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Analysis Of Gap Inc. Multichannel Strategy

3873 words - 16 pages

Table of Contents:
1.0.

Company Overview: ........................................................................................................ 3

2.0.

Industry Overview: .......................................................................................................... 3

3.0.

Gap’s current channels strategy’ analysis: ....................................................................... 4

3.1.

Gap’s market segmentation: ........................................................................................ 5

3.2.

Gap’s Current Channel Chains:................................................................................... 6

3.3.

Gap’s ...view middle of the document...

.............................................................................. 7
Figure 5: Gap's Suggested Channel Chains Diagram .............................................................. 9
Figure 6: Order and Distribution Archetypes ......................................................................... 10

Page 2

1.0. Company Overview:
Founded in 1969, Gap is an American apparel retailer which has been an icon of the ‘90s
fashion in the U.S. With more than 1700 stores across 50 markets the brand is the flagship of
the Gap Inc. which includes three other labels; Banana Republic, Old Navy and Athleta (Gap
Inc., 2015a). The company’s offering varies from denim to classics white shirts and khakis;
it also includes collections for kids and tods. Whilst between 1990 and 1999 Gap’s sales
impressively rose from $1.9 billion to $11.6 billion, the company is nowadays facing major
losses with net sales decreased by 4% during the first half of 2015 (Euromonitor, 2015a).
Whilst the expansion of fast-fashion players such as H&M and Zara is increasing low cost
competition in the apparel market, Gap’s poor performance is largely related to its failure to
provide consumers with high quality products and meaningful shopping experiences
(Rosenblum, 2015). In the attempt to regain market share, the brand is currently introducing a
new strategy with two main objectives; geographical relocation toward China and India (by
closing 175 stores in North America), and improved customers’ experience achieved through
better cross-channels integration (Euromonitor, 2015a).

2.0. Industry Overview:
The apparel and footwear market, valued at 1.749.5$ in 2014, maintained a considerable
growth of 4.5% during the last year. Whilst showing the lowest increase of the last ten years,
China is still predicted to become the biggest apparel and footwear market in 2015. On the
other hand, Europe is forecasted to record negligible growth through 2019, with various key
countries including Spain, Italy and France witnessing continuous sales’ drop. However, this
region remains a main tourist destination and fashion hub, thus its strategic importance
cannot be overlooked. (Euromonitor, 2015b).
Figure 1: Childrenswear Sales and Growth vs Apparel and Footwear 2009-2014

Regarding consumers’ behaviour, the postrecession rebound is resulting in shoppers
trading up from unbranded to more premium
products. Whilst womenswear still conserves
the higher market share with sales reaching
US$662.1 billion in 2014, menswear is
growing faster due to both greater focus on
personal appearance and large disposable
incomes. Male consumers are turning to the
internet for fashion advices through fashion
blogs and forums. They are using these tools as
starting point to enhance their knowledges in
fashion. Lastly, another category well
performing is childrenswear which, as figure 1
shows, exceeded the overall apparel and
footwear growth. This niche is moving...

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