How can you achieve new growth by discovering unexpected consumer insights?
After a year when revenue declined five percent, VF Corporation—the maker of Lee, Wrangler, Nautica, North Face, Vans and more than 20 other apparel brands—embarked on a path for new growth. The company turned to Innosight to help create a strategy to meet ambitious goals for their Jeanswear division.
In March of 2009, we kicked off a 10-month project at VF's Greensboro, N.C. headquarters by auditing current innovation practices and bottlenecks. After evaluating the existing innovation portfolio, we calculated the "growth gap," the space between the revenue that was desired and what was probable if the company's approach to innovation didn't change.
Facing declining sales, global apparel leader VF Corp. engaged with Innosight to build a new growth strategy for the company and also prove it could be implemented in one of its major lines of business.
VF's flagship Lee® brand has long defined comfort and style in jeans. But sales were lagging, with Lee dropping to #4 in market share. The Innosight team took on the challenge of helping Lee regain its edge.
Many women partial to the Lee brand were turned off by the jean shopping experience and had not updated their jeans in years. A mock commercial on Saturday Night Live poked fun at this phenomenon.
Lee needed to "turn the mom jean into the wow jean" by designing a stylish jean with a delightful fit—while making the shopping experience more satisfying and effective.
Our team spent hours in stores shopping and trying on jeans. Our ethnographic research had us visiting women in homes. We generated key insights on how to better satisfy the market of 30-to-50-year-old females.
We helped develop a way to address pain points: the Riders® By Lee® Shape System. Launched with the new Slender Stretch jeans, it helps women pick the right jeans using pictorial descriptions of body types.
From #4 to #1. The new jeans and shape system, supported by a marketing campaign led by style guru Stacy London, has helped VF increase jean sales by $100 million and catapult Lee to #1 in market share in a key demographic.
Our innovation framework helped VF model a process to create other growth capabilities. In 2011, for the first time, VF made the top 100 on the Barron's 500, based on double-digit sales gains and ROI.
Along with VF's vice president of strategy and innovation, we mapped and prioritized 44 proposed projects backed by $7 million in seed money. Then we rolled up our sleeves and got to work.
Turning the 'mom' jean into the 'wow' jean
To the Innosight team, one opportunity seemed to hold especially high potential. Two of VF's flagship brands, Lee® and Riders® by Lee, have long defined comfort and style in jeans. But sales were lagging, with Lee dropping to #4 in market share. The denim wars had heated up, with skin-tight brands taking over shelf space and winning favor. Lee needed to find a way to regain an edge.
Part of the problem was that many women partial to the Lee brand were turned off by the jean shopping experience and had not updated their jeans in years. A mock commercial on Saturday Night Live poked at this phenomenon. Sporting "Mom Jeans" with super high waists, Tina Fey, Amy Poehler and friends go about gardening and packing kids into mini-vans —while oblivious to the fact that their jeans are out of step with the times.
The innovation mandate was clear. Lee needed to "turn the mom jean into the wow jean" by designing a stylish jean with a delightful fit—while also making the overall shopping experience more satisfying and effective.
Generating insights around pain points
Using Innosight's "jobs to be done" approach—identifying an unmet or poorly understood customer need—we helped Lee generate insights into how to better satisfy the market of 30-to-50-year-old females who hold major purchasing power.
Our team spent hours in stores trying on jeans, breaking the process down into discrete steps and pain points. Through ethnographic research, we visited homes of 20 women, interviewing them while going through their closets, discovering that many didn't know how many pairs of jeans they owned.
We found a nagging perception that women still feel a need to trade style for comfort. They also felt that finding the right pair of jeans that fit well was a hit or miss process. These frustrations probably caused lost sales.
Creating a new shopping system
Innosight helped Lee develop a new concept to address these problems: the Riders By Lee Shape System. Introduced in November 2010, in conjunction with the new Riders By Lee Slender Stretch Jeans, the new system is supported by a marketing campaign led by brand ambassador and style guru Stacy London.
The new retail system helps women better identify the right jeans using pictorial descriptions of body types—from curvy to straight. The concept allows women to take fewer pairs of jeans into the fitting room and more easily find the pair that fits them at all "moments of truth"—in the fitting room, at home, at work, or running errands.
Getting growth on track
The new system helped unlock demand, with the jeans division realizing a $100 million gain in revenue and catapulting Lee to #1 in market share in this key demographic. "The payoff we received from our work with Innosight is even more profound than we had hoped for," said Joseph Dzialo, the President of VF Jeanswear.
The innovation process that led to the Shape System helped VF model a more general framework to create successful new products and systems. To support this effort, we developed a comprehensive change management and innovation training program for the entire company.
Within two years of our work, VF was on a sustained path of double-digit revenue growth across all business units. In 2011, for the first time, VF Corp. entered the top 100 on the Barron's 500, based on strong growth of sales and profits as well as return on investment. By 2014, VF moved into the top 15 on that list among all publicly traded companies in America.
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