The Gap Roller Coaster Guide

Topics: Millard Drexler, Gap, Banana Republic Pages: 5 (1397 words) Published: February 28, 2013
The Gap Roller Coaster Ride
Sharon Sethi
Merchandising Strategies
12:00pm, Tuesday

Gap Inc. began its journey in 1969 as a small retail store in San Francisco, California where it concentrated its sales on Levi's jeans. In its early stages as a small retail business it was known as The Gap. By the end of the 1970's, Donald and Doris Fisher, owners of The Gap, had expanded The Gap to six stores. The company went public in 1976. By the early 1980's, The Gap had over five hundred stores; largely targeting a teenage customer base. In 1983 the Fishers hired Mickey Drexler as Gap Inc.’s new president; shortly after, Gap Inc. purchased Banana Republic. This purchase rescued the struggling company from financial distress with Drexler revamping it’s clothing line and turning Banana Republic profitable once again. Throughout the late eighties and early nineties Gap Inc. expanded to form Gap Kids (1985), Baby Gap (1990), Old Navy (1984), and Gap Body (1998). Gap Inc. also became a world wide retailer by opening stores in London, England and Vancouver, British Columbia in the 1980's. Gap Inc. became an online retailer in 1997 by forming and offering its products to consumers worldwide. Gap Inc. currently employs over 160,000 employees and has approximately 3,100 stores world wide, including Canada, United Kingdom, France, Japan, Germany, Asia and of course the United States. Gap Inc.'s customer base includes men and women of all ages. It offers clothing in a variety of styles and sizes, accessories, and personal care products. Gap Inc.'s main headquarters are located in the San Francisco Bay area, while its product development offices are located in New York City, New York. The Gap was bound for success early on because the utility of its product mix was perfect for a specific market segment. The Gap offered a classic line of khaki pants and cotton button-down shirts, perfect for the new "business-casual" look, and gained great brand recognition as a result. Unfortunately, as we all know that in the recent times Gap has had major decline in their sales and a loss of customer loyalty. Thesis Statement:

In the age of mass luxury and two Americas, Gap Inc. fails to provide quality product, and a clear target customer for it’s product. To move a step closer to survival and revamp its reputation in the industry the company must change the product line and segment its target customer appropriately to reflect the original Gap ideals. Action Point 1: Target Customer

I visited the Gap store at The Grove twice in the last week to observe the customer that shop at the Gap and to gain a basic knowledge of what type of merchandise the store carries. To my realization, I figured that the biggest part of Gap’s problem was the image of the company’s brand and its target customer. I remember loving the Gap more than a decade ago. It was considered “cool” and “fashion forward.” Wearing a Gap sweatshirt was like rocking a Chanel bag. It’s unbelievable that such a stellar company, that created so much hype, struggles to offer inspiring assortments today.

I do not think that Gap is perceived as a “cool” place for the high school or college age kids to shop at, and that it is mainly attracting shoppers in their 30s and 40s as opposed to its 20-year old target customer. Gap is spreading itself too thin, trying to appeal to too wide an age range of shopper, and missing some of the fashion in the process.

In my opinion, Gap’s target age segment should be male and female ranging from seventeen to twenty-five years old. The typical family life cycle for a Gap customer should comprise of single teenagers and young adults to young married couples. The ethnicity that Gap targets consists of many minorities such as Hispanics, Asians, and African-Americans in addition to Caucasians. The income segment is...
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