Wednesday, May 20, 2009
3 Elements of Gap's Retail Store Strategy:
(1) Target Market (customers' needs)
Gap has three distinct brands; each with its own target market and unique challenges. Banana Republic offers higher-priced clothing, Old Navy offers lower-price, and Gap falls in between. In 2007, Old Navy accounted for 42% of sales, with Gap responsible for 40% accounting for about 40%.
Gap has stores in Singapore at 4 major locations; Wisma Atria, VivoCity, Centrepoint and Suntec City. The Gap's brand main focus is on casual attire and targets consumers between the ages of 18 and 25. These are the places that most families and young Singaporeans like shop in. Additionally, Gap has store utilizing the brand which target narrower segments of the retail apparel industry, including GapKids, BabyGap and GapBody. Through narrowing down segments, Gap is able to cater to the different segment needs better and easier.
(2) Retail Format (method for satisfying needs)
Their retail format is specialty stores. The definition of specialty store is a store, usually retail, that offers specific and specialized types of items. These stores focus on selling a particulat brand, or a particular type of item. Sometimes it includes chain retail stores that sell a specific brand of clothing. This would make retail outlets like Gap, Old Navy, Eddie Bauer, and Victoria's Secrets specialty store, because all the clothing sold there is manufactured specifically for that store. If you buy something From The Gap, it will have a Gap label.
Through setting up these stores, they are able to reach out to their customers effectively. Customers will know where they can get their apparels they want easily instead of searching high and low the departmental stores just for a piece of apparel they wish to purchase. They can also cater to their customers' needs better as they are able to get first-hand feedbacks from customers on ways to improve on their stores.
(3) Bases for Building Sustainable Competitive Advantage
(defending position against competitors)
There are 2:
Location
-More centralised & at popular shopping malls eg Wisma Atria & Vivocity
-Reach out more to their target market (families mainly middle-income & above)
-Even at the shopping malls itself, GAP outlets are located at strategic locations,where people have to pass-by in order to get to the other end of the shopping mall
Exclusive Merchandise
-Exclusive merchandise every few seasons
-Cater to customers that prefers unique products (eg last seaso's "White" campaign)
-Environmentally-friendly(eg "Go Green"campaign)
;5:55 PM
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