AI Helping Match Inventory with Demand for a Wide Range of Clothing Products
Levi Strauss Blue Jeans. One of the most iconic American exports ever produced has gone AI. In an article written by John McCormick for wsj.com we find Levi Strauss & Company have been turning to algorithms to help predict its markets and keep up with their customers worldwide.
One key to the effort is a massive data repository that the company has built on Alphabet Inc.’s Google Cloud, according to Katia Walsh, Levi’s chief strategy and AI officer. It contains inventory and sales information from Levi’s stores as well as some stores operated by other retailers, she said. Before joining the company, Walsh led data and artificial intelligence efforts at Vodafone Group PLC and Prudential Financial Inc. Walsh has a Ph.D. in strategic communication with a specialization in quantitative methodology.
The repository includes information that Levi’s shoppers share with the company. It also houses a range of external data, derived from public and private sources, that track consumer buying patterns and behaviors, weather and climate forecasts, economic trends and more.
Weather and climate forecasts for blue jeans? Yes and even more data is being collected these days by nearly every form of commercial business. This cache, Ms. Walsh said, is vital to implementing Levi’s enterprise-wide AI capability. The application of machine learning and automation to the data has helped the company enhance personalization of consumer marketing, make informed pricing decisions, predict demand, and optimize fulfillment, all of which have helped the business, she said.
“AI is playing a significant role,” Ms. Walsh said. The application of AI to pricing “enabled us to not discount broadly and as deeply as has been the practice in the past,” she said.
By making use of machine learning Levi Strauss has zeroed in on several data points in their consumer base. And having the power of AI to analyze the data they collected have boosted their revenues considerably, especially after the pants company took a pretty big hit during the pandemic.
Levi said in October that it expected net revenue for the fourth quarter, which ended November 28, to be up 20% to 21% compared with the $1.39 billion in net revenue it reported in the three-month period ended Nov. 29, 2020. That would put net revenue in the $1.66 billion to $1.68 billion range. It reported net revenue of $1.57 billion for the fourth quarter of 2019 and $1.59 billion for the last quarter of 2018.
That is a solid return on any AI investment that Levi Strauss has made in its algorithms.
“AI and tech initiatives have enabled us to transform our business.… It is a priority for the company as we unlock value for all our stakeholders,” said Levi’s finance chief Harmit Singh.
By using AI, Levi Strauss found it had to discount products far less often, which is always great for any bottom line.
read more at wsj.com