Retail Mon, May 21, '18
Three Ways Gap Can Win Shoppers Back

 

Last month, Jeff Kirwan announced his resignation as President and CEO of the Gap. The chain had struggled with same-store sales, showing declines in 13 of the last 15 quarters. Art Peck, CEO of the retailer’s parent company, Gap Inc., noted that he was satisfied with the progress the Gap had made to regain some of its former brand health. However, the brand equity Gap has recovered has failed to translate into financial success, leading it to fall behind its sister company, Old Navy.

Gap finds itself facing the challenges that have claimed former competitors like Nordstrom’s, Macy’s, American Apparel, and The Limited: incredible competition from small and mid-sized brands, antiquated technology that can’t keep up with changing consumer demands, and a customer experience that fails to capture the hearts and minds of shoppers.

While it may seem like tough times for Gap, it’s important to remember that the brand was once a mainstay of the fashion sector - and giants like Gap always have the potential to rebound. With a plethora of retailers experiencing a renaissance, let’s take a look at three ways Gap can win shoppers back and join the resurgence.

Become a True Lifestyle Brand

In recent years, the concept of a “lifestyle brand” has matured, particularly in terms of marketing and partnerships. Gap has an opportunity to leverage its brand and still-substantial reach to insert itself into the daily lives of its customers in two key ways:

1. Reframing its offerings by use-case - it’s no longer good enough to offer generically fashionable products. Brands like Gap have to showcase their wares in a way that paints a specific vision that consumers can buy into. For example, Gap’s sister company, Athleta, has posted double-digit growth for the past two years by creating a clear and significant use case for its customers: fit and fashionable. This use case draws a focused segment of customers and ingratiates its products into a specific part of their lives, their workout routines. Instead of broad-stroke marketing like the failed “Dress Normal” campaign, Gap must determine which specific moments in a consumer’s daily life they want to become a part of and package their offerings accordingly.

2. Leverage partnerships to take marketing offline and in-life - a luxury car maker and high-end fashion designer may seem like strange bedfellows, but BMW and Louis Vuitton formed a successful partnership that helped both brands define themselves as “The Art of Travel”. Travel, the arts, and fine dining are a few examples of a shift in consumer demand that is redefining retail: the experience economy, which deprioritizes products in favor of experiences. Gap can insert itself into the experiences consumers are seeking out by partnering with businesses that provide those memorable moments, avoiding the crowded, combative digital marketing space and engaging consumers where it matters most: real life.

Personalize the Omnichannel Experience

A retailer’s best customers are worth 18x more than their average customers, yet retail marketing still dumps the most important patrons into generalized cohorts. Consumers, however, are rejecting the mass-marketing treatment and demanding that brands treat them as individuals instead of segments.

While digital retailers have collected an astonishing amount of data about online behaviors, big-box retailers like Gap have the tremendous opportunity to capture data about consumers when they’re not connected to a device. Deploying intelligent, interactive, and conversational technologies in-store can help retailers gain visibility into the entire omnichannel customer journey. This “offline” data, when combined with online data, will allow a brand like Gap to offer personalized marketing content and service online and in-store to each individual customer and quickly outflank both name brand competitors as well as smaller retailers trapped in a digital space.

In-store data is critical to personalizing the omnichannel experience. In turn, personalization turns customers into advocates, and most importantly, drives revenue and profitability. A brand like Gap - that already has international recognition and a robust network of physical stores - would be well-poised to execute on a true omnichannel strategy.

Digitize the Physical Shopping Experience

Gap has struggled with ecommerce sales, and although it’s making progress, the majority of its revenue still comes from its brick-and-mortar outlets. Its physical presence in the market presents both a significant advantage over online-only competitors and a low-hanging opportunity to redefine public image by digitizing its shopping experience in-store.

Technologies like biometrics, augmented reality, and humanoid robotics are already being deployed in physical stores, and are completely transforming the customer experience. Digital technologies are key to transforming the brick-and-mortar experience; they enable retailers to create proactive engagement through conversational UX, an interactive and multi-sensory environment, and a tailored in-store session that adapts to shopper needs and preferences. Stores that are embracing these kinds of technologies create a unique experience that stands out in the competitive retail space and have reaped the success of early adoption. Gap can employ these tools to revitalize the feel of their stores and recapture the attention of their desired audience.

The Bottom Line

Gap will celebrate its 50th birthday in 2019, and has a real chance to make it special by reclaiming its position as a retail leader. While the strategies required to reassert itself require tight coordination, they follow pragmatic logic and rely on proven forms of innovation. The technologies digitizing the physical experience not only provide a unique and differentiating shopping experience, but also enable the acquisition of invaluable offline customer data. This data allows for the full personalization of the omnichannel experience, and better enables companies like Gap to achieve the goal of every retailer: to become a truly lifestyle brand.

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