Gap Reimagines Its Roots and Gains Greater Brand Loyalty

Gap has been a well-known name in the retail world for several decades, but the clothing store might have lost a bit of its luster in recent years. However, it appears that the venerable marketer is making big strides in various areas that have sparked greater brand loyalty.
“I love how Gap has reimagined its roots with fun and unique designer collaborations,” Meg Tronquet, Manager of Marketing Strategy for Lenati, told Loyalty360. “Gap has always been a brand that has been focused on quality basics—jeans, tees, jackets—but for a while the collections were just plain boring; the same jeans in the same washed, with the same tees, with the same cuts. Shoppers didn’t have a reason to come back because nothing changed. With their new designer collaborations, they do.
“While by no means a new concept for the retailer, Gap is working with designers who share their same principles for quality, everyday clothes, but adding unique, subtle details that keep each collection fresh and unique—and keep shoppers coming back. Plus, they’re including menswear with designers like Alexandre Mattiussi and United Arrows & Sons. Add SJP into the mix for the women and kid’s spring collection, and Gap seems to be embracing its new and improved identity nicely. While I haven’t seen any financials that speak to this, anecdotally I know the checkout lines are longer.”
During the company’s fourth-quarter earnings call in early March, CEO Art Peck was optimistic about the company’s recent fiscal results.
“We are growing value in active, beginning with Old Navy,” Peck said. “During fiscal year 2017, Old Navy grew 6 percent and surpassed $7.2 billion in sales. Old Navy is the fastest-growing major apparel brand in the U.S. among major retailers. The brand continues to win by focusing on loyalty categories, delivering on assortment with clear filters focused on fit, quality and value, and I have to point out that more than half of Old Navy’s assortments sits on our responsive capabilities, allowing us to feed units into the business, minimizing risk and maximizing margin, and successfully chasing market share opportunities.”
Peck cited the tremendous performance of Athleta.
“Notably, Athleta moved from mid-teens sales growth in the first half of 2017 to mid-20s in the back half of the year,” he said. “The response and engagement we’re seeing from new and existing customers at Athleta has been outstanding, driven by the highest percentage of product and responses in our portfolio, exceptional product, powerful storytelling, and a unique experience both inside and outside of our stores. In 2017, new fabric information, much of it proprietary to the brands, drove a significant amount of top-line performance.”
What’s more, Peck noted the company’s online and digital businesses.
“We set a goal publicly for this business to reach $3 billion in 2017, and I’m pleased to report that we exceeded that goal by over $100 million,” Peck said. “Capping a year of sequential quarterly growth, we closed out the fourth quarter with nearly 30-percent growth of our digital and online businesses. This is a great year for our highest growth and highest return business.”
Jon Siegal, VP and General Manager at Stellar Loyalty, told Loyalty360 that the retail brands seeing success today recognize that discounts and sales aren’t enough to compete with the online aggregators and discounters such as Amazon and Walmart.
“Instead, to thrive in this new environment, they must create authentic 1-to-1 connections with each of their guests before, during, and after the transaction to win their loyalty,” Siegal said. “To do this requires digital innovation, just as GAP, VANS, and other leading retail brands have been executing. The first step is creating a single, unified digital database of customers, and every interaction they have with the brand. Then using this digital database, the brand can create authentic, timely, and engaging experiences that cater to each consumer.”

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