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How Levi’s and Rent the Runway rode a pandemic sales boost

November 30, 2021, 10:04 PM UTC
Rent the Runway cofounder and CEO Jennifer Hyman and Levi Strauss CEO Chip Bergh both saw strong upticks in their businesses.
Stuart Isett for FORTUNE BRAINSTORM TECH

Despite the fact that the pandemic left most people stuck at home, not going to the office or parties, some fashion retailers experienced a significant upswing in sales. Driven by changing customer tastes and the need for online shopping, both Levi Strauss and Rent the Runway, which offers designer clothing in subscription plans, among other services, were able to meet the moment thanks to flexibility and data collection.   

As Levi’s president and CEO Chip Bergh revealed at the Fortune Brainstorm Tech conference in Half Moon Bay, Calif., this week, his company responded to the increased demand for more comfortable clothing that was still flattering. 

“There’s a new denim cycle, I think largely in part due to the pandemic, with a looser, baggier silhouette on both the men’s business and the women’s business,” he said. “The other interesting dynamic is 40% of Americans changed waist sizes during the pandemic. You know what happens when your waist size changes—you’ve got to go buy new clothes, right? So the combination of that new denim silhouette plus the waist-size change has created, I call it a ‘closet moment’ where people have to go update their wardrobe, and it’s been a real tailwind.”

At Rent the Runway, cofounder and CEO Jennifer Hyman saw a massive uptick in casual wear with a focus on flair and fun, two things that were sorely lacking during lockdown. “I’ve been in fashion now for over a decade, and what we’ve been seeing for the last nine months is unlike any other period that I’ve experienced,” she said. “The consumer has essentially made a choice that self-expression is a key element of how she wants to live, so we have seen a real coming back to fashion with a capital F, things that are more bold, more colorful.”

Rent the Runway was able to integrate this information into its partnership strategy, which involves over 750 brands. Hyman says they were able to diversify their acquisitions to quickly meet this casual demand and, in turn, provide more data on what’s working and why—or why not. 

“They’re able to make more than what they would have made if we were to buy the product wholesale,” she said. “They also get access to data that is extremely unique on how the customer fits in their clothes, how they use it, who the customer is, which has enabled many of our brands to actually change, fit, change manufacturing, target their customer differently.”

Both Rent the Runway and Levi’s also took the time during the pandemic to improve their approach to e-commerce, not just to respond to the necessity of online shopping but to improve their digital product in ways that will outlast the pandemic. 

“We created a subscription platform that was personalized to the customer, where she could now choose to upgrade how she uses us, add more slots or more items, or use less and less items, which she was certainly doing during the pandemic,” Hyman said. “The ability to personalize the subscription basically kept many of our subscribers using the product and enabled us to now have a product with double the margins that we had before the pandemic.”

Levi’s had to do much more than tweak its existing e-commerce business, which was losing money before COVID hit. The company had to invest in it, quickly and heavily. “It’s now profitable because it is scaled so quickly,” he said. “We had to build, very, very quickly, capabilities like order online, pick up curbside. Whoever heard of that before the pandemic, right? We leverage RFID as well to give us real-time store inventory. Our stores around the world, which at the early days of the pandemic were closed for 10 weeks, we turned our stores into mini distribution centers to clear inventory out of them.” 

As the pandemic wanes, Levi’s is bringing its digital capabilities to its physical locations, with a big emphasis on customization. 

“We’re really focused on personalization. The consumer clearly wants it; we’re trying to give it to them in our stores, in brick and mortar,” he said. “Almost all of our mainline stores around the world have a tailor shop now, so you can come in, buy a trucker jacket, and make it your own with chain stitching and customizing it that way. We also make that available online.

“Our loyalty program, which now has over 6 million consumers globally, [is] growing quickly, every single quarter,” he added. “We gather data on those consumers, and we’re able to tailor their experience when they come to Levi.com. So I do think that in a world of differentiation, to keep the brand strong, really being able to make each consumer’s experience a unique experience for them, that is the magic of retailing today.”

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