Background of GAP
GAP is an American clothing and accessories retailer based in San Francisco, California. It is a part of the group with the same namesake ‘The GAP, Inc’. It was founded in 1969 as a single store by Donald G. Fisher and wife Doris. The store's merchandise consisted of Levi's and “Long Playing” records; later they came up with their own private label in 1974.
The GAP, Inc today is one of the world's largest specialty retailers, with approximately 3,100 stores and fiscal 2009 revenues of $14.2 billion. They achieved this by slashing costs and improving the margins. Gap, Inc. has more than 135,000 employees and operates over 3,465 stores worldwide. Stores in Canada, France, Ireland, Japan, UK, and US (and Puerto Rico) are company-owned stores. Stores outside of these countries are owned and operated by franchisees.
GAP Inc. operates five of the most recognized apparel brands in the world. These are:
· Gap
· Banana Republic
· Old Navy
· Piperlime
· Athleta
Culture at GAP: The culture at GAP helps us understand why the brand is such a huge success. It mainly emphasizes on keeping its customers first and it continuously works on quality of its clothes to meet customer’s expectations. It always looks for different ideas and new ways of working, inspiring creativity. GAP works with integrity and believes in giving back to the Society. It meets all its goals by taking responsibilities and setting priorities.
Chronological evolution of GAP:
· 1969: Opens the first store on Ocean Avenue in San Francisco
· 1970: Sales reach $2 million. Second store opens in San Jose, Calif.
· 1974: First private label store opened. Launches "Fall into the Gap" campaign
· 1976: Gap goes public offering 1.2 million shares of stock on the NYSE
· 1986: The first GapKids store opens in San Mateo, Calif.
· 1987: The first GAP store outside the United States opens in London, England
· 1990: The babyGap line is born, debuting in the GapKids store in San Francisco, Calif
· 1992: Gap becomes the second-largest selling apparel brand in the world.
· 1997: Gap opens its Online Store at gap.com
· 2000: Gap launches its Gap Maternity on Gap.com
· 2006: Gap stores open new franchisee stores in Malaysia, Singapore, UAE
· 2009: Gap, Inc co-founder and board member Donald Fischer dies at the age of 81
Strategy employed to enter UAE:
Gap Inc. announced a franchise agreement with leading retailer, Al Tayer Group, to introduce into five key markets in the Middle East. Al Tayer Group plans to open about 25 Gap stores by 2010. The first Gap stores opened in the later part of 2006.
Marketing Strategy (and Target Customers) of GAP
GAP tries to market itself as a brand for young people with middle level incomes and focus only on casual wears. In promoting their brand, they intend to use both traditional medium like print media, billboards and non-traditional media like internet. They also intend to keep growing in the international markets. Also, it has regularly used Hollywood celebrities to market itself.
Their segmentation, target market selection, positioning is as follows:
· Segmentation: GAP follows various segmentations like geographic segmentation like place where the store is located, demographic segmentation like gender, age and behavioral segmentation like what kind of clothes people prefer.
· Target Market Selection: Out of the above segments, GAP has chosen to focus on men, women of younger generation who like to wear casual wears and have also started a store for kids. They target those customers who want good quality but affordable clothes.
· Positioning: They have positioned themselves as a brand with fashionable clothes for the middle income segment (affordable) young customers in the smart and business casual wears category.
GAP – Competitive intelligence
To identify the competitive intelligence of GAP, we identified the following main clothing retail brands. We went to their stores and made the observations as detailed below:
1. Aeropostale: is an American clothing retail chain that mostly sells casual clothing with over 900 stores in the United States, Canada, Puerto Rico and the United Arab Emirates. Their stores are usually located in shopping malls and large marketing areas. They have recently launched a line for kids also. We made the following observations about their store:
· They do not have a kid’s section
· The space utilization was not done properly. The store looked very congested
· Aesthetic sense was not good
· There were lot of varieties in design
· The clothes were mostly affordable
· Lot of bright colored clothes were available ( as compared to GAP)
· Sale sign was prominently visible
· Location of store was not that good as compared to GAP. It was on the first floor corner side of Dubai mall
· They were doing lot of advertisements in the mall itself to increase awareness of their sales
· Out of Zara, GAP and them, their service was the best as customer service representatives were pro-active and approached the customers themselves without asking
2. ZARA: Zara is the flagship chain store of Inditex Group owned by Spanish tycoon Amancio Ortega. The group is headquartered in Galicia, Spain. Their USP is that they need just 2 weeks to develop a new product whereas the industry average of 6 months. Its most unusual strategy is its policy of almost zero advertising. We made the following observations about their store:
· Sale sign was not prominent
· There were 3 sections – Men’s section, Female’s section and Kid’s section
· Prices are comparatively higher
· They were trying to cross-sell by putting shoes, pants and shoes at one place
· Their customer care representatives were not pro-active
3. H&M: H&M offers fashion and quality at the best price through a broad and varied range of fashion. The collections are extensive and replenished within a day. Hence, customers can always find something new at H&M. It is a Swedish clothing company and cater to the following segment - women, men, teenagers and children. It has around 2,000 stores in 37 different countries and employs around 76,000 people. Observations about their store are:
· Display of clothes through main windows was prominent
· Arrangement of clothes in H&M was very systematic
· Clothes on sale were not segregated and were mixed with fresh arrivals
Services
Following are few of the prime intangible services that we identified in the mystery shopping exercise:
1. Return policy: GAP accepts unwashed, unworn or defective merchandise at any GAP store locations in the UAE, Kuwait, Bahrain, Qatar and Oman within 14 days of purchase date. Either payback or Customers will have choice of exchange as well.
2. Customers were provided the facility to pay either in cash or through card also.
3. Attendants were customer friendly. Though they did not express any proactive behavior in helping customers, but they are available on call throughout the store. Most important thing to be noticed is that cash counter attendants helped the customers by taking floor attendants position also.
Observations
Our mystery shopping yielded a number of key observations on GAP, as listed below:
· Prime location: Just way ahead of the main entrance to the mall, near the land mark aquarium which everyone would visit.
· 25% to 40% SALE board visible from entrance, aquarium, stairs and first floor also.
· On entering the shop, segregated men and women sections. Kids Section was internally connected and also had a separate entry.
· Only casual wears and no formal wears in all the sections.
· Shopping bags were not available.
· Very few bright colored clothes were there. Most of the clothes on the rack space contained dull colored dresses and was not visible properly to the people walk by.
· Racks and tables were spread all over the floor which caused hindrance to free movement of customers within the shop. Space utilization was not effective.
· Unnecessary replication of same design and pattern of clothes in the rack space.
· The clothes under sale were kept in on a separate table with sale board. The clothes which were not on sale were kept mostly on racks and shelves.
· Cash counters placed at the centre of the shop.
· Optimum lighting in the entire store.
· Sizes of few types of apparel were not available. Also, rack spaces were left empty in between.
· Floor attendants were found idle and chatting with each other. They responded only on call.
· Company has launched premium series of jeans called 1969 which did not click in the market. These jeans were not kept at the entrance. They were kept in the interior section of the stores.
· Men section contained male attendants and Female attendants in female and kids section. This is applicable for cash counter as well. This provided comfort to the customers choosing any kind of garments.
· “Made in XXX” tag was prominently displayed on the back side of the clothes.
· Product prices are targeted for middle income segment customers.
Recommendations
Based on our GAP mystery shopping experience we would make the following recommendations to GAP for them to make a lasting impression on the customers:
1. GAP can offer Membership Cards to retain customers and to create customer loyalty.
2. Shopping bags can be provided in the shops to make the whole shopping experience more comfortable as currently people have to carry all the selected clothes
3. Should offer a wider range of designs and vibrant color offerings.
4. Store space utilization can be improved to provide free space for movement of the customers
5. Sales attendants can be trained to be more proactive in helping the customers rather than waiting for a call from customers.
6. Advertisement can be improved as the store is offering an ongoing sale through bill boards and pamphlets etc as done by its competitors.
References:
1. http://en.wikipedia.org/wiki/Gap_(clothing_retailer)
3. http://en.wikipedia.org/wiki/Zara_(clothing)
No comments:
Post a Comment