The Era of Gap’s Mass Appeal Is Over—But Specialization Could Bring the Brand Back

The Era of Gap's Mass Appeal Is Over—But Specialization Could Bring the Brand Back

Twenty years ago, few brands in American fashion were bigger than Gap. His signature logo hoodies were ubiquitous in high schools and college campuses, and Gaps Marketing attracted big names, with stars like Sarah Jessica Parker and Madonna running the campaigns. But perhaps Gap’s influence was nowhere more evident than in malls all over America, where his stores populated malls from coast to coast.

Cut to 2020: American mall is a dying breed – a 2017 Credit Suisse report forecast that between 20% and 25% of malls in the U.S. will close by 2022, a number likely due to Covid-19 Pandemic has increased. And as the mall has declined, so has Gaps’ influence.

The great recession weighed on Gap’s sales and started closing stores in 2011. Although it rose again in the early 2010s, sales began to decline again in the second half of the decade. Sales were already falling before the pandemic – in the first quarter of last year they were down 10%. In late 2019, Art Peck, CEO of Gap Inc., a 15-year-old Gap veteran who held the top spot for five years, abruptly left his post and CMO Alegra O’Hare, who had been with the company for less than a year, abruptly left his position. announced its departure in January, and plans to spin off affordable retail brand Old Navy were abandoned that month.

Then came the pandemic that left few retailers unscathed. Gap has suffered, and sales fell 43% in the first quarter of this year (though sports brand Athleta was a ray of hope for the company). In late October, Gap announced plans to close 350 stores, or 30% of its North American presence, including the San Francisco flagship. Perhaps more notably, within three years, 80% of storefronts will be outside of the malls, once Gap’s home base.

Nowhere was Gap’s earlier influence more evident than in malls across America.Getty Images

But Gaps suffering cannot be attributed to its presence in shopping malls alone. And while the pandemic certainly didn’t help, it didn’t either. Rather, the retailer suffers from a loss of identity. According to Bob Phibbs, CEO of consulting firm The Retail Doctor, trust in the mall is certainly surmountable in the past, but other brands like Lululemon have proven that shoppers will still go to the mall to visit a store they like love.

“To say it’s the mall’s fault is exactly the wrong thing to do,” Phibbs said. “Quite simply, they became an advertising brand.”

In this sense, gap problems are ambiguous. Some of his compatriots and competitors like J.Crew, who filed for bankruptcy earlier this year, face the same challenges: customers expecting discounts, a crowded category thanks to DTC challengers, and, at its core, a brand that has lost sight of what it is is and for whom it is.

“There has been a big problem with your brand and that ambiguity at this stage,” said Kalinda Ukanwa, assistant professor of marketing at the University of Southern California’s Marshall School of Business. “What do they stand for and how are they relevant to the target market?”

What Gap is up to is a legacy to rely on. The brand was founded in San Francisco in 1969 and has long been synonymous with high quality staple foods, especially denim. Mary Alderete, who was tacitly named Gap’s new CMO in February after O’Hare’s departure, said the story will be a boon to the brand. Her first major campaign as CMO, launched in early September, focused on this Americana aspect of Gap’s legacy. The “Stand United” campaign included virtual activations and events to promote voter registration. Brand positioning, Alderete told Adweek at the time, “was this idea of ​​culturally relevant expressions of modern American optimism.”

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