Where Wearable Tech Is Headed -- WSJ

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 24, 2017).

Chip Bergh, Levi Strauss's CEO, says the company wants to see what new functions consumers want. But the possibilities are endless.

Levi Strauss & Co. has 164 years of history behind it -- and the challenge of remaining competitive in the digital age ahead of it. The company is addressing that challenge in part by using big data to better understand its customers and cater to them. But it's also taking a higher-profile tack with cutting-edge wearable technology, an internet-connected jacket it developed with Alphabet Inc.'s Google unit.

The Wall Street Journal's deputy technology editor, Christina Passariello, sat down with Chip Bergh, Levi's president and chief executive, to discuss high-tech clothing, the blending of Levi's and Google's work cultures, and the pros and cons of working with Amazon.com Inc. Edited excerpts follow.

Wearing the internet

MS. PASSARIELLO: Levi's just unveiled its first connected item of clothing, this $350 jacket that you're wearing. How are consumers starting to use it?

MR. BERGH: We have a line of product called Commuter, which really is for bike riders. It's a little bit niche, but getting more mainstream. So we decided to use the Commuter line. This allows cyclists to get directions, listen to their music, change their playlist without ever needing to look at their phone.

MS. PASSARIELLO: How do you see the use of the product evolving?

MR. BERGH: Where this specific product goes and how much more functionality we build into this is one question. The other big question is where does wearable technology go?

Right now devices kind of control our life, and the picture for the future is that technology is embedded in our life, into the clothing that we wear, perhaps into the sheets in our bed at home, and anything that's a fabric will be able to have conductive fiber in it that can do just about anything.

MS. PASSARIELLO: Do you plan to roll this fabric out across many other products in your lineup?

MR. BERGH: Yeah. We have a lot to learn from the consumer. What other kinds of functionality do they want built into this? And then we'll go there. We're already working with Google on 2.0.

MS. PASSARIELLO: What do you have in mind already for 2.0?

MR. BERGH: If you think about all the different ways or times you need to take your phone out to use an app, imagine replacing more of that. Scroll through your phone and look at the apps and say, "Do I really need to look at the screen for this?" And if not, if I can control it with a swipe, it's something that we're going to be able to build in from a functionality standpoint.

Learning from Google

MS. PASSARIELLO: Tell us about working with Google. Different cultures. What's it like to go through this innovation process with them?

MR. BERGH: We're perfectionists. Everything we sell has got to have quality embedded in it. It's got to be perfect before we launch something. When we launch a new fit, the team travels around the world to make sure it fits all the different body types around the world.

We really focus on perfection and really failure is not an option. Google embraces mistakes.

We had one instance where the sleeve actually caught fire. That's not a good thing for a consumer, right? But they loved it. They were like, "That gives us a problem to solve." And so it was two very, very different cultures coming together trying to solve a common problem. And I think we learned a lot from it. We're now embracing failure a lot more readily, willing to fail fast, fail early, but just keep moving forward because there's no such thing as a real failure. It's just an opportunity to learn.

Working with Amazon

MS. PASSARIELLO: You've had an official supplier relationship between Levi's and Amazon for several years. What do you gain from having Amazon as an official supplier?

MR. BERGH: They've got enormous scale in the online space. They attract the most eyeballs for consumers who are shopping.

We do have our own website. We do work with our other wholesale customers like Macy's, like J.C. Penney, like Kohl's on their e-commerce sites.

We're trying to innovate in the e-commerce space, so we just launched a chat bot that is a virtual stylist. If you go to levi.com, you can experience that.

As we develop these capabilities and prove them out, we're willing to share them with all of our online partners. But Amazon's one of our biggest customers globally. They're one of our fastest-growing customers.

MS. PASSARIELLO: Amazon gathers a lot of information about how Levi sells. Do you get access to that data?

MR. BERGH: Some of it. I'm sure we don't get all of it. But we try to have a productive working relationship, and not just with Amazon here in the U.S. I met with Alibaba this morning. We're working with Wal-Mart as well. All of these e-commerce players are collecting a lot of data, and I think we can partner together to do a better job of targeting consumers.

MS. PASSARIELLO: Amazon has launched a lot of its own lines to compete with others, and now they have all this data about how well they sell your product. When do you expect them to go head-to-head with you with their own denim line?

MR. BERGH: I would be the first to argue that they shouldn't go there, but a lot of our customers have their own private label and we've been dealing with this for 30 years. I don't want to say it's inevitable, because they're really happy with our business and they've got other brands as well. But if they launch a private label, competition's a good thing. It will make us take our game up to the next level.

(END) Dow Jones Newswires

October 24, 2017 02:47 ET (06:47 GMT)