'There is an appetite within the consumer to make a product their own': Lee's Philip Ward

This month, Lee launched 'yoga-inspired denims'. And there is a lot of reportage on 'athleisure' wear eating into jeans' share. What is the reality of the denim sale drop in the US, and across the world? 

 

One of the great characteristics of denim as a category but also in particular about Lee, has always been about innovation. Back from its very beginning, there’s a long history of innovation and observation of what the consumer is looking for and adapting the product to what the consumers love. A lot of lifestyle-based apparel is part of what the consumer is looking for and we believe that by providing them with a dynamic denim product we’re able to bridge that gap between the beautiful aesthetic of denim and the dynamic properties, flexibility and comfort that the consumer has started to look for in some of the more athleisure-based products. 

 

We are constantly listening to the consumer. We view every consumer interaction as something that has a potential impact on the share of wallet available to not just the denim category, but across the clothing category. 

 

We don’t look at potential change in direction of sentiment on denim as a threat. We look at it as an opportunity to innovate and as an opportunity to expand the concept of denim in the eyes of the consumer.

 

Consumers today very much consider denims to be a part of their lives. For the brand and for the category, one of the most important determinants of the way forward is recognising lifestyles and changes in it. Definitely, the consumer is looking for performance and for products that suit their lifestyle. We are aiming to address that. But at the moment with everything that’s taking place, whether they are a fad or a trend remains to be seen.

 

We are seeing substantial growth in the (Apac) region. What we are doing, is looking at the global trends, and interpreting those to make sure for the Asian and Indian consumer we stay ahead of the global trends. 

 

Your second quarter earnings report for 2014 attributes drop in sales of jeanswear to "Consumer trends in women’s denim, which primarily impacted the Lee® brand", among other factors. Sales in Apac was reported to be growing in low single digits. Can you explain these trends and briefly state how you plan to counter them?

 

Coming from VFC, that is the North American reporting number. 

 

We (Apac) continue to be in growth. We have a very strong programme of innovation from both a technical and fit perspective. One of our major thrusts next year will be highlighting innovation within the category from a technical (fabric) perspective. We anticipate to continue our aggressive growth curve within denim to continue to redefine Lee within Asia as a critical and fundamental part of women’s wardrobe.  

 

You announced two appointments in September 2014: Dan Cherian as VP-global innovation, and Sudhakar Puvvada as VP-global jeans innovation center. What is the pace of innovation on denim by Lee? 

 

VF Corp are very much aware that innovation is a key part particularly for the Lee brand as well as all our denim brands. There’s a substantial investment in a centralised approach applying both consumer insights and science to denim innovation. We’re centering our design and innovation center in California at the moment. The approach includes developing true and clear insights from the consumer, determining what resonant benefits they are taking from the category, co-creating those benefits with them with our technical partners. 

 

How does this (innovation) manifest in the market? What is the rate at which new collections are introduced? 

 

It varies market to market. But we do enjoy in many of our markets such a strong franchising and distribution network, that we have the opportunity to test a lot of our products in and across geographies and price points. 

 

There’s no question that right now there’s an appetite for new products and innovation. Having our own stores allows us to not only to showcase the product but also to get clear and concise feedback from our store staff and our consumers.   

 

We’re introducing two major collections a year and within those are three seasons in each collection, broken up into spring, summer and fall-winter. 

  

​There are news reports on manufacturers going to create a pair of jeans that can accommodate the iPhone6. Should that be construed as a sign that denim makers are lagging on innovation, given there were large phones already? {Or was this Apple's PR spin?} 

 

I haven’t heard of this happening but it doesn’t surprise me, particularly with the way denim has evolved. It has always been such an adaptable category. At the very first, denim was made as work wear for miners so that it would hold up according to the rigours of their labour, then with the watch pocket that ended up being used as a coin pocket. In the spirit of the category, I’m sure there will be experimentation with pockets, which is nothing new. iPhone 6 is very hot news right now and I’m sure some manufacturers will take that into consideration. I’m not saying that we’re doing that today, but we do incorporate generous pockets regardless of what brand or technology you choose to use.

  

We don’t define innovation as the carrying capacity of a product. We talk about true innovation in terms of the fabric. We’re working very hard on a number of fronts to develop fabrics that meet the needs of the consumer from a dynamic use point of view, use, durability, wearability and comfort in different climates. 

 

You also debuted a personalised label engraving machine in some markets recently. What has been the offtake? So you see scope in India? 

 

If you look at global trends, we do believe that there is an appetite within the consumer to make a product their own - whether its customising their computers, their phones or their footwear. We believe that denim is something so personal in both choice and use that customisation is a great part of that. At the moment we’re trying this in China. If it does succeed, it will be something we will very much consider for a roll out.

  

There is Lee and there is also Wrangler in the VF portfolio (and now Timberland). Who is the TG for Lee and who is the TG for Wrangler? Are they clearly differentiated brands, in terms of audiences? 

 

In the denim coalition we (VF) have four brands and the two most significant brands in terms of volume are Lee and Wrangler. In India, particularly, they both enjoy very strong market share and it’s critical for us to differentiate both those brands - in terms of how we sell them to the consumer and in their communication and product executions. 

 

Lee targets what we call the ‘progressive denim lover’. This category of consumer is very inquisitive by nature, is somewhat of a graduate age or above up into the mid-30s, and they live an exciting metropolitan life. They’re very much inspired by the city life and the urban influences that surround them. Their interests are as wide and diverse as films, music, the arts, photography or just general urban exploration. 

  

Wrangler is a fascinating brand in the sense that it was born in the era of the iconic American cowboy. The relevance remains today particularly in a market like India, where we draw inspiration from the motorcycle culture that exists here. 

 

In a world as diverse as we have today, with people having incredibly broad interests, is always opportunity for overlap and I’m sure some consumers identify with both brands. We make sure both are brands are very much rooted in authenticity and as we continue to evolve the brands, one of our key pillars of interaction will be to participate in the lives of the consumers both in the digital sense and a participating sense. Hence, we have the Lee Archive Tour going on.   

  

​Are there synergies that have been explored between VF brands on the consumer / retail front? In India? 

 

We like to give our brands the respect and the room to have their own process of executions. In relation to what the consumer sees, we’d like to believe that it’s not so much a collaborative effort, but that we’re putting out brands in the best possible way so that they can in a healthy way compete in a marketplace.

  

At this point in time, I would say that we will continue to differentiate the brands.  

 

In India, we haven't seen much of the '125 years' messaging from 'The Jeans That Built America'. Will we?  

 

We have transferred a lot of our advertising to our owned and earned media. And we will continue to make that migration into the digital space but continue to invest heavily in the last mile. We’re more about making sure that we’re investing in OOH and our retail stores. Print will always have a place in the media landscape. Our focus will remain in creating conversation with our consumers rather than communication.   

 

The direct-to-consumer retail channel is growing for you in the US. What is the scene in India? 

 

Our direct to consumer footprint is very much part of our daily conversation - on how we can expand and improve that even more in the current and near future. The consumer will be having a different level of expectations based on how they research, purchase and receive their goods. Building our digital ecosystem which includes our retail and online digital partners is an organic process; one that we’re very much enjoying as a brand, finding out what works for our consumers and us.   

 

How much does the online channel contribute to sales globally, and in India? How do you see this growing in both? 

 

The acceleration of the digital channel is evident in both China and India right now. We’re seeing the importance of that channel; of having a complete online and offline presence to best showcase products. Is that it is in substantial growth.

  

Within the Lee product portfolio, how is sales split (ranges from T-shirts to Shirts to Blazers to Denims...)? Globally and in India? How is this changing - are non-denims contributing a larger share today?  

 

As a jeanswear brand, Lee is our core focus. We are a bottoms-focused business with a healthy tops business. We are experiencing growth in our accessories business season on season and as the consumer continues to become more and more sophisticated, what you will see is an increase in performance fabrics in the product mix, more technical solutions coming into play across the portfolio.

 

In terms of revenue engines, all our categories are growing. Our growth in denim, specifically women’s denim, continues.

 

We are a denim company with a strong non-denim focus as well.    

  

What role does market research play in the jeans category? 

 

Market research and particularly consumer insight is central to our brand health. We invest significantly in it whether it is campaign, a check-in with our consumer regarding our product, events etc.

 

If anything our investment and efforts towards it will only increase in the future.

 

Where does the category stand today - from work wear, is it now comfort wear or style statement? Where would you want it to be for brand Lee? 

 

Denim is a fantastic roadmap for where the world is going.

 

​Ever since the 1950s, the denim became a symbol of personal freedom for a generation. Denim continues to be about self-expression and has been a material manifestation of personal choice. The fact the denim holds a unique place in a wardrobe both sentimentally and technically says that there aren't many items you can acquire and possess that you value more over time. The more you wear your jeans, the more the stories they tell. We believe that has relevance in the age of sharing and communication. The storytelling aspect of denim continues and the innovative nature of Lee continues. So for us, denim will continue to be about self-expression.  

  

What is the fastest selling price point for a pair of Lee denims?

 

​We are a premium position brand and it would be unfair on our part to tell if it's the value-end that's selling better or the top-end.​

​​ 

Do you see the scope to expand the price brand on either end - especially the lower end? Some of the competition did introduce a separate brand for the entry segment. 

 

Any long-standing brand always monitors all equations when deciding the price value. Price to value is something we make sure we're attaining in our product. As regards any particular consumer shift, the changes will be thought about when the time comes. But currently, we remain a premium brand with a premium positioning. Our focus is on being an authentic, premium, innovation brand.​

 

Between domestic brands and international brands, what do you see as more potent competition in India for Lee? 

​

​It'll be fair to say that we consider any manufacturer in the market as a good competitor. It is about share of wallet. We don't just look at them in terms of being traditional denim competitors. It's about making sure we remain sensitive to consumer trends in both a strategic and competitive sense. 

 

To summarise, what are the primary marketing challenges for Lee in India? 

 

There are so many consumer interfaces right now that our challenge is to make sure that our communications carry forward that balance of turning communications into conversations, turning likes into shares and encouraging user generated content which will allow the consumer to make the Lee brand their own.

 

​It's about how best you align your paid media with your owned and earned media, to make sure you're connecting with new consumers while engaging existing consumers.​