iStock.com/JHVEPhoto
Should More Retail Stores Emulate Levi’s ‘NextGen’ Format?
Levi Strauss & Co. has launched a revamped store in Kyoto, Japan, adopting the “NextGen” format aimed at improving the shopping experience. The newly reopened Levi’s store, located in the Teramachi Kyogoku shopping district, occupies a spacious 570 square meters across four levels. This expansion makes it more than double the size of its predecessor, which had just two floors.
And this isn’t your typical Levi’s store in any standard shopping center or location. Through a combination of store design layout and locally tailored offerings, it makes a statement and aims to generate more sales from its community and beyond.
According to an interview in 2020, Levi’s NextGen stores feature innovative designs, digital enhancements, and revamped operational models, all tailored to emphasize customization, fit, and style guidance. This approach aims to deepen the connection between the brand and its consumers, leveraging brand content and omnichannel capabilities.
Feedback from consumers has been overwhelmingly positive so far. According to Alanna Shipley, director of global shopper insights for Levi Strauss & Co., “Consumers really like the look and feel of our NextGen stores. During testing they talked extensively about how the concept is a nice combination of Levi’s long history with a modern twist.”
The fitting rooms, in particular, have been a standout feature, described as upscale spaces that customers actually enjoy spending time in. The design team prioritized creating spacious, comfortable fitting rooms, fostering an environment conducive to style tips and interaction with both friends and Levi’s stylists.
According to Levi’s, a significant portion of conversions, approximately 70%, occur when customers engage with the fitting rooms. This highlights the importance of offering an engaging and comfortable fitting room experience as part of the overall retail journey.
Another thing customers like about Levi’s NextGen stores is the introduction of Tailor Shops. Consumers have expressed enthusiasm for the range of customization services offered, seeing it as a compelling reason to revisit the store. While customers may limit their denim purchases annually, the ability to personalize items for themselves or as gifts provides an incentive to return.
In 2020, Levi’s opened the doors to its first U.S. NextGen store in Palo Alto, California. Spanning 2,650 square feet, this store was designed for the modern shopper, featuring an inventory curated based on local customer data. In line with the evolving retail landscape, the store integrated a suite of digital in-store tools, catering to the needs of tech-savvy customers.
To celebrate the reopening of the Kyoto location, the store is offering limited-edition items exclusively available in Kyoto. Additionally, the interior space’s design and decor draw inspiration from Kyoto’s rich history and culture. It features lanterns crafted by the renowned Kyoto-based lantern maker, Kojima Shoten, and decor elements adorned with kara-kami paper from the well-established local brand, Karacho.
A standout feature of the Kyoto store is the Levi’s Tailor Shop on the ground floor. Here, shoppers can customize their Levi’s apparel through various options like embroidery, patches, and fabric paneling. Some materials and customization choices will be exclusive to this location, including rare fabric from the renowned Chingireya antique textile store and patches designed by local illustrator Hideto Honda. This customization service aligns with the store’s goal to cater to shoppers’ desire for self-expression.
“With the Kyoto store, we’ve built a unique experience representative of the culture and history of the city,” David Hamaty, general manager for North Asia at Levi Strauss & Co., said in a press release. “We’re also bringing to life exclusive, hyperlocal customization options that will allow shoppers to tailor their Levi’s apparel to their specific taste and expression.”
Levi’s piloted the NextGen concept in Europe and Asia and has since opened a few other NextGen stores in global locations like Latin America.
Discussion Questions
What does the significant conversion rate in fitting rooms reveal about the importance of physical retail spaces in an increasingly digitalized shopping landscape, and how can other retailers leverage this insight to enhance their in-store experiences?
As Levi’s expands its NextGen stores globally, each reflecting the local culture and history, how can brands strike a balance between maintaining a consistent brand identity and adapting to diverse cultural nuances to create authentic connections with consumers worldwide?
Poll
Loading …BrainTrust
Liza Amlani
Principal and Founder, Retail Strategy Group
Mark Self
President and CEO, Vector Textiles
Whether retailers should emulate the flagship store approach of Levi’s in Tokyo is a matter of debate. I’d be interested to know whether the store is profitable, or if it loses money but is seen as a marketing expense. The experience of many brands, like Abercrombie & Fitch, is that flagships don’t always pay their way. However, what Levi’s approach shows is that stores are very relevant and that the physical experience is a great sales converter.
The other key lessons come from localization of ranges (something many retailers are bad at), allowing customization options (which will be very popular in Japan), and using digital technology in a way that enhances the customer experience.
Many of these elements like the tailor shops have been in their stores for years now. Fitting room conversions of any retailer are much higher, it’s nice they understand that. But I’ve found the associates rarely are able to speak to the shopper. At one store I visited with the customization, the desk was messy and a handwritten sign saying how long it would take to get personalization, etc made it from “how cool” to “won’t work for me.” Any brand design PR that doesn’t talk about additional training/staff often means you have a pretty store that doesn’t convert.
Levis’ localized strategy across the store experience and product mix could be the winning strategy that all retailers need to consider. But Levi’s must have exceptional product obsessed store associates on the shop floor to make this concept successful.
I would love to see more retailers take this hyper localized + experiential approach to their stores but I am not sure they would make this investment. They are too concerned with reducing operating costs and most strategies today are reactive. Inventory management is still a top concern and until retailers can get their product assortment in check, their focus will not be innovating their stores.
Love this. So many retailers don’t bother to localize on any level. Hence the reason we have some retailers selling coats and sweaters in the heat of Arizona…
I love this! Difficult to scale, however, but the more unique the shopping experience, the more likely the store will be a success.
I guess someone might say I am a Levi’s fan. At the moment, I am wearing a Levi’s denim shirt and jeans, of course. My closet is filled with both. But the last time I was in a Levi’s store was maybe 15 or 20 years ago. Once I find the fit, I simply buy online. But the next time I am in Japan, I will try to get to this store. It sounds inviting. Maybe I will find a new style?
To be more serious. This is the way all retailers should think. Build the 2030 store now.
Levi’s just put a giant exclamation point on the role of and the importance of physical stores. Customers want to Explore + Experiment. Proof positive coming out of upscale, spacious fitting rooms. Proof positive coming out of the ability to personalize. Part of this new, upgraded store Execution is that customers have higher Expectations about the physical store Experience than they did just a couple of years ago. It’s long overdue for many retailers. But the other part is the nature of Levi’s product…denim jeans. How does a brand inject differentiation and distinction into the denim jeans category? What fabrics, fits, trims and levels of distress are left to be offered that haven’t been on the market already? So Levi’s injects differentiation and distinction into the shopping experience itself. Denim jeans make a great blank canvas for the customer to inject their own ideas. So what other retailers have straightforward product that would benefit from the opportunity to have customers play with some personalization? And what if the clock were turned back about 50 years and Levi’s collaborated with Gap…?!? Maybe not a likely scenario, but fun to think about.
That’s what I like about this, Jeff. For all the negativity around physical stores, Levi’s is showing that they still play a vital role in brand building, sales conversion, and driving profit.
In my opinion, the high conversion rate in fitting rooms highlights that physical retail spaces still holds importance in the rising digital shopping scenario. It shows that customers still value the tangible experience and personal interaction that physical stores offer, especially when it comes to trying on clothing. Other retailers can definitely take inspiration from Levi’s to invest in spacious, comfortable fitting rooms and prioritizing personalized service from knowledgeable staff. By creating an inviting environment that facilitate meaningful interactions, retailers can enhance the overall in-store experience and increase conversion rates.