Richard Dickson started his new job as CEO of GAP last week, choosing 22 August as his first day for a reason - that was the date that the iconic US retailer was founded back in 1969.
A lot has happened since then, but in recent years the company and its various brands has been a long-running troubled omni-channel retail saga that shows no signs of improvement.
There’s a lot for the new CEO to deal with as he takes to the hot seat. Three days into his tenure, the iconic US firm turned in quarterly numbers that saw net sales down eight percent year-on-year. In-store sales were down seven percent, while online fell 11%, now making up a third of overall sales.
It’s only a few years since then-CEO Art Peck was boasting about the retailer’s technological prowess, comparing it to other firms headquartered in the Bay Area:
I sit here on the Bay Area surrounded by 'New Economy' companies whose entire business model is data. They know that data is a scalable asset and the more that you have, the more value you can extract. Because of our size and our scale, we have an immensely valuable data asset that we're just beginning to exploit…We were early movers in the digital space, launching e-commerce more than two decades ago. More than a decade ago, we saw the power of our brands together and quickly migrated to one platform where our customers could cross shop all of our brands with one easy checkout.
Peck’s successor was Sonia Syngal, who was noted at the time for her stewardship of GAP’s Old Navy brand and the development of its online capabilities. She talked up the idea of “digital sunshine” - nope, no idea either! - as well furthering Peck’s data playbook:
It's an enviable customer file that we intend to capitalize on. Those are really the top three assets we see, our powerful brands, our customer file and our omni capabilities. Those three together, enabled through our lean operations and our values, which values matter today more than ever are going to be the elements that shape and refashion this company and how that plays out.
So what can we expect from Dickson? He comes to GAP from toy company Mattell, where he has been widely credited with reviving the Barbie franchise. He has also had fashion experience, with roles at Bloomingdale’s and The Jones Group, and has online credentials, having co-founded digital cosmetic retailer Gloss.com, later sold to Estee Lauder.
What is striking in his initial comments as CEO last week is the lack of emphasis on technology and data as he drilled down on brand revival:
I’ve always been drawn to companies and brands with storied legacies and powerful purposes. And in apparel, there’s no equal to Gap Inc. When Don and Doris Fisher opened the very first Gap store in San Francisco in 1969, little did they know, that they had tapped into the zeitgeist in a way that would democratize and define American style. Suddenly, great clothes were accessible, stores were experiential, self-expression could be an everyday pursuit, open to all. Talk about a game changer, Gap did that. Creating an opportunity from the currents of culture has been a hallmark of Gap Inc. for more than 5 decades.
Over the years, our brands made jeans, khakis, kidswear, suits, yoga pants, you name it, into massive trends through great design, great marketing and an all-out obsession with our customer.
Fast forward to today. The apparel and retail landscape has changed dramatically, evolving at an even quicker pace now it requires that great brands run at the speed of culture to maintain relevance. What has not changed is the customer’s desire for fashion they can make their own. We will take that one step further, making what we do, what we stand for, and what we sell, relevant. As anyone in this industry will tell you, clothing is a rational need, while fashion is an emotional want. Our brands will balance both.
Those brands currently pull in 600 million visits a year to stores, and 1.4 billion online, making GAP the number two player in US apparel e-commerce. That means those brands matter, argues Dickson, but they can matter more:
When you have brands that matter, they could be monetized. That being said, you have to make these brands matter more that has to have great product, great marketing, great execution, and we really need to understand and be obsessed with our customer. I think that we have elements of it, but where we’re going to really work very, very diligently on is creating meaningful differences in the context of our brands and making these brands matter more.
When you look at our stores, they need to reflect, if you will, the right narrative in the context of product statements that we believe are heroic, products that we believe will matter to our consumers, the right balance between basics and fashion and an experience where details really come across to create an experience that consumers will talk about, want to return to and ultimately find, if you will, the value and quality and product experiences that are required today for brands that win.
That’s what you’re going to see us work much more diligently on as transformations go, these things take time. But we will start to test and roll and really learn essentially what works and what doesn’t in a more accelerated way so that we could do more of what works and do less of what doesn’t, lots more to come with lots more examples, and we’ll share those as they evolve.
The problem here is that we’ve heard all this before, for years and years, and still it’s ‘jam tomorrow’. Maybe that’s unfair given that Dickson is only a few days into his new role, but he has been sitting on the GAP board of directors since late 2022, so he’s presumably had a ringside seat in terms of the retailer’s problems. But for now, it’s more of the same:
Restructuring is challenging. That change of this magnitude doesn’t come fast. Transformation is difficult.
Yada yada yada.
There will, I imagine, be more detail to come in the next few months, but for now, what comes next in terms of omni-channel overhaul is all rather vague and aspirational - “We’re going to keep on going” - with a promise of getting it right this time around:
This time, we’ll do it differently with a clear focus on brand revitalization, redefining our brands meaning to consumers, focusing on creativity designing for relevance as a pursuit rather than a goal, building to quality and leveraging our remarkable legacy to shape an exciting new future.
We shall see. But the gap between aspiration and achievement is a wide one...