Gap Looks to See if Shoe Fits Online
By George Anderson
Gap Inc. knows that some consumers simply cannot have too many shoes and it is counting on this buying behavior along with heavy traffic to its online sites to launch casual and designer footwear on the company’s Web sites for the 2006 holiday selling season.
Toby Lenk, president of Gap Inc. Direct, said in a statement, “Gap.com, OldNavy.com and BananaRepublic.com are all consistently among the top 10 specialty apparel sites in terms of traffic, so we believe we already have an active and loyal customer base for online footwear.”
The retailer surveyed its online shoppers last year to further gauge their interest in buying shoes from the retailer, said Mr. Lenk, and roughly two-thirds of respondents said “they would buy shoes online from Gap Inc.”
Stride Rite Corp., which owns brands including Keds and Saucony, is among the designers signing up with Gap Inc. to sell their shoes online.
David Chamberlain, chief executive officer of Stride Rite, told Reuters, “We have not come to a conclusion on it yet, (but) we are looking at the opportunity.”
Gap Inc. said it has signed numerous agreements with other footwear companies but that it was not ready to release that list as yet.
Richard Jaffe, an analyst at Stifel Nicolaus, said the upside to online for Gap Inc. is the company will not have to deal with a number of costs associated with selling shoes in stores.
On the other hand, he cautioned, there is also some downside. “You have very high return rates, as much as 25 or 30 percent on the Web, and that’s very costly. There’s also a
reluctance by the U.S. public to buy apparel on the Web.”
Moderator’s Comment: Is Gap Inc. making a positive move with its plans to sell casual and designer footwear through its online stores? What will it need
to do to be successful with online shoe sales? Would strong performance online support the retailer selling footwear in its brick and mortar locations? –
George Anderson – Moderator
Testing, trying, experimenting…using your store and your Web site as “living laboratories” is what good retailers do. Of course one might legitimately ask “is the Gap a good retailer?”
Shoes, because of inventory requirements (sizes) and fit issues, have always been a tough business for non shoe stores but ecommerce does allow for testing with much less commitment. On the other hand, it is important that everything Gap does fits with and enhances its brand which is in dire need of fine tuning at the present time. So, though I ardently support such trials, I also believe that the company has bigger fish to fry and I hope that this is not a “moving around the deck chairs on the Titanic” type situation.
This is a bit of a “me too” effort at this point…I can’t imagine why anyone would choose to buy shoes at Gap’s online store when they can do business with Zappos…thousands of shoes (and handbags) from every brand under the sun (including their own excellent private brands), fantastic dimensional views of every single product (cutting back on returns, I’m sure), customer reviews, free shipping (and my orders get to me so quickly, it surprises me every time), and no-questions-asked returns. If Gap is able to facilitate suggestive selling on the site (these shoes would go great with the outfit you just clicked), they’ll certainly snag some instant gratification purchases but I don’t see them becoming a meaningful shoe etailer.
It would make sense for the Gap divisions sell their own brand of shoes online. The article indicates, however, that they are planning to promote other brands online as well. Given that all of their merchandise is private label, this seems confusing and off-strategy.
Offering a more limited, but brand-consistent line of private label shoes and growing their web businesses through list exchanges and affiliate relationships with other online merchants would seem like a better long-term method to maintain brand integrity.
Why on Earth shouldn’t they sell footwear online? Just because lots of other companies do it, and profitably, doesn’t mean that there’s no more room in the pool. I don’t see them becoming the destination for shoes online, but if they use a modicum of intelligence, they’ll do just fine.
I am not seeing how this initiative supports, enhances or drives the corporate mission statements and competitive advantage. Of course, I’m not all that clear on the actual competitive advantage that has become the GAP corporate focus.
There are no particular reasons not to sell shoes online. Except that different skill sets, metrics and merchandising focus are required to be successful selling shoes. Except that right now, the core business is struggling and would seem to warrant and deserve every erg of management energy available. Except that selling other people’s brands doesn’t really support the GAP brand.
Perhaps the intention is to learn enough about the style and size preferences and profiles of their customers to then expand into GAP private label shoes in the brick and mortar stores. As a learning, training, understanding laboratory…that would make sense.
Certain retail segments have long suffered from excessive competition and minimal profitability. Who’s the poster child? Footwear retailers. Unless Gap has a unique creative spin that can’t be knocked off in 90 days, it’s unlikely to hit a home run, profitwise. I agree that retailers should always be testing new concepts. But how about testing new concepts that relate to the core mission?
Yes! Using and maximizing their online presence will enable GAP to better compete. Also, they can start to become more customer centric by tying their online purchases to their stores via a blanket return policy. This will allow for cross-merchandising and dual-customer service programs to shape the organization better, and to provide their customers with the valuable security which the online experience must provide. To do this successfully, Gap must take their cues from other successful online retailers like Lands’ End, L.L.Bean and others. Anything less than excellence in service, easy to use websites, full return policies (including returning online purchases at stores) and transparent systems will restrict their success into this foray.