Gap Inc. Is Transforming into a Digital First Retailer
Many industries are now seeing the benefits of going all in on their ecommerce platforms - especially in the wake of the COVID-19 crisis.
Even before terms like "coronavirus" and "global pandemic" became household words, the high street was suffering. For brick-and-mortar retailers, competing with the price and convenience of online shopping was proving a significant challenge.
However, despite there being many ecommerce fashion brands out there, the clothing industry seems to be faring better than most. The uncertainty of ordering clothes online without being able to try them on first was keeping many physical retailers relevant - even in the digital age.
Online retail has been mounting a pushback, however. With returns being more convenient than ever, and ecommerce clothing brands offering better and better services, even the most obstinate high street devotees are starting to lose faith.
GAP
Founded in the late sixties, fashion legend GAP has seen many trends come and go - and one of the most significant has been the digital revolution.
While, up until now, GAP has retained its network of physical stores, it has seen significant growth in its online sales. In the last year, it saw a 54% increase in ecommerce sales. Its online sales came to a staggering $6 billion, which accounted for nearly half (45%) of its total sales for the period.
"We faced one of the most difficult years in our company's history and, throughout, our teams showed resilience and determination as we navigated unprecedented disruption in our industry to set a course for long-term growth," said Sonia Syngal, CEO of Gap Inc. "Our powerful brands moved to offence with purpose-led marketing and strength, allowing us to gain meaningful market share quarter-over-quarter in a fragmented environment."
This growth has led GAP to seriously reconsider its position in the retail market and motivated the clothing giant to refocus into a digital-first strategy moving forwards. One way it's achieving this is through a partnership with AI disruptor TrueFit. With TrueFit's technology, GAP can use algorithms to recommend sizes with a greater degree of accuracy than ever before. This reduces the frustration which arises from receiving clothes which don't fit and the need for costly - both in terms of time and money - returns.
Building on this, GAP has also recently acquired virtual changing room startup Drapr. With Drapr's technology, customers can create a custom avatar based on their own size and body type and use it to virtually try on clothing. Not only will this give them a better idea of how the clothes will look on their own body - rather than on a model whose body-type may in no way resemble the customer's - but will, like with TrueFit, further reduce the likelihood of returns.
"Most people either don't know their exact measurements or are looking for a specific type of fit that numbers alone can't tell them," said Drapr Cofounder and CEO, David Pastewka. "Drapr has proven effective, and we are excited about the impact we can have on customers at scale as part of the Gap Inc. family."
"Fit is the number one point of friction for customers," added Gap Chief Growth Transformation Officer, Sally Gilligan. "Through their advanced 3D technology, Drapr has shown it can help shoppers efficiently find the size and fit they need. We plan to leverage Drapr to help Gap Inc. improve the fit experience for our customers and accelerate our ongoing digital transformation."
Digital Only
All this effort into ecommerce shopping and digital experiences has led GAP to make the tough decision to close all its UK stores and pour its efforts exclusively into online shopping.
The move will see 81 locations across the UK and Ireland close by the end of 2021 and follows a slew of high street closures of big-name brands including Topshop, Debenhams, Oasis, Warehouse, Karen Millen, Laura Ashley, Marks & Spencer, Next, House of Fraser and John Lewis. However, GAP is positive about the move and believes its transformation into a digital-only brand (at least in the UK) will enable it to provide customers with even better experiences than before.
"In the United Kingdom and Europe, we are going to maintain our GAP online business," said GAP in a press release. "The ecommerce business continues to grow, and we want to meet our customers where they are shopping. We're becoming a digital-first business and we're looking for partners to help drive our online business forwards."
It remains to be seen whether GAP in the US will follow suit.
Final Thoughts
It does now feel that the long-heralded death of the high street is becoming a more salient possibility. However, with online shopping experiences becoming deeper and more engaging than ever before, the future for retail seems rosy.
You can hear GAP Inc's Director, Test & Learn COE, Data & Analytics David Rose speak at eTail Palm Springs 2022, taking place February 28 to March 02 in Palm Springs, CA.
Download the agenda today for more information and insights.