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BADM 420
Gap
Gap has gone through many changes since the time of its highest popularity and the case
goes over quite a few of them. The first major problem that Gap faces has to do with whether
big data should be a replacement for having a more traditional design process through the use of
creative directors. And the second major problem is whether Gap should shift and partner with
Amazon to sell Gap branded products through there, which would mean possibly allowing
Amazon to dictate the flow of their goods.
Let’s breakdown the first problem. Gap had slow growth in their core markets and had to
face extremely high competition in their industries. From things like fast fashion, social media,
and discount stores, Gap lost their footing in the clothing space. Peck’s idea was to bring in big
data to understand his consumers, rather than have creative directors lead the decisions. He
wanted to use predictive analytics and create a collaborative team between data and design so
that Gap could continue to gear their products to consumers. I completely agree that this was the
right move to do, because of a few reasons. The first one comes from exhibit 3, which depicts
where exactly Gap is on the competitive landscape. They are shown to be right in the middle of
all the brands listed, because they don’t have a group of customers they are going after, or a style
of selling, or anything that could make them a differentiator in the fashion industry. So, to solve
that problem, I recommend that Gap sticks to what Peck is doing so that they are able to
understand consumer trends and create clothes as necessary. Gap should know that customers
differ and that trying to market their clothes to everyone without a strategy is a lost cause in the
digital age. Customers could change the types of clothing they want because of many reasons
like environmental changes or life events. The key thing here is that by using big data and
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consumer history, Gap will be able to gear clothing to customers that people are going to want at
a specific time. People’s preferences are going to be changing and if Gap is selling generic
clothing to all types of people, no one is going to buy it. In the end, Gap has two choices on
where to go from this direction. They could become closer to a brand like Zara or H&M, selling
trendier and bolder designs, or they could become closer to Levi’s where they are more classic.
Since they already have Banana Republic and Old Navy targeting different customers based on
pricing, Gap should decide to target customers based on how trendy or classic they make their
clothing.
Let’s breakdown the second problem. Gap has a few choices when it comes to using ecommerce: they could partner with Amazon, create their own digital presence, or continue to sell
through retail stores mainly. First off, I think that Gap needs to have some sort of e-commerce
presence, because as we learned in class, customers change. The change in this case is a shift to
convenience rather than spending time shopping in person, and this means that Gap should be
following what customers want. Now that we’ve established that they must have an e-commerce
presence, we must understand what kind of e-commerce presence suits Gap the best. Because
Gap aims to be a larger clothing store with a larger variety of products, unlike for example
Patagonia, they should be using market intelligence figure out what types of clothing are
trending and need to be sold. With that, I recommend that Gap both becomes a third-party seller
on Amazon and has its own e-commerce website as well. I recommend using Amazon because
what they can bring is a whole new audience to sell their apparel to, especially to customers who
only shop on sites like Amazon. Also, with shopping on Amazon will yield plenty of data to
study to help Gap become a leader in market intelligence. The reason why I recommend
continuing to do their own website e-commerce is because Gap must maintain a brand image,
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and while that gets lost on Amazon, I believe there are two types of differing customers that Gap
should focus on for online sales. One is the group of customers that will buy things not based on
the brand, and the other are potentially loyal Gap customers who buy because it is Gap. The
second type of customer is the one that Gap should target to get them to subscribe to emails, give
discounts to that are only used on Gap’s website, and overall promote the brand. With both ecommerce strategies running and a proper brand identity, I believe Gap can place itself once
again among the best of the highly competitive clothing industry.
One of the lessons that I learned is that if Gap had kept up with what their competitors
were doing, or other industry leaders or new companies, they would have realized that their old
business models were not going to work sooner. So, as a marketing student, I learned that you
must always keep tabs on your competition within the industry so that you don’t fall behind on
customer changes and trends. Another lesson I learned is that while creativity is important to
many companies, sometimes the customer base isn’t going to care about the creativity. For
example, at Levi, clothing is generally classic, and we don’t know about individual designers,
but as a result their clothing can appeal to many people. A different brand would be someone like
Gucci, where they have specific designers with very creative designs, but charge exorbitant
prices. This is something that customers have come to expect with specific designer brands, and I
believe that Gap should stay away from that. Creativity should be the main focus for many
brands, but for general, usually larger, brands, creativity should come after market intelligence
because of the large number of customers a brand is catering too.