Is This a New Look for Gap?

Gap's new ad campaign showcases Rebekka Bay's inaugural collection and targets omni-channel customers. Will Gap's efforts bear fruit?

Mar 5, 2014 at 9:12AM

It's been over a year now since Gap (NYSE:GPS) scooped up creative director Rebekka Bay from Cos, H&M's more sophisticated sister brand. On Feb. 18, the 45-year-old specialty retailer presented its spring 2014 campaign, showcasing Bay's first independent collection for the brand.

The campaign, titled "Lived-in," features talented, rising artists. It is meant to feel relaxed and authentic, as if the models are wearing their own everyday clothing.

Is it just the same old tees, khakis, and denim Gap has a reputation for, or did Rebekka Bay take a fresh look at the brand's iconic pieces? More importantly, could this campaign be a money-spinner? 

Gap Spring

Gap Spring/Summer 2014 Collection, featuring British singer/songwriter Birdy

'Lived in'? Yes. 'Unlooked for'? No. 
This first line developed by Bay maintains Gap's signature style. It doesn't test the waters in a daring way; it's more of a back-to-basics take on the brand's core pieces, and that was Bay's intention. "The real inspiration came from Gap," Bay told Elle magazine. "My starting point was actually the icons. So we know half the collection already, and it's more of an exercise in how to apply seasonality," she added.

While the looks are not a sea change and might lack a "wow" factor, they do get to the root of casual and effortless style Gap is all about. In the fashion world, style identity is no laughing matter.

It's also a complete and cohesive collection for all divisions, encompassing all product categories. The new collection doesn't just include womenswear, but also kidswear and menswear. That's crucial given that in recent years, men have shown a keen interest in dressing fashionably.

Tackling omni-channel retail
While the campaign looks down-to-earth and easy-going to break loose from Gap's traditional flashier celebrity-oriented ads, the company is getting ritzy with the way it's promoting. It teamed up with high-fashion glossy Vogue on the first-ever tactile fabric ad, which will appear in the magazine's March issue and includes a fabric logo made from the cotton of a worn-in Gap tee. The "Lived-In" print ad campaign will also be displayed in March issues of national magazines, across Gap's social media channels, and outdoors in cultural hubs of key markets.

"Lived-In" comes just a few months after the company's "Back to Blue" campaign, which was Gap's first serious attempt to pursue an omni-channel strategy. That campaign was designed to integrate offline and online platforms and offer shoppers a more joined-up, seamless experience.

The "Back to Blue" campaign included print and outdoor advertising, in-store promotions, digital marketing, social media, and a return to TV for the first time in four years. Gap specifically targeted Tumblr mobile users by launching a digital art contest. The winning works were turned into Tumblr mobile ads, making Gap the first brand ever to own all of Tumblr's mobile ads for a whole day.

Though it's too soon to tell whether Gap's efforts to create a competitive advantage through omni-channel initiatives are going to bear fruit over the long term, the short-term results are promising. Over the last quarter, online sales, which include omni-channel purchases, edged up nearly 16% year-over-year.

Looking ahead
Going forward, Gap has several omni-channel plans in the works. It pins its hopes on its "Reserve in Store" program, a game-changing service launched in June and further expanded last November that should build a bridge between digital and physical channels. The service allows shoppers to reserve items online and pick up the merchandise at the store within 24 hours, without requiring any up-front payment – a key difference from other competitive "pickup" programs. Gap intends to spend a lot of marketing dollars on this service aiming at increasing brand awareness, especially among millennials, as CEO Glenn Murphy pointed out during the latest earnings call.

Gap has also set its sights on maximizing customer engagement by personalizing the online shopping experience as much as possible. Serving up homepages that resonate with customers based on their previous purchasing decisions and making sure that images and ads catch their eye regardless of the device they are using are just a couple of initiatives that Gap thinks could take its online business to the next level.

Final thought
Gap has been mired in stagnation for over a decade. Amid the rise of "fast fashion" retailers like Zara and H&M and fierce competition from specialty retailers like J. Crew and Club Monaco, the company somehow lost its mojo and failed to grow revenues. In the fourth quarter ended Feb. 1, Gap's same-store sales—or sales at stores open at least a year—increased just 1%.

Nevertheless, Gap's focus on pursuing an innovative omni-channel strategy in earnest, along with Rebekka Bay's efforts to reinvent the brand without jeopardizing its style identity, could be a recipe for success.

The long term
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Fani Kelesidou has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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