This is an encounter by one of their customers:
"I like their customer service because they do not fuss over you like some stores do. They give you the space you need to browse through without being stalked - means we had the freedom to roam around the store with ease and of course they're ready to help when you need them."
From the statement above, we know that Gap is always ready to serve their customers when they need help. From these good comments they receive from their customers, Gap is able to know and maintain their service standard. They know where they are at and what the customers think of them.
By knowing that Gap does good customer service, this results in the customers coming back for more in their next visits and they will also spread good word-of-mouth.
Merits of customer service approaches adopted by GAP:
- Greeters at the door
- Stock transfers/ reservations
- Training
- Communications mix
- Advertising
- Sales promotions
- Web sites
- Store atmosphere
- Publicity
- Personal selling
- Word of mouth
Gap uses the Free-Form Layout. Their fixtures and aisles are arranged asymmetrically to create a pleasant and relaxing ambience for their customers.
Physical Store Attributes:
- Air-conditioned
- Very bright lighting
- Music in the background
- Store portrays a very clean and spotless image
- Spacious store leads to ease of movement through the aisles (wide aisles)
- Resting areas/benches for shopping partners
The clean and spotless image that Gap stores portray also tells us what kind of products they are offering to their customers.
- Gap sells smart casual type of clothing & also very casual type of clothing.
- The kind where you can wear for formal parties as well as nights out in town.
- Trendier business clothes
- Target market: men, women, children
- They create their stores in such a way that their stores are wide & spacious to cater for their customers who are made up of women with their children in tow.
It is easy for the customers to find the clothes that they want in the store:
- The front is made up of more of their casual items such as shirts.
- Deeper into the store, you can find items that are more for formal wear such as trenchcoats and dresses.
- One side towards the wall consists of shoes.
Gap is also flexible:
- Able to physically move store components
- Able to modify components
- Able to respond to seasonal changes
- Able to renew without large-scale renovations
3 HR practices carried out by retailers which are unique in Singapore:
(1) Retraining employees
Successful Asian economies have concentrated on retraining employees and providing new job skills to enhance long-term employability rather than life-time employment.To provide competitiveness in their staff so as to compete with other companies, they send their employees for courses to enhance and upgrade their skills.
By retraining employees, companies are not sacking their staff. Instead, they are giving a chance to their staff to learn something new that will be of importance to them, especially in this highly competitive retail environment. Everyone has to know and be updated on the latest retail information and be IT-savvy at the same time. They also have to know what the current consumers are like so that they can serve their customers better.
Characteristics of the new & current consumers:
- Sophisticated
- Informed
- Want a variety of choices and options
- Pressed for time
- Value
- Convenience
Thus, by retraining their employees and staff, they understand the current consumers better and will therefore be more aware and serve their customers better.
(2) Hiring temporary workers
Due to the nature of our business and the long production cycle which requires head count flexibility, the hiring of temporary workers is seen as the most creative, cost effective
method to increase efficiencies around the flow of the production cycle.
Pros: Temporary workers can be a win / win situation. They come in handy when you need them, their work (ideally) is based on specific deliverables, they may be paid a lot more than other staff in exchange for their short term work schedule but they do not become eligible for benefits and therefore do not contribute to claims or rewards.
Cons: Temporary workers are denied benefits, training and other perks under this status when actually they should probably be considered for a more full time position after a certain number of months (six was the suggestion) or be deemed no longer temporary. It is not considered ethical to deny them benefits and other perks as temp
workers after a certain period of time has passed and they are clearly no longer temporary. Most temporary staff might not want to commit fully to the job and therefore do it half-heartedly. Other than that, they might not have the enough knowledge required for the job. All these reasons might affect the customers' perception about the service provided by that company.
(3) Bonuses, incentives & encouragement
Paying our bonuses or having any kind of variable compensation plan can be either
an incentive or a distraction, depending on how it is administered and communicated. Bonuses
must be designed in such a way that people understand that there is no payout unless the
company hits a certain level of profitability. Then, additional criteria can be the team’s success
and the individual’s success.
Pros: It is based on performance andcriteria is consistent for everyone, it
motivates employees to do the best of their ability and makes people more team focused.
Cons: If not communicated well, the success of one team and therefore larger payout, can be
perceived as unfair treatment. People can feel that they are not in control of the external factors that may impact the bonus in a given year (e.g. the economy).
Companies in Singapore have been known largely to provide their staff with incentives as a form of encouragement and motivation for better work rate and efficiency. Incentives can be in the form of monetary or non-monetary. Monetary incentives could include bonuses, holidays (vacation), hotel stays, etc. Non-monetary incentives could include praises that are given to their staff for their commendable effort at work, not forgetting their hardwork in which their staff has put in. Highlight those who have performed well in their work through Reward Ceremonies or during company's Dinner & Dance.
With these incentives, for example giving their staff a 3 days 2 nights stay at a hotel or giving them a free accomodation for a vacation, the company is actually helping their staff to de-stress themselves. When they return from their vacation, they will be all freshened up and relaxed and will start work with a fresh mind and body. In this way, they can work better and have a happier and relaxing mood. This helps their staff emotionally and physically (state of their body and mind).
The 2nd component of the Marketing Mix is price.
Gap adopts the High-Low Pricing Approach. In high-low pricing, a retailer charges high prices but then runs frequent promotions in which prices are temporary lowered. Gap does the same. They have frequent promotions every now and then to lure their customers into buying their products. One of their shirts can cost $40+ but during a promotion, it is significantly lowered.
At Gap Inc., they offer discounts at all of their brick & mortar locations. For example, they may offer a buy one shirt and get the 2nd half off sale. Gap is always using this type of advertising to increase sales. This brings loyal customers and new customers into the stores. The new customers get to try the product at a discount and if they like it, they can buy more.
Gap also does relationship pricing. With relationship pricing, customers have incentives to be loyal - get price incentives if you do more business with one firm. As for Gap, they focused on getting their customers to be loyal; meaning they are focusing more on retaining their customers than getting new ones. For example, the credit card case. This relationship pricing occurs in a nonprice competition, where firms focus more on building brand equity and relationships with customers. In this relationship pricing, Gap uses price as a method to build long-term relationships with their best customers. Gap focuses on giving better deals to better customers. The goal is to price relative to the value of the customer to the firm, while building loyalty and stimulating repeat buying. Like in Gap's case, they usually have sales and promotions every now and then to attract their customers to purchase their products. Gap sets their price at quite affordable prices for their customers.
Gap succeeds in the huge variety of style that it offers. Whether it is a simple classic black t-shirt or a more modern example, complete with logo, Gap consistently supplies quality at an agreeable price.
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