Gap Seeks Out New Customers
Gap Inc. plans to shift its marketing “disproportionately
to acquiring new customers” this year, including a younger demographic
as well as African American, Hispanic and Asian customers.
Speaking at the recent Bank
of America Merrill Lynch consumer conference, chief executive Glenn Murphy
said that, during the recession, the company shifted its “marketing
and shifted our balance to holding on to the customers we had and didn’t put
as much money towards acquiring new customers. That was a strategic call we made.”
the company is “disproportionately” shifting its focus toward
new customers in two areas.
First is targeting the younger range of its
25 – 35 year old demographic.
Said Mr. Murphy, “Our range we halo slightly
down and slightly up is between 25 and 35 years old. At 25 to 30, our share
is lower than we’re comfortable with. You’ll see the marketing shift towards
that, whether it’s in medium or messaging, to try to get a bigger share of
The second area is increasing diversity in its U.S. customer
base in particular.
“We as a business do not have the share we should have with the African
American community, with the Hispanic community, and with the Asian community,” said
Other ways Gap Inc. will look to drive top-line growth in North
- Delivering more trend-right product and chasing hot items
more quickly through a new pipeline system that speeds concept to store from
eight to 16 weeks.
- Introducing new categories such as last year’s newly licensed
T-shirts and jewelry at Old Navy as well as the expansion
of the GapFit athletic line at its Gap chain.
- Integrating its outlet and specialty businesses at the Gap and Banana Republic,
partly to capitalize on the strength at its outlets over the last three years.
- Using RFID in select stores to not only improve inventory accuracy but
to help store associates find merchandise within a store.
- Further capitalizing on driving online sales to physical stores as well
as store to online. For example, if an item is out-of-stock online, a customer
at some Banana Republics can be sent to the nearest store to find the item.
- Gap Inc. Presentation
at Bank of America Merrill Lynch Consumer Conference – Veracast.com (Download)
- Gap Inc. at Bank of America Merrill Lynch Consumer Conference Transcript – Thompson
Reuters (For purchase)
Discussion Questions: What challenges does Gap Inc. face in attempting to reach a younger and more diverse customer in the U.S.? What do you think of the Gap’s other strategies to drive top-line growth?