Gap announced recently that their same-store sales have declined for the 12th consecutive quarter, a stunning run of — well, is it bad luck, bad merchandising, bad choices, or what?
(Despite the decline the company does continue to make a profit, but same-store sales declines bode ill for the future.)
As a part of its ongoing effort to turn things around, the company recently hired a new CEO, Glenn Murphy, who comes not from the fashion industry, but retail.
What would you do if you were Murphy?
Well, one of the first things I would look into the possibility that the Gap’s problem isn’t fashion, it’s demographics. Like Levi’s, another struggling brand, the Gap’s roots are in the sixties. Founded in 1969, the company hit its stride in the 70′s and 80′s carrying the image of rebellion for a generation of young people.
But those people are now too old to care about the brand, and younger customers have made other choices. Rebellion is not what it used to be.
It’s not the first time this has happened – actually, it happens all the time. Sears, for example, dominated American middle-market retail until it lost contact with its customers, and Wal-Mart stepped in.
And remember Oldsmobile? GM laid this brand to rest in 2004 after 107 years, but it wasn’t all down hill. In fact, the Olds Cutlass was America’s #1 selling car in 1976. So somehow between a rousing success ’76 and the decision to shut the brand down in 2000, the company completely lost its way. Or perhaps it merely followed its target customer demographic right into the grave.
Now it seems that unless something significant changes, the Gap is doing the same thing. Can Murphy can lead a process of innovation that will create the clothes attractive to a new generation of customers? Or is it just a matter of time until the music’s over?
{ 3 comments… read them below or add one }
How did you all decide to come together and do this blog?
The problem that Gap and Levi Strauss both have is the same problem that Abercrombie and Fitch will now face (being the new Gap). How to still be a top brand ten years from now?
Braden Kelley
BloggingInnovation.com
Yes, I agree completely. Some brands die, but not all do. The question that’s really interesting is why some do and some don’t, and then if you were in charge of managing one, what would you do to keep it from deteriorating. They haven’t figured this out at Gap; Levi’s managed to keep it together for a long time.
Don’t forget that Levis lost for a while – during the 80s when designer jeans were all the rage. Levis stuck it out and won out in the end, though. They were persistent, consistent, and are *the* standard by which everyone else is measured. One could say that is why Firefox is coming back, since they’re basically Netscape (the standard), and why Apple still holds on by very bitten fingernails (the GUI standard for desktops). Google didn’t become popular because of AdWords – it was popular because it did basic search well, and AdWords came second.