Gap to test online ordering in stores
In June, The Gap Inc. will start trialing "order in-store" to capture customers who would otherwise leave the store after failing to find their size, style or color.
At its annual investor meeting last year, Gap officials noted that about 70 percent of shoppers across its three chains (Gap, Old Navy, Banana Republic) walk out of the store without buying anything. Across retail, the walkout rate among peers can range from slightly over 60 percent to as high as 80 percent.
"There is a huge amount of that traffic today that is walking out the door where we feel there is a really big conversion opportunity," said Art Peck, Gap Inc.’s president, growth, innovation and digital. "They’re in the store. They’re facing a sales associate. For us to be able to say, ‘Oops, we screwed up. We don’t have your size and style, but we will have it to your house later today or tomorrow,’ or whatever else it is, we feel that’s a big conversion opportunity."
Although the details were vague, the service is expected to be free. Although shoppers will have an easy way to tap the service themselves inside the store, it’s expected to be driven by associates.
Glenn Murphy, Gap’s chairman and CEO, said such a program is one of the reasons it announced in February plans to set $9 as the minimum hourly rate for its U.S. workforce this year, with plans to lift the minimum to $10 in 2015. Mr. Murphy said, "We’ve got to get better people in our store, because order in-store needs a high caliber individual in our stores to close the deal."
Also as part of its omni-channel push, its reserve-in-store, which enables online and mobile shoppers to reserve items for in-store pickup, as well as its ship-from-store efforts, are being expanded this year. But Mr. Murphy called order in-store a "marketing opportunity to change people’s psychological belief" that they’ll likely endure an out-of-stock.
"We have that product," said Mr. Murphy. "It’s in another store, which is our mistake. It’s in the distribution center. And any distribution center, because seamless inventory is any distribution center. It’s opening up our inventory to everybody."
- Gap Inc. Outlining Advances In Omni-Channel Retailing, Global Growth And Supply Chain – Gap
- 2014 Investor Day Webcast – Gap
- Summary of Presentations – 2014 Investor Day – Gap
- CFO Presentation – 2014 Investor Day – Gap
- Gap to Raise Minimum Hourly Pay – The New York Times (tiered sub.)
How appealing will order in-store be to customers? What challenges, whether at the store or back-office level, will have to be overcome to drive the program’s success?