frustrated and disappointed consumers that may decide their next trip, time and energy wasn’t worth it – potentially jeopardising future traffic.

“In-store inventory insights, specifically shelf level instocks and accurate inventories are an age old problem for retail,” said Ask.

“While we’ve had inventory management and planning systems for some time but typically limited to telling us whether an item is in the store but not whether it’s on the sales floor in its designated location on the sales floor.”

In addition, Ask said instore inventory is often inaccurate, with sales associates in-store stock checks using radio or POS often culminating in coming back empty handed, not able to find products ‘even though the system said there was one.’

“The truth is, full stop, this happens all the time and as a retailer and an industry, we can no longer accept this lack of shelf level inventory instocks and inaccurate inventories, which are an Achilles heel for us.

“In the bad old days the consumer didn’t have very many choices and they could either keep looking and keep shopping, maybe go to a competitor or they had to settle for a substitute item, waiting for it to come back in-stock or to go without but consumers don’t have to settle anymore.”

Levi’s is trialling technology from Intel in its stores, including the RFID tagging of all products and ceiling mounted sensors, trigger replenishment actions and get staff away from focusing on inventory management and back onto its consumers.

“The goal is real-time, all the time, inventory insights, which brings several benefits,” said Ask. “It also gives our planning and allocation teams more accurate information to guide inventory decisions.”

Our sister site Inside Retail Australia joined 35,000 retail leaders from over 95 countries at this year’s show – where over 500 exhibitors, 300 speakers and over 70 educational sessions provided insights into what’s driving retail of today. Follow Inside Retail’s coverage of the NRF Big Show in New York online and in our weekly and quarterly magazines, featuring big name retailers Macy’s, Neiman Marcus, Target, Kohl’s, Ikea, Target plus Sir Richard Branson’s insights and more.

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