Sunday, February 24, 2008

Case #2 Gap Inc.

Gap Inc. began with a single store and brand called Gap. The founder of Gap Don Fisher found it difficult to find a pair of jeans that fit him properly and opened up the Gap store as a result. The original Gap store that was opened in San Francisco in 1969 sold jeans and records. Din Fisher’s principle goal was “to make it easier to find a pair of jeans”. Gap Inc. now is one of the largest specialty retailers in the world. The company has 3,100 stores that house their four brands; Gap, Banana Republic, Old Navy, and Piperlime. Gap Inc. reported revenues for 2006 of $15.9 billion.
Gap Inc. would be considered a house of brands. Gap Inc. is a house of brands because the company emphasizes product-specific marketing with few ties to the other company brands. One of the only ties between brands is the company credit card. Gap Inc. offers their customers credit cards to be used between all four brands. Gap Inc. still attempts to make this separate between brands by allowing the customer to open the credit card at the brand they spend the most money at. This way a customer can open a Banana Republic card that can be used at Gap, Old Navy, and Piperlime, but has a brand specific image on the card and offers rewards based on the brand credit card. Gap Inc. never ties to brands into a promotion, and attempts to keep each brand as a separate entity. As an employee of Gap, I find it shocking the number of customers that are unaware of Banana Republic and Old Navy being owned by Gap.

Gap Inc. also uses each of their brands to facilitate marketing segmentation. Each brand has their own style, quality and price range. These differences help meet the needs of different consumers interested in purchasing apparel. On the Gap Inc. website each brand is given an identity to give consumers an idea of which brand they would prefer. Gap is the “Iconic American Style” brand, Banana Republic is the “Accessible Luxury” brand, Old Navy is the “Great Fashions, Great Prices” brand, and Piperlime is the “Fresh Online Shoe Shop” brand. The price and quality of the apparel ranges from Old Navy being affordable because of the somewhat lower quality of their products to Banana Republic being high quality clothing for a higher price. Gap falls in the middle of these to while Piperlime focuses on shoes.

Finally Gap Inc. also demonstrates itself as a house of brands because of its dominance in product category. Gap Inc. has four of the most recognizable brands of apparel. With the range in price and quality of their brands, Gap Inc. works to maintain dominance in the product category of apparel. The range of brands allows consumer with different demographics to afford the fashion products they desire. Many of Gap Inc.’s consumers shop all or most of Gap Inc.’s brands.

Upon arrival at the Gap Inc. website, whose main purpose is for investors in the company, offers a description of the company, a break down of the brands, career opportunities and information for investors. Once the category for brands is selected the list of brands appears with a simple description. From there a customer can click a particular brand to learn more. The site that comes up provides a full description of the brand along with a link to the website. Also at the bottom of the template that Gap Inc. uses for the website there is a link that a customer can click to Shop the Brands. A separate window appears which provides the list of brands and an option to “shop online” or “find a store”. The option to shop the brands, because it is part of the website template employed, appears on the bottom of a page on the gapinc.com website.

Once a customer selects which brand they would like to visit they are taking to a separate website that is personalized based on the brand. On each of the brand websites the set up and format of the website is similar, but the colors used are centered on the personality of the brand. Although each brand has a separate website for the brand, at the top of each of the templates for the websites is a bar “Visit the other Gap Inc. Brands” which offers links to the three other Gap Inc. brands. That is the only connection and link to the other brands.

The URL protocol for Gap Inc. and their brands is simple. Gap Inc. makes it easier for their customers to find their brands by simply using the brands names as the URL. Gap Inc. also uses .com instead of other ending such as .net because it is the most used URL ending. Gap Inc. websites are gapinc.com for the company page, and gap.com, bananarepublic.com, oldnavy.com and piperlime.com.

The strengths in the online branding approaches Gap Inc. uses for their brands are that the websites are very similar in appearance and layout of the brand sites. Although the websites incorporate their own personal color schemes the layout and the method of shopping online are identical. This makes it easier for customers to shop each of their brands, by keeping the brands similar. The bar at the top of each of the brand website pages is, I feel, very effective. When I shop online I typically will just go from site to site before I place any orders. With the links to each of the other brands right there, I am likely to shop these four brands based on shopping online on just one of the brand sites. Also once a customer clicks on a link to one of the other Gap Inc. brands, the website pops up in a new window. Although a simple strategy, this allows a customer to look at the other brands, but also keeps the window from the previous brand.

Another effective strategy of Gap Inc.’s online shopping experience is that once a customer adds an item into their online “shopping bag” the website remembers the IP address of the computer and recalls the shopping bag each time a customer returns to the site. The products will stay in the shopping bag until the product is no longer available or until the customer removes it from their shopping bag.

I also believe that Gap Inc.’s credit card system is effective. Customers are able to apply for a Gap Inc. brand credit cards, as well as use the card at each of the brands. They also separate the credit card by brand to allow customers to receive rewards to a particular store. The brand credit cards earn rewards when they are used at any of the four brands but come to the customer for one of the specific brands. This allows an additional incentive for the customers, because of the flexibility to use the card at any of the four brands and earn rewards.

The weaknesses of the Gap Inc. online branding approach are that the bar of links on each of the brand sites is small, and hard to notice at times.

Also, I think it is an enormous weakness that the customers of each of the brands do not recognize the connection and the fact that each of the brands is owned by Gap Inc. I think that the knowledge of the connection allows customers to recall Old Navy and Banana Republic while shopping the Gap. Also the fact that they are all owned by the same company means that the product lines are similar and will work together well. This way if a customer’s purchases a pair of pants on the Gap site, they might think to look on the Banana Republic site or Old Navy site for a top, or the Piperlime site for a pair of shoes to go with the pants.

Finally I believe that Gap should allow their customers to open one account that is used on all four brand sites. This way the customer only has to sign up once for the brands. This would also allow Gap Inc. to better trace purchases by customers across all four of their apparel brands.