Why Does GAP Shorten The Product Cycle?

The lack of brand growth is reflected in all aspects. Closing stores, layoffs and pformation has become a common way for fast fashion enterprises to solve the financial crisis.

According to the United States

brand

The three quarter results released in the 2017 fiscal year show that the performance of GAP departments has increased in the 3 months ending September 30th, which has improved compared with last year's performance decline.

The GAP plan will continue to force online businesses in the future and shorten the product cycle from 10 months to 8-10 weeks.

But this cycle is much longer than the average cycle of fast fashion.

Performance rebounded slightly

According to the world clothing and shoe net, GAP sales increased by 1% to 3 billion 840 million US dollars in the 3 months to September 30th.

Core brand GAP sales increased 1% year-on-year, while Old Navy sales recorded a 4% growth, while Banana Republic fell 1% compared to the same period last year. According to GAP's explanation, this is due to the impact of Banana Republic being shut down.

In addition, GAP net profit increased from US $204 million in the same period last year to US $229 million.

Compared with sales of 3 billion 798 million US dollars in 2016, GAP's performance has eased this year. Old Navy has increased 1 percentage points compared to 3% last year, and Banana Republic has picked up quite a lot from last year's 8%.

In fact, since 2014, GAP has gone through a difficult development course, and has begun to recover some of its achievements by closing stores and layoffs.

According to statistics, in June 2015, GAP announced that it had closed 175 stores in North America, and the headquarters had laid off 250 people.

Art Peck, chief executive of GAP group, said at the time that it hoped to reduce costs.

But subsequent actions show that GAP has been shutting down stores and unable to control costs well.

At present, GAP has 3639 stores in 46 countries in the world, of which 3193 are directly operated by the company.

Shorten product cycle

It is worth noting that Art Peck indicates that Old Navy will become faster and the delivery cycle will be shortened to 9-14 weeks, depending on whether the product is shipped or air freight.

In fact, GAP also put the question of supply chain on the reorganization agenda earlier. Art Peck stressed that the restructuring measures of GAP are in progress. In the future, the efficiency of the supply chain will be improved to meet the changing needs of consumers, and the average development cycle of 10 months will be reduced to 8-10 weeks, so that GAP and fast fashion retailers will better compete.

Statistics show that ZARA and other fast fashion brands have created a new business mode, fast fashion, by breaking the fashion season of three years, which has lasted more than a century.

This also changed consumer spending habits, according to a random survey by reporters. Before that, the buying cycle of ordinary consumers was about 3 months, and when the fashion appeared, the cycle shortened to 1 months, two times or even shorter.

This business mode has greatly facilitated consumers. Previously, UNIQLO said that UNIQLO plans to shorten the production cycle from design to delivery to about 13 days, while the ZARA brand of Inditex, the world's largest apparel retailer, has spent about 13 days. Compared with the two brands, the delivery cycle of Old Navy is still too long.

Product innovation is not easy.

For all of the above, industry experts believe that although GAP plans to close 200 stores worldwide, GAP brand still wants to gain a foothold in China. But now it seems that GAP is facing a lot of pressure from competitors. At present, GAP has 22 stores in Beijing, and UNIQLO owns 66 stores, while H&M has 31 stores. Compared with competitors, GAP is slightly inferior in number of stores.

In addition, the location of UNIQLO and H&M stores is mostly in the core position of the core business circle or shopping center, but most of the shopping centers in GAP are mainly convenience oriented.

In the shorter product cycle, an industry expert who declined to be named told reporters that the GAP shortening cycle is a huge change, which means that the company will subvert the entire product line and the design team process.

But he also said that GAP even shortened its Old Navy product cycle to 10 weeks, much longer than that of ZARA.

Moreover, the short meaning of the short period is that the fashion trend is shorter. For example, the consumer just saw a special dress on a show, and it began to sell in the fashion shop within a few days, and the price is very cheap. At that time, the consumer will definitely buy it. After the consumer has already bought many clothes, the other fast fashion brand stores will be on sale. The sales volume of the fast fashion shop after sale will certainly not compare with the first sales brand. This is the meaning of fast fashion.

In addition to the time factor, he also believes that Old Navy is mainly based on the basic funds, but the basic section is not like the improved version of the international big T T show. It does not need the fast product cycle. So the future GAP needs to innovate in products, and at the same time, it should shorten the product cycle to better adapt to the development of fast fashion.

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