As Gap closes UK stores, a glimpse of the high-speed retail revolution
Yet another familiar fashion retailer is set to disappear from Britain’s Main Street. The once mighty Gap is the latest brand to lower the shutters. Following in the footsteps (and reduced footfall) of Debenhams, Topshop and many others, Gap’s shift to online-only sales is further evidence of the accelerating shift in consumer focus – away from physical stores and on our screens.
Gap’s latest move is striking considering that until 2008 the American company – which also owns the Banana Republic, Athleta and Old Navy brands, was the world’s largest fashion retailer. That year, she gave way to the top of the totem pole at Zara’s parent company, Inditex, and the years that followed were progressively difficult for companies like Gap. Over the past decade, for example, Gap’s sales declined as it sought to maintain an attractive mid-range product line at the right price. The retailer has come under increased pressure from low-cost fashion competitors – such as H&M and Primark – and rapidly growing online competition.
In the UK, clothing company Next remains a confident online leader, while Amazon and ASOS have increased their market share. Relatively smaller, more niche retailers, such as super-fast fashion firm Boohoo, also performed notably in the aftermath of the pandemic, as shoppers were forced to get their fix of fashion online when stores non-essentials have been closed. Boohoo’s acquisition of defunct trademarks, such as Dorothy Perkins and Oasis, along with other brand partnerships and diversification into the beauty industry, will further enhance the attractiveness of this business.
In addition, young consumers who could have trained a new generation of Gap shoppers are turning elsewhere – not only to e-commerce, but also to social commerce conducted on social media, where they can pre-shop and purchase clothes. and accessories, and engage in chat and entertainment after purchase thereafter. (Although, to be fair, Gap recently received a boost thanks to TikTok, where users went crazy for his High Rise Cheeky Straight jeans and #gaphoodie logo, causing sales to spike, according to Mary Alderete, Global Head of Gap Marketing.)
At the same time, these consumers do not fail to become active participants in the buying and selling of fashion items on secondary market sites, such as Depop and Vinted, marking another point of divergence from the previous generations.
In this rapidly changing fashion retail environment, US companies like Amazon, Walmart, and Target have experienced significant growth during the pandemic. However, others, including Gap, have found the online business environment more problematic. Gap’s online business – which will continue in the UK despite massive store sales – is not seen as a significant player and has not allowed the retailer to make up for lost business from closed stores.
Beyond the impact of COVID-19 on retail and the changing consumption patterns of Gen Y and Gen Z shoppers in particular, a deeper issue is at play for Gap: l identity of the brand and its position in the wider fashion market. Brand awareness among consumers is expected to remain high, but Gap fails to be the store of choice for most consumers and / or provide a great experience. Meanwhile, in its core mass market segment, new entrants have found success with more focused and ambitious offerings, and more engaging retail experiences.
Overall, brand touchpoints (i.e. where a customer comes into contact with the brand), which integrate online, mobile and physical sales channels, have become much more important to retailers. New technologies to personalize consumers’ shopping experiences and developments with augmented reality and virtual reality devices are paving the way for a more distinctive and innovative future. Gap hasn’t really taken these trends into account in the UK, and a successful sales and marketing formula based on a wide range of clothing for all ages at reasonable prices over many years is hard to change – because other mid-sized retailers, such as Marks & Spencer, I have found.
Yet the location creates an additional problem. At this point in the pandemic, retailers are starting to evaluate new formats and different locations. As consumers have returned to buying more locally, many retailers are looking for opportunities for smaller stores in more convenient locations. In particular, they began to explore ways to integrate stores into their online operations throughout the shopping experience. Gap’s premier locations, with their inevitably high rents and commercial rates, contribute significantly to its costs, while limiting its ability to try out new ideas.
With that in mind, perhaps it was an inevitable decision for the company to close its stores and focus on its online business, as Debenhams and others have inevitably chosen to do in the future. . And as consumers become more aware of sustainability and ethical issues in fashion production and consumption, perhaps now is the time to welcome new thinking about fashion and a different kind of store. .
Anthony kent is Professor of Fashion Marketing at Nottingham Trent University. (This article was originally published by Conversation)