1. GAP Inc.
Kelly Milstead

2. Agenda The beginnings of Gap Inc. Technology Organization Management
Strategies
Business challenges/problems/opportunities
Current

3. Background Information
Gap Inc., was founded in 1969 by Don and Doris Fisher
Named after the “Generation Gap”
Targeted late-teens
Brand built around Levi's jeans
Current Stock Price: 41.22
Headquarters: San Francisco, CA
CEO: Glenn K. Murphy
More than 3500 stores worldwide
More than 136,000 employees around the world support Gap Inc. and its six brands.

4. Technology
“ This is about being clicks and mortar – letting the customers access the Gap brands, whether in store or online” - Ron Beegle, E-VP, Gap Inc. Direct

5. Online Shopping
Gap Inc. online store openings: GAP, BabyGap & GapKids,1999 – Banana Republic & Old Navy
Saw opportunity to solidify their brand, build closer customer relationships, serve markets that were too small to profitably support a store, and improve profit through cost saving
Opportunity to collect information that is difficult to get in brick and mortar store such as where the customer lived, when they accessed the site, the length of their visit, frequency of purchases, products selected and dollars spent

6. Gap’s Online Incentives
Return Policy: whereas internet pure-plays required the customer to deal with the hassle of mailing back products that didn’t fit, customers who bought through gap.com could also return to products to any store location
Alterations: purchases made at the Banana Republic website or catalog could be brought to any store location for free alterations (just as if it had been purchased at a store)
Trusted Brand: Gap’s well-established brand and reputation made customers feel more comfortable making online purchases. Additionally, customer retention rates for traditional merchants were 10 to 20 percentage points higher that online competitors
Pre-Shopping: Many customers valued the opportunity to do product research on the web, and then make a purchase at a bricks and mortar store
In-store promotions: Gap leveraged the stores to drive website traffic with a variety of strategies, including gap’s ‘surf.shop.click’ posters, and the recent introduction of the web lounges in new York, San Francisco, Los Angeles and Aspen
(Graduate School of Business Stanford University 2000) (Joslin, et al. n.d.)

7. Online Benefits
50% of customers who shopped online and in the store spent more then when they just shopped in store
Utilizing the internet increased profit by saving on expenses that can not be cut in a brick –and – mortar but can be cut online

8. E-Commerce Facts
According to the US censes bureau online shopping revenues have increased from billion in 2009 to billion in ( 16% annual increase)
Total retail sales only grew by 5.1% in 2012
E commerce sales accounted for 5.2% of total retail sales. This is an increase form only 4% in 2009

9. Promoting Gap.com
Promotions were geared to drive customer resignations and collect s addresses and offer discounts.
s were used to send promotions , new arrivals, specials and birthday and gift reminder services. These s drove a significant percentage of the online sales
In 1998 Gaps advertising budget was 400m (4.4% of total sales) Gap spent approximately 3m on Gap.com
In 2000 Gap sales accounted for 5% of appeal dollars spent in the United States
For shipment purposes they established specific warehouses for the online stores
Established a 800 – number call center for customer support
Store employees promoted website

10. Management Timeline Don fisher Opened the first store in 1969
In 1974 Gap stopped selling Levi's, and introduced a private- label clothing line.
Took over supply chain, and product development, therefore they were able to price competitively
In 1983 Mickey Drexler joined the company as president
Came form Ann Taylor
Acquired Banana Republic in 1983
Opened GapKids store in 1986
Opened first international store in 1987
Opened BabyGap in 1991
Introduced the Old Navy Brand in 1994
2003 stock fell by two-thirds

11. Management Timeline Paul Pressler took control in 2003
5 consecutive years of decreasing sales
Failed turn around attempts
Fashion mistakes
Current CEO Glenn Murphy
Reduced US store count
Slowly expanding internationally in Europe and China
In 2006 Gap started Piperlime an online only shoe store
In 2007 Gap starts to open franchise stores
In 2008 Gap acquired Athleta

12. Strategy
Market segmentation strategy – each brand has a very specific target customer
Gap – collage age, teens, year olds (more female then male)
Banana Republic – older and more affluent consumer, and offered more stylized products
Old Navy - families, focused on the bargain-minded consumer, offering fashionable, value oriented clothing at lower price points
Athleta – for women athletes
Piperlime – Online shoe, bag and clothing store. Sells brands not affiliated with Gap Inc.
Each brand has its own president therefore enhancing the separation of the brands. There is a very limited relationship between brands
Well balance offering though different brands
E-Commerce strategy mirrored their offline strategy – establishing new markets, focusing on stylish value driven product, and keeping value- drivers tightly controlled in house

13. Gap Inc. Brands

14. Challenges Few barriers to entry No switching cost Competitors
Fast Fashion

15. Business Challenges - Competitors

16. Manufacturing Gap Inc. does not own any of its manufacturing factories
Reliant on outside vendors for supply of products
98% percent of merchandise comes from other countries – mainly China
Outsourcing the manufacturing results in having very little control over the timing and the quality of the finished product

17. Need for “fast fashion”
In order to stay competitive Gap Inc. will need to keep up with retailers who can offer “fast fashion” that offer latest trends for lower cost
H&M, Zara, forever 21

18. S.W.O.T Analysis

19. Gap Inc. Today
Gap products are available via online in approximately 80 countries
In the 3rd quarter of 2013 sales were up 1.5% in the US, 11% in Asia, 3.5% in Canada and 6.8% in Europe
In the 3rd quarter of 2013 Gap reported net sales increasing 3.1% to billion
More than 3,100 stores across the United States, United Kingdom, Canada, China, France, Ireland, Japan and Italy
375 franchise stores in locations across Asia, Australia, Eastern Europe, Latin America, the Middle East and Africa

20. QUIZ What brand was Gap originally centered around? Ann Taylor Levi’s
Lee
What is not one of Gap’s online shopping incentives?
Return Policy
Free Alterations
Better discounts than in store
Gap now has franchise stores
True
False

21. Works Cited
GAP GAP Inc. About us . May 14.
Graduate School of Business Stanford University "Gap.com." Richard, Peter Lueck, Chad Martino, Melissa Rhoads, Brian Wachter, Robin Chapman, and Gail Christian. n.d. “
Gap, Inc.: Has the Retailer Lost Its Style?" HITT.IRERLAND.HOSKISSON.
n.d.
Kell, J. (2013, Nov 22). Corporate news: Gap's profit gets boost from online and abroad. Wall Street Journal Retrieved from
The Gap, Inc. SWOT Analysis.
The Gap, Inc. SWOT Analysis. (2013). Gap, Inc. SWOT Analysis, b79d-d025c18499e5%40sessionmgr4004&vid=4&hid=4109