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GAP's Rodney Dangerfield moment - just can't get no digital respect!

Stuart Lauchlan Profile picture for user slauchlan August 17, 2017
What's an online retailer got to do to get some respect these days? GAP CEO Art Peck feels the recognition isn't there that his firm deserves.


I often see us referred to as a ‘mall-based apparel retailer’. I think that's one dimensional probably at best, but really, it's just flat out wrong.

A telling statement from Art Peck, CEO at GAP, indicative that he doesn’t feel that the firm’s “very robust, very profitable online and mobile business” is getting the respect and recognition that he feels it deserves.

GAP is, according to Peck, “meeting our customers exactly where they are”, insisting that the retailer has been in the omni-channel game for a long, long time and can claim to be “one of the largest retail apparel e-commerce businesses in the world”. He says:

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. I'm not aware of any of our competitive companies that have multiple brands that offer a single cart shopping experience, and we know that this matters for our customers.

Continuing to power our omni transformation, we've added capabilities such as Reserve in Store, Find in Store, Ship from Store, Order in Store, some as much as five years ago, and we'll be testing a new buy online, pick up in store program this next quarter. We aren't behind. We're ahead, and we are accelerating.

Based on these decades of experience, Peck adds, GAP has a “a world-class e-commerce approach to this business”. He explains:

Running a great digital e-commerce business and mobile business is about many things. The wonderful thing about it is that, because it's clean, you can put things into work, whether it's product recommendations, whether it's site speed, et cetera, A/B test, A/B placement test, A/B test video, et cetera, et cetera, and be very rapid and innovate very rapidly.

There's a whole bunch of things in work right now. I mentioned some of the customer facing capabilities, which have continued to be important for us. But the bulk of it is really about making sure that you've got an easy shopping experience that the customer can click through cleanly, where it's easy to check out, et cetera. If I go to mobile, everybody on mobile needs to continue to figure out how to effectively monetize that traffic, and that's what we continue to work on.

To that end:

We iterate, we A/B test. We run dozens of tests each month, things like new online product recommendations where we have just inserted a world-class product engine into the mix of our capabilities.

Mobile innovation

Expanded mobile Point of Sales (POS) functionality is cited as an example of the sort of innovation that is being overlooked:

We've added new capabilities with our native mobile apps. On the mobile POS, we've deployed mobile point-of-sale devices in more than 900 North American stores so far, and we've accelerated the mobile point of sale. We're seeing higher conversion rates, larger basket sizes and higher overall satisfaction scores and loyalty increases. This is because it offers both convenience as well as a different way of engaging our sales associates on the floor of our stores. And most importantly, a cross-brand, cross-channel customer is extraordinarily valuable to us as a company.

On the mobile front, there’s still work to do:

Getting to a native app experience on our apps has been a big step forward. It's faster. It's easier. It's cleaner. It's more intuitive for our consumer. But there's going to continue to be work as to how do we build big baskets around our mobile shoppers, and we believe that it will continue to be a place where our customers go to at the end of the day. We're seeing traffic grow. We're seeing our e-mail acquisitions grow. We're seeing our SMS list grow, to be able to feed that business, and then it's about really delivering a low-friction, high-touch experience in the digital world.

GAP is also tapping increasingly into customer data analytics and monetisation:

We're in the early days of turning this data into dollars, which allows us to build meaningful experiences with our customers. The highest portion of our revenue is driven by customers who shop with us across multiple channels and multiple brands. We're focused on testing new capabilities that will encourage repeat visits across all channels and all brands. And to grow our known customer base and build more meaningful relationships, we are piloting as we speak in multi-tender loyalty program in Old Navy, which will provide customers with benefits to shop with us, a more personalized experience even if they're not currently a credit card holder with one of our credit cards, which is where our current loyalty program resides.

As with any other retailer today, there is the question of Amazon and its potential threat to revenues. GAP has done partnerships with other online marketplace providers in other parts of the world, most notably T-Mall in China, for example. But for now at least, the intention appears to be to try to keep GAP and its various brands e-commerce activity in-house. Peck says:

I've been open in saying that we will always be where our customer is, and so we are not close minded in making sure that because, first and foremost, we are a fashion apparel company, and people come to us to buy clothing. As to something on Amazon, I just really don't want to comment right now…At the moment, we're staying the course, and we're focused on delivering an exceptional brand experience, whether it's digital, in our stores or the combination of the two.

My take

There’s a note of Rodney Dangerfield complaining he can’t get no respect in some of these remarks from Peck. That said, since the closure of Banana Republic’s international branches, I’ve used its e-commerce platform a lot and, in the main, found the experience to be a superior one, so maybe he has a point. Away from that, there are signs that a turnaround is finally delivering, with profits and revenues up in 2017 so far. That said, it’s still Old Navy that’s doing most of the heavy lifting, with work still needed on GAP and Banana Republic.

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