Four major trends shaping retail, according to Levi Strauss' Chip Bergh
Bergh pointed to sustainability, digitisation and ecommerce, supply chain resilience, as well as the importance of cost pressures and inflation, in a wide-ranging interview with Susan Hart, co-leader, global retail practice at the executive search firm Spencer Stuart.
In terms of sustainability, Bergh went into detail on the stress the apparel industry is putting on the planet. At Levi’s, the company is working to reduce its environmental footprint by using fibres such as hemp, that are more sustainable, while looking for ways to reduce water usage.
“Sustainability used to be pretty niche from a consumer standpoint and very Europe-centric. Now it’s truly global and cuts across generations. The young consumer in particular is really focused on this. If you ask a teenager today they will very likely say climate change is top of mind in terms of their concerns,” he explained.
On digital technology he warned that companies which failed to adopt it would simply die. He went beyond e-commerce, to note the importance of technology in everything from product design to supply chains.
“There’s so much of our business that can be digitised everything from how we design product to how we manage getting product to store. All of that can be digitised and take out time and touches, dramatically simplify the business is done.”
On supply chains he said he believed “globalisation is dead” and companies would increasingly look to produce goods closer to the markets in which they traded.
“Our industry has traditionally chased the lowest-cost manufacturing base around the world, but this is coming to an end. The name of the game today is supply chain resilience and agility,” Bergh noted.
“We’re going to see more manufacturing shifting closer to market because of the importance of that agility and responsiveness and having confidence that the product is going to be on the shelf in store when you need it to be.”
When it comes to rising cost pressures and inflation he said some of this was being driven by the pandemic, some of it by supply chain bottlenecks and some by shortages of labour in some parts of the world.
Finally, he turned to diversity, equity and inclusion, and admitted that ‘deprioritising’ diversity and inclusion in the early days was his biggest mistake with the company.
“Looking back, it was one of the biggest mistakes I made in my 10 years here as, in my heart and soul, I believe that a diverse organisation will outperform a homogenous one every time.”
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