Gap What Efforts Are Being Made To Improve Performance?

According to the world's clothing and shoe net, the biggest US in the performance quagmire is the biggest.

Retailer

Finally, I saw the signal of good performance.

In order to catch up with other competitors, what efforts are being made by Gap?

Gap group recently released its initial performance in the second quarter, its sales fell 1.29% to 3 billion 800 million US dollars compared to the same period last year, but net profit rose more than doubled over the same period last year, that is, 116.8% to 271 million dollars, and the same store sales increased 1%.

Among them, the core brand Gap same store sales continued downward trend, recorded a 1% decline, but the decline is narrowing.

Banana Repubic same store sales fell 5% year-on-year, Old Navy is still the only growth.

Same store sales rose 5% year-on-year.

Art Peck, group president and chief executive, expressed satisfaction with the performance of the quarter, proving that its restructuring strategy and investment in consumer experience and products have begun to pay dividends.

In view of better performance in the second quarter, the group has increased its annual performance target.

Further ahead of the first quarter of this year, Gap's performance was also more optimistic, with the US market recovering.

Thanks to the strong performance of Old Navy and Athleta, Gap Group sales increased by 2% to US $3 billion 400 million over the first quarter of April 29th, while net profit rose 12.6% to 143 million US dollars.

During the period, sales of Gap group's brand Old Navy recorded an increase of 8%, while sales of core brands Gap and Banana Republic fell by 4%.

After a period of downturn, Gap group performance finally showed signs of improvement.

Although the core brand Gap still fell, but with the strong performance of Old Navy and a series of restructuring measures, Gap is making great efforts to make up for its distance from fast fashion brands such as Zara.

Reduce discounts and promotions

Over the past year, US Department stores have been in a quagmire of performance. The main culprit is a discount sale that has gone crazy over the past ten years.

Department store promotions triggered a series of joint reactions, not only to reduce the light luxury brands such as Michael Kors diluted profits, but also to train a group of consumers who have been accustomed to various holiday discounts, black Friday and quarter end discounts.

Excessive sales of discount promotions often lead to unsalable sales of commodity prices, which must be cleaned up through promotion, which leads to a vicious cycle of fashion sales.

From the psychological point of view, consumers think that buying a positive price product is a "loss".

In order to maintain brand image and speed up pformation, fashion brands bear the brunt of reducing department stores' promotional activities.

Fashion review media The Fashion Law quoted Pennsylvania retail business analysis company First Insight's report that retailers and brands continue to discount the practice of "fatigue" for consumers, consumers no longer need to pay the full price for clothing and accessories.

The report, entitled "discount fanaticism", states that 45% of American women see a price below 40 percent off before they enter the store. In addition, consumers are usually willing to pay 76% of the price of women's clothing, because consumers do not think that the value of products matches the price.

Less expensive clothing retailers are not immune to discounts and promotions, but for less profitable clothing retailers, the discount is equivalent to drinking poison to quench thirst.

Gap is now tackling the problem of many brands, reducing discounts as an important part of the brand restructuring strategy.

But the question is, how can the Gap group attract picky young consumers in the increasingly competitive fashion retailing industry in terms of fashion, supply efficiency, delivery experience and uniqueness?

Younger and more fashionable

Not being young and fashionable is a drawback that Gap group has been criticized for.

But before Zara became popular all over the world, Gap's American leisure style was once regarded as the fashion of young people.

With the development of the trend, the style of American youth has been lagging behind. The A&F, American Apparel, Urban Outfitters, Wet Seal and Rue21 are facing the crisis of performance degradation, sale and bankruptcy.

Nowadays, young consumers begin to favor special and fashionable products, and gradually become immune to basic products such as Gap clothes.

Obviously, in order to catch the hearts of young consumers, Gap must provide more freshness.

In July this year, Gap launched a series of joint designs with China's social app WeChat.

Joint design has become the standard and promotion configuration of fast fashion brand, but the joint name of clothing brand and technology brand is rare.

WeChat, which has 1 billion active users, maintains high user stickiness by grasping people's biological attributes of social interaction, especially the current youth culture characterized by social culture.

Gap and WeChat jointly apparently take a look at WeChat's community and integrate into the real and life style design of Gap.

From the choice of partners, Gap has been looking for the right direction.

From the more core products, Gap is also making some efforts, such as launching the GapFit sports series, focusing on the fashion of products, and strengthening tannin products which are more popular with consumers.

But from Gap's Chinese stores, product innovation is still not significant.

Compared with the fashionable Zara and H&M, Gap's efforts on products are slow and not thorough enough.

The younger generation likes fashion products, but the traditional style of Gap is simple and natural. Gap needs further grope for how to balance the two issues.

Compared to the same flagship fund and better performance of UNIQLO, Gap is slightly inferior in terms of product technology and product category.

The innovative technologies such as UNIQLO, light down, Heatech and so on already have a number of loyal clusters. The one-stop product selection has attracted consumers of all ages.

At the same time, in terms of brand image, UNIQLO China also adopted Ni Ni, Chen Kun and other popular stars to shape the brand image.

Gap had asked Xun Zhou and Jing Bairan to be spokesmen, but in the past one or two years, there were not many marketing moves.

Supply chain is the infrastructure of fast fashion.

Although Gap has never positioned itself as fast fashion, in the rapidly developing apparel retailing industry, Gap has gradually been placed in the same camp of fast fashion brands such as Zara, and consumers have raised expectations for the Gap supply cycle.

A&F and American Apparel were hit by fast fashion when they were classified as fast fashion, and then began to go downhill.

Between the faster Zara and the traditional clothing retail brand, consumers are more inclined to choose the former.

Therefore, the weakness of the supply chain is the biggest obstacle to the development of traditional clothing retail brands. Moreover, the traditional fast fashion brand, which is known for its immediate response to consumer demand and constantly bringing freshness, is also being challenged by "Ultra-Fashion".

They are shorter from design to shelf, and more products are updated in fixed time.

In this case, Gap also put the supply chain problem on the agenda of reorganization.

Art Peck, chief executive of Gap group, emphasizes that the restructuring measures of the group are progressing smoothly and will improve the efficiency of the supply chain to meet the changing needs of consumers in the future.

More specifically, Peck said that during the tenure of office, Gap group would reduce the average development cycle of 10 months to 8 to 10 weeks, so that the company could compete better with fast fashion retailers.

UNIQLO, which is more similar to Gap, announced earlier that it would further shorten the product cycle and move towards fast fashion.

Product cycle is only part of supply chain construction, and inventory management is equally important.

It is a more complicated problem how to arrange the time reasonably, clean up the stock with appropriate and not excessive discount, and make room for new products.

Gap is improving the importance of supply chain construction, because the flexibility of the supply chain is related to the consumer experience.

{page_break}

Open up online and offline consumer experience

More and more clothing brands are beginning to realize that they sell not just clothes, but collections of dress experience, shopping experience and cultural experience.

Wearing experience is aimed at the characteristics of the product itself, such as fashion and fabric science and technology innovation.

Shopping experience is aimed at consumer online and offline shopping experience, such as whether the web page is smooth, the payment options are diverse, whether the logistics is convenient, and the quality of store service and product display.

The competition for apparel retail in the future will be about the competition of experience.

For Gap, competition also comes from offline and online, including Amazon, Tmall and Jingdong.

Some analysts believe that the time for Gap to enter the Chinese market is not very good. It needs to make more changes and attempts, such as new marketing strategy and consumption experience.

On the 25 day, 863 of China's largest flagship store, Gap, opened in Nanjing West Road. The two tier flagship store includes men's and women's clothing on the first floor, children's clothing on the two floor and the "gap body" home series.

Throughout this new flagship store, Gap can experience the conscious creation of experience, including mobile phone filling stations and children's amusement parks.

In terms of digitalization, flagship stores have electronic Touchscreens and LED model fitting screens for consumers to get inspiration and look for specific products.

Not long ago, UNIQLO launched an electronic screen with similar functions.

In the "future store" of Farfetch, the store also includes smart clothes hangers, smart fitting glasses, and a series of new facilities built around the experience of physical stores.

The fast fashion brands with entities are also paying attention to the experience of physical stores when they are hit by the ultra fast fashion business.

There are people in the industry who say that apparel retailers should not only bring consumers to stores through discounts, but try to establish the overall value of physical stores.

It can be expected that the children's playground in Gap flagship store, which provides a new space that is biased toward paternity and lifestyle, and a store with a sense of technology, will stimulate consumers' entry rate to a certain extent, and satisfy consumers' needs for novelty shopping experience and parent child culture experience.

Of course, while Gap continues to create experience offline, the expansion of the online market is synchronizing.

According to the 36 krypton report, Cherry Zhu, director of the Gap Greater China business department, said that more than 70 consumers in China can now place orders online and store them offline.

Gap plans to open up the online and offline consumer experience of China's business and open up the membership points.

At the same time, Gap and Tmall reached a full channel cooperation, hoping to make up for the shortcomings of Gap's current stores in China through Tmall's traffic advantages, and bring more consumers to the brand.

In the fast fashion retailing industry, the most fatal thing for traditional clothing retailers is to turn too slowly. Can Gap's efforts in the Chinese market work further?

More interesting reports, please pay attention to the world clothing shoes and hats net.