GAP Closes A Gap In The Market

Posted: December 29, 2010 in Brand management, Marketing

I like shopping for hours without stopping for a rest like many people and Gap Inc is one of my favorite brands although I do not usually prefer to buy something due to high prices. However, I should admit that I take advantage of pictures that are all over the Gap Inc stores while combining my clothes. It’s a common scene in Gap Inc stores for shoppers that have visited the shop’s website, decided what they like and printed off the pictures tell store workers: “I want this”. This is a way from the virtual domain to the real one.

Nowadays customers must be much less willing to shop at Gap store because the US’ largest specialty clothes retailer sells its products on its website and offers a free delivery service. Moreover, customers can find dressing tips and hosts interactive programs in the website.Glenn Murphy, chief executive officer of Gap, thinks that having online store is a fundamental tool in the e-commerce era.

Last month, the online strategy of the fashion brand has been launched in China, which is the world’s fastest-growing economy. There is a Chinese-version website and online store, gap.cn. The virtual shop is a joint venture with a Shanghai-based information technology company managing orders and Gap controlling the e-commerce and storage side.

So far, Gap China’s online store has received orders from places as far apart as Harbin in Northeast China, Kunming in Southwest China, Xinjiang in Northwest China and Guangdong in South China.

Early in November, Gap participated in a platform developed by social website Facebook.com for retailers to provide potential consumers with discount products. The fashion brand immediately launched a marketing initiative by sending free jeans to the first 10,000 netizens who joined and attracted lots of customers to its stores.

Although Gap is a late-comer compared with its global competitors such as Zara and H&M, Murphy said, “We are not in a hurry.” He told that the company would develop multiple channels. “Our online service can help the brand stretch to cities without stores,” he said.

According to Murphy, online stores promote word-of-mouth marketing. “If someone says to his friend, ‘Have you ever heard of Gap? You can find it online’, that’s way more powerful than billboards, television and advertisements in the newspaper. It is really cool,” Murphy said.

On the other hand, Yue Sanfeng, a partner at Hejun Consulting company, said Gap should speed up to enhance brand awareness, otherwise many small companies could seize the market using lower labor costs and imitating successful lines.

Yue said that in the United States, ordinary people only spend 1 percent of their income on a pair of trousers from Gap, but in China it should be about 5 to 10 percent. “Under pressure from high housing and car prices, many middle-income people would rather choose cheaper clothes, only buying a luxury item after saving money for a long period of time,” he added.

Murphy added that the global specialty apparel retail industry was highly competitive and its first month of booming business will not guarantee its future popularity in China. But he said the company was determined to enter China.

“It’s a huge market, and we are sure to expand new stores in Hong Kong next year,” Murphy said. “An online store will be opened in advance for promotional purposes.”

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