Gap Inc. is an international retailer that offers a diverse range of clothing and accessories to people of all ages. The company has its own locations as well as franchise agreements in a variety of nations across the world. In addition, the company offers its items via its well-established website.
Why is Gap Inc. in trouble?
1. It was unable to adapt.
Experts say the store, which started out selling only Levi's and LP records in San Francisco, has recently fallen behind on fashion trends.
"Gap is suffering the price for years of delay," says Natalie Berg, a retail expert. "There are no second chances in this setting because there is so much change."
Another point of disagreement is that Gap did not put enough money into its online sales.
The corporation "lags behind the curve in terms of the sophistication of online competition," according to Retail Economics expert Richard Lim.
He believes that companies like Next are "scooping up Gap customers" because they have invested hundreds of millions of dollars in developing a strong online presence that now accounts for more than half of their sales.
Mr. Lim feels that Gap's decision to switch to online-only trading will not ensure its success. "During the move to online, Gap's profit margins were not protected, and rising costs would quickly erode them."
2. There are too many discounts
While giving customers money off can be appealing, Natalie Berg believes Gap did it too frequently.
She feels that too many 50%-70 percent off offers led to "promotional fatigue" among Gap shoppers.
"They pushed buyers to buy on sale, which was building a rod for their own back," she argues, explaining that discounting is a zero-sum game.
Their lack of pricing flexibility, according to Ms. Berg, led in a "race to the bottom."
She says that if fashion companies regularly provide discounts, the clothes will become unpleasant and have a low perceived worth.
3. Not distinctive enough
According to retail experts, Gap also failed to separate out from the throng and keep up with changing trends among its core customer group. Mr. Lim feels that Gap has lost its personality and has become much more vanilla.
Gap lost out because it was "no longer a unique and fascinating concept," according to Diane Wehrle, insights director at customer analytics firm Springboard. She believes that the company's garment lines haven't altered much in recent years, and that competitors such as Superdry and Hollister provide nearly comparable products.
According to Cathy Parker, a Manchester Metropolitan University professor of retail and marketing enterprise, Gap is not alone in its struggles; all of the major High Street stores are experiencing difficulties. This, she believes, is a common problem for firms in the "big middle," or the market segment where the biggest stores compete for the most customers.
"It means it's difficult to distinguish yourself from a lot of other similar chains; you can't determine what makes them distinct when you walk in the door," Prof Parker explains. She continues by claiming that inability to stand out is followed with a failure to respond to local demands.
"They were appealing in the 1980s, when global fashion was prevalent, but people have become more different, and their strength is no longer in their standardisation," says the author.
4. It had an excessive number of stores.
Many large chains have closed shops, and well-known names like Debenhams have altogether vanished from the High Street as a result of Covid.
"We have an overstock of shop space that is no longer fit for the purpose," Natalie Berg claims.
Instead of traditional shopping experiences, Ms. Berg believes that merchants must now go "beyond the product." Ms. Berg believes that in order to compete with online shopping, the store needs to be a "hub for fulfilment," offering an experience that customers can't obtain anywhere else.
According to Richard Lim, Covid-induced lockdowns have been the "final nail in the coffin for too many stores" and Gap's "uninspiring" shopping environment.
Experiences, he believes, were considerably more important in driving footfall, and Gap "failed to embrace that."
The Truth About Gap
1. Don Fisher discovered the gap when he couldn't find a suitable pair of jeans.
2. In 1972, the fishers launched their own denim line.
3. The fishermen set a few rules at the gap.
4. The first signs of the chasm were quirky advertisements.
5. In the 1980s, the Gap discontinued "ugly" clothing.
6. When the fishers weren't inspecting the gap, they acquired a lot of contemporary fine art.
7. Clothes designed by Gap for "the people."
8. The gap made khakis and swing music fashionable in the 1990s.
9. In 2010, the Gap temporarily modified its logo.
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