'People want to go to the physical stores': Levi's Rui Carlos Da Silva Araujo on the brand's Latin America DTC strategy

Levi's Latin American business is growing -- but it's very different from its Northern counterparts.

The apparel brand's svp and managing director of Latin America, Rui Carlos Da Silva Araujo, spoke on the Modern Retail Podcast about how the company approaches this part of the business -- and its overall approach to DTC. This episode was recorded live at the Modern Retail DTC Summit held in Miami. Levi's Latin American business grew by about 70% in the first quarter of fiscal year 2022, and Araujo said the company plans to continue growing and opening more stores.

While the brand's digital business is continuing to grow, Araujo said stores remain one of the most important sales channels. "We see this opportunity still in Latin America that people want to go to the physical stores," he said.

Currently, Levi's has 400 stores in the Latin American region, and the company is in the midst of an overhaul of its entire experience. It recently unveiled its Indigo store concept, which Araujo described as a way to showcase Levi's as lifestyle brand. It features fewer products and more experiences, such as in-store tailor shops. "The stores are really happier, the product is different," Araujo said. He hopes to have 50% of the Latin American stores to feature the Indigo model within the next two years.

But no one store is the same. That's because Levi's customers are different not only between regions, but also between countries. Latin American customers, he said, "are much more European-driven -- south European, like Spain in Italy -- much more than the U.S. in some countries in Latin America. So the Colombians, the Argentinians and the Brazilians, they are really, really fashionable."

Even with the emphasis on stores, Levi's is still focusing a great deal on digital. It has its own DTC sites for all the countries it serves, but local marketplaces like Mercado Libre also play a big role. "You need to have your mark, you have your own sites," he said. "But you need to have your marketplace players there."

Even so, a big focus for Levi's right now is thinking about new retail concepts that customers will want to hang out in. Said Araujo, "we are seeing this momentum and the physical retail is working for us. So I think that's a huge opportunity."