By Stephanie Crets
Due to low sales, 175 underperforming Gap stores are closing across North America, along with the chain eliminating more than 250 corporate jobs. Store sales have been in decline for the past five quarters and this action is an attempt to save and revive the leftover stores. Once these stores are closed, Gap will be left with 500 regular retail stores and 300 retail outlets. And it projects to be saving $25 million by 2016.
But what Gap really needs to save is its brand.
With the retail industry evolving so quickly, retail stores have to keep up with the changing trends in innovation, relevance and consumer preferences. Shoppers no longer look for brand recognition; they want the latest and greatest. And also the item that gives them the most value in the long run.
“While 10-plus years ago, consumers were satisfied to purchase a gray polo or t-shirt with a brand-name logo, today’s consumer is looking for original designs that set them apart from the person next to them on the sidewalk,” says Andrew Billings, senior retail manager at consulting firm North Highland Company. “As a result, retailers are having to focus more energy on creating truly new and differentiated designs. Where many brands carry over a significant portion of their product line from year to year, today’s leaders have recognized the importance of presenting the consumer with updated products that capture the latest trends while still building on the brand identity.”
Staying relevant in the industry seems to be Gap’s biggest issue. Stores like H&M, Forever21 and Target all carry jeans and khaki pants these days, which are Gap’s staple in the clothing retail industry. Most of those stores’ merchandise is updated on a constantly revolving basis , while also being extremely low priced. This includes Gap’s sister store, Old Navy, which is succeeding where Gap isn’t. So, how can Gap differentiate itself from the pack?
“As multichannel customer interactions increase, retailers must create seamless customer transactions across those channels,” Billings tells RM. “The fashion consumer now begins her shopping journey on Facebook, Pinterest and other social media sites, first engaging with a product or brand outside of the store. … Many retailers still fall short of creating the seamless cross-channel experience.”
Gap needs to get creative and start utilizing the vast social channels the Internet has to offer. It’s not enough to be known for a specific product anymore; if you’re not updating it and reinventing what you have to offer, consumers will be more likely to find a retailer that has something new and unique on a consistent basis. This lack of innovation could be due to the fact that Gap’s chief creative director left the company this past January and has yet to be replaced.
“The consumer is more demanding than ever, and smarter,” Billings says. “Unlike the high-tech industry, consumers have realized that longevity and history do not necessarily translate into quality and value in apparel. And given the shrinking average closet life of fashion apparel products, style-conscious consumers are prioritizing design creativity and taking more risk with their purchases.”
Perhaps a new creative strategy, including the digital market, can breathe some life into Gap. Otherwise, we might be hearing about some more store closings in the coming years.