The Gap refuses to get in the cart
Last Sunday the NYT business section featured a full-page
article on The Gap. After years of writhing in confusion trying to be something
it wasn’t, The Gap’s senior managers appear to have regained their senses. It has a new ad campaign out, “Be Bright,”
which is light-years better than previous ones, and it is moving back to its core
business. And sales are improving. Go figure.
Yes, The Gap appears to have
woken up... but time will tell. How they
got to this point, however, should become a case study on how constant fiddling
around, following imaginary trends, and incompetent/inexperienced senior
management can destroy a well-respected and profitable brand.
In the early 2000s, after years of expansion and
acquisitions, and rivals crowding in on Gap’s clothes-for-the-masses approach,
it teetered on verge of bankruptcy. In
2007, Glenn Murphy, the head of Shoppers Drug Mart in Canada, was brought in as
CEO to turn things around. His first
task was to appease Wall Street by slashing expenses and reducing the number of
stores to increase profitability. It was
his first mistake: It wasn’t waste and too many stores costing the company
sales. As one unnamed source within Gap
said, Murphy may have had experience in grocery retail but retail clothing ain’t
like moving toothpaste.
His second mistake was surrounding himself with the wrong
people for too long. One was Patrick
Robinson, a well-known designer who had worked for the likes of Perry Ellis and
Paco Rabanne (who?). Under Robinson’s
direction, Gap tried to emulate stores like Express and Macy’s. Those clothes didn’t sell. So, he focused on women’s career
clothing. Nope. The next year it was back to the basics;
denim. Then, it was forget denim, focus
on tops. In 2010-11, when rivals were
all about bright colours, Gap had drab greys and weak pastels. Zigging when they should have been zagging.
Murphy’s third mistake was lowering quality to improve
profits. He opted for cheaper fabrics
and fewer finish options on clothing.
Granted, in 2011 cotton prices rose 20%, but the shift to cheaper
alternatives and the decline in quality led to a decline in sales and harmed
the brand. Even today, Murphy seems to
be in denial about it, as he says that there are many ways to measure
quality. Sure there are, Glenn old bean,
but a t-shirt made with fabric so thin that single-ply toilet paper feels like
steel siding beside it is not one of them.
To make up for these three errors, Murphy resorted to
discounting to drive traffic. It got so
bad that Gaps creative department couldn’t churn out 40%, 50% off signage fast
enough. He had no choice, though; it was
obvious that no one liked the styles or the quality. It all had to go, and the sooner the better.
In 2010, in a perfect example of an act of desperate panic, Gap’s
Brand president, Marka Hansen and the company’s ad agency had a brainwave on
how to turn things around. A new
logo! BOOM—the New Coke of Retail had
arrived. The blowback was immediate,
ruthless, and withering. Customers hated
it. Non-customers hated it. Ad agencies mocked it. A total pooch. Seven days later, the old logo was back. What Hansen and her agency failed to realize
is that it wasn’t the logo outside the store that kept people away—it was what
was inside.
After swift and repeated kicks in the crotch by investors for
years, Murphy took a man-sized broadsword to his management team in 2011,
decapitating five members, including Robinson (who was replaced by Art Peck)
and Hansen (replaced by Pam Wallack—who cut her teeth developing Gap Kids and
Baby Gap). Peck, who is now president of
Gap North America, acted quickly and insisted on better fabrics and a minimum
weight for t-shirts. Good move,
Art. The reason why I (and likely millions
of others) stopped going to The Gap around 2002 was because of its poor quality
and flimsy clothes. Now, if you could
bump that weight up more to, say, what Haynes’ Beefy Tees are like, I’ll start
buying them again and will gladly shell out a few bucks extra to get them. Even more if you make some with pockets. Also, please, please, please, bring back the
labels on the shirts. Those of us who
sometimes need to get dressed quickly in the dark (to go to work or go home) a
label on the back instead of those printed ones that are almost invisible in
daylight would ensure we don’t put our shirts on backwards. If it costs an extra buck, do it and I’ll pay
it.
Wallack, who is responsible for design, production and
marketing, is emphasizing bright colours, denims, khakis and knits, which are
what made Gap famous and profitable, and has a new production plant that can
ramp up and produce fashions quickly as new trends pop up. Now, Pam, if you could bring back some of
those ‘60s-style windbreakers Gap made in the ‘90s, that would be cool. (Also, don’t forget about the staff. The couple of times I used to wander in and
soon wander out during the flimsy years, the staff, while friendly and helpful,
were demoralized. I’d comment on the
clothing and they would shrug and say that’s all we sell now. As you revitalize, share the plan with
them. I believe they want to take pride
in The Gap again.)
What I hope for in future is that as The Gap turns things
around, Murphy, Peck and Walleck remember that instead of focusing tweens and
teens, keep in mind what the Ad
Contrarian, Bob Hoffman, keeps reminding advertisers and their agencies:
- People over 50 control over 75% of the financial assets of the US
- They dominate 94% of all consumer packaged goods categories
- They purchase almost 40% of consumer packaged goods
- Even in technology categories, where marketers assume young people dominate, baby boomers "are purchasing at rates just as high as other segments, and because they are often buying for their kids, many are double-dipping."
- According to Nielsen, less than 5% of advertising is aimed at them
So, Glenn, Art, and Pam, deliver what The Gap used to promise and I
won’t walk out empty-handed anymore.
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