GAP, the iconic American casualwear Brand, which is famous for its sweatshirts and hoodies has closed hundreds of stores over the past 12 months. The recent announcement is the closure of 81 stores across the UK and Ireland. In 2020, GAP shut 225 stores in the US including its iconic flagship store in San Francisco where it shared a store wall with OLD Navy, as well as exited the ownership of 2 iconic brands, Hill City and Jane and Jack. A globally renowned brand with a presence across the world, why would store closure be a reason with its rich legacy and history? No, it cannot be the Covid-19 pandemic. Such brands are not only considered resilient but also are known to innovate time and again during such times of crises. Levi’s is one such.
Well, for beginners, it’s the legacy of GAP, after all. GAP’s burden was it’s legacy.
When some brands become a part of the societal imprint, they get used to their environment so much, not realising they would become indistinct over time. GAP, which was known all along for their iconic loud branding, prints and cotton shirts and T-shirts didn’t sway to the Millennials who are supposedly deciding the fate of thousands of brands worldwide. From caffeine laden Nescafe or Coke to Vegan loaded Yogurts, from ethical manufacturing of dresses to mobiles and watches, they are closely monitoring what Brands are up to. So, at some point, GAP couldn’t change course and remain agile, serving the needs of the current gen, rather remained static. From large stores to repetitive designs, GAP’s range has remained a favourite for a generation of Baby Boomers in the US (and is spread worldwide) but nothing beyond. Many new brands which have come up in the past decade or more are darlings of the millennial customers who do not believe it makes sense to wear a “brand” on their sleeve. Or their chest, in this case.
Discounts. More Discounts. The Unending Sales.
Many Brands who had unfortunately got in to the trap of an all-year EOSS – End of Season Sales have never made it out. Customers, over time not just feel cheated for having paid a full-price for a product which goes on sale almost in the next few days, some times at even half the price. So, these customers start sitting on the fence and eventually buy only when there is a discount. So much so that brands like GAP run a small area in their stores where products are on “Sale” perpetually all through the year. And by the way, no one wants to wear a new branded merchandise to work or to party when every one around knows the Brand is running a deep discount sale!
E-Commerce is a channel, not an Industry
Many legacy brands are of the view that E-commerce is an Industry, rather not a distribution vertical or a channel. While it does take some technical “expertise” to win over the digital onslaught, selling on the Internet on the other hand is no rocket science either. But it does take a lot of effort. From cataloguing products to 360* view photos, running special promotions all year to Remarketing online, the E-Commerce teams of Brands need to spend a lot of time to stay on course. Just that this is a daily job. And a Day- and night one at it. Newer D2C Brands are innovating new Sales and Marketing Strategies which are not in the book. So, they give a run for money to these legacy brands. As long as Brands – newest or vintage, do not take E-commerce as an inclusive part of their business strategy, they are bound to miss out on a newer audience. For Ex., the Gen-Z and the Millennials prefer shopping online, take trials or return the products if they aren’t satisfied and over time, decide to visit the same Brand’s physical stores nearby to explore more options. In some way, E-commerce has already become the first source of entry to a customer’s consideration set.
Expansion is a bane
The good old philosophy in Retail of internal cannibalisation is not relevant for many consumer business categories. Fashion is one. To buy these products, consumers usually “take an effort” to walk, drive or even travel to another city. When that becomes mainstay, such as a Starbucks, the brand not just loses it’s sheen but also becomes commonplace and is not elusive anymore to cling a craving. It’s something available everywhere, for everyone and all through a region or state. The uniqueness and the “rarity” element becomes faded, with many people in a locality wearing the same brand, sometimes even the same designs, especially those which run on 70% OFF. While expansion is important for every brand in every category, Brands are not giving enough importance to the in-store experience that they offer. Add to it, the ignorance towards an omni-channel business construct, and Bingo! we have a perfect recipe to shut shop. From here on, it’s just a matter of time.
Lesson for newer Brands, especially in India
The country that we live in is geographically and demographically vast. In many instances, even a minor natural calamity such as floods or earthquake in one part of, say Mumbai or Bangalore, is not given much importance in another part of the same city which is spread over a 70-100 km radius. In a cluster like NCR – the National Capital Region which includes 2 states and a Union Territory, such as Haryana, UP and Delhi respectively, a few kilometres of drive could end up in a completely different state, related shopping habits and price preferences. So, expansion is good, mindless expansion is not. For the sake of gaining business, to remain on a perpetual discount is nothing but indicating customers to walk away from the brand for good. To remain relevant to the Brand’s core consumers, to innovate from time to time and to address the audience in a language they understand and accept is key, to not just being competitive, but also relevant in eras like this where an internal dysfunctional, systemic plague is blamed easily on the pandemic. Easier said than done, but Brands can learn lessons from GAP and many others.
GAP celebrated its 50th anniversary in 2019, just before when the pandemic began. That was a decade after Co-Founder Don Fisher departed this world. He, for sure wouldn’t have predicted the fall, rather would have prepared for the best. Learnings from Don and many others. More learnings from GAP, Old Navy, Banana Republic, Athleta.
Prepare for Change. Change. Live. Repeat.