GAP, the originator of the trend that was once regarded as a learning object by UNIQLO, when did it become popular?
On Zhihu, there is an interesting answer about why the American clothing brand GAP does not perform well in the Asian market: It is probably because I am too short and the size of GAP is too large. big.
This sentence is certainly a joke, but in a way it is true: Uniqlo, which once used GAP as a learning object, has surpassed Zara in market value and become the world’s No. 1 brand. is a clothing brand, but most people’s impression of GAP is still that hoodie with a big “GAP” logo printed on it.
On March 9, Bloomberg quoted people familiar with the matter as saying that GAP was considering selling its Chinese business to adjust its operations in China.
In fact, observing GAP’s trends in the past year, we can find that this may not mean that GAP will completely abandon the Chinese market.
In 2020, GAP opened a total of 26 new stores in China, mainly in new first- and second-tier cities, and the time is not far away – November and December Each month GAP opened 5 new stores, and from the end of January to the beginning of February, 3 new stores were opened in a row. Starting from the second half of the year, GAP has also signed franchisees in multiple regions and currently has nearly 220 stores in China.
It seems unreasonable to say that it has already planned to withdraw from the Chinese market, but the pace of opening stores has become faster.
The answer may be hidden in the three-year reform plan proposed by GAP in October last year. At that time, GAP had a clear plan to transform into a business model that combined e-commerce and non-mall offline stores. It is estimated that by 2023, 80% of the company’s revenue will come from this channel model. GAP’s latest financial report data for 2020 shows that online sales increased 54% year-on-year to US$6 billion, accounting for 45% of overall sales, compared with only 25% the previous year.
From this perspective, it seems to be much easier to explain – it may also become a strategic adjustment and change of thinking in attacking the Chinese market. Considering selling offline business and vigorously developing online e-commerce business is more like a part of its plan that may be implemented.
Taught Uniqlo to starve GAP
Nowadays, when many people mention GAP, they shake their heads and complain that it is “fashionable and expensive”. However, in the United States in the 1980s, GAP was once synonymous with fashion.
It was an era when hippie culture was popular. The Fishers, the founders of the GAP brand, targeted young people and launched “GAP” (English for “generation gap”) The name is meant to emphasize the differences between the baby boomers (born 1945-1964) and their parents. The American casual style it focuses on aims to provide young people with cheap and fashionable “all-in-one dressing solutions”, such as round-neck T-shirts, pure cotton tops, jeans and other wardrobe basics.
Looking back, there are two reasons for GAP’s earliest success: First, it met the needs of young people in the context of the times and grew into a national trend at that time. brand; secondly, it pioneered the SPA model and established a strong moat for itself.
SPA model is a unique model that is integrated from design, production to retail, and all links must be intervened and controlled. This model is no longer unfamiliar to today’s fashion circle, but at that time, GAP relied on this model to establish its “status in the world” and ushered in an era of glory.
In 1982, GAP acquired the Banana Republic brand and founded the Old Navy brand in 1994. Together with the company’s GAP brand of the same name, it formed a brand matrix covering all high, middle and low-end price points.
In the North American market at that time, GAP was the well-deserved number one in the industry. Data shows that from 1989 to 2000, the company’s number of stores increased from 960 to 2,848, with an average annual compound growth rate of 11.48%; sales increased from US$1.587 billion to 13.673 billion US dollars, with an average annual compound growth rate of 24.03%; net profit increased from US$97.63 million rose to US$842 million.
In the 1990s, Uniqlo founder Tadashi Yanai went to the United States for inspection and saw the GAP company’s model. He immediately decided to introduce this model to Uniqlo, and thus changed Uniqlo. In other words, Yanai is the master of the Japanese SPA model. He stole the SPA model from GAP, and then carried it forward in the hands of Uniqlo.
For a long time, GAP, which focuses on American leisure, has been constantly compared with Uniqlo, which focuses on Japanese leisure. But once upon a time, Uniqlo had almost no advantages except being cheap. Until the 1990s, UNIQLO was committed to the research and development of technical fabrics. Through continuous improvement, it liberated itself from the reincarnation of the fashion circle and gained market recognition with a few items that had almost no changes.
In the following years, the brands that learned the SPA model from GAP can be said to have succeeded one after another and developed multiple iterative versions. Version 2.0 is a popular basic Japanese SPA represented by Uniqlo; version 3.0 is Zara and H&M, which have developed civilian fast fashion to the extreme.
The SPA model that GAP is proud of is constantly being redefined by latecomers. Its situation became increasingly embarrassing, and its performance began to decline. Compared with Uniqlo, Uniqlo has a clearer positioning, and various joint marketing is ultimately aimed at selling basic models. GAP’s product line is wider, including sweaters, jeans, shirts and even wedding dresses, but it doesn’t let users remember.Own Tmall flagship store. Different from some international brands that focus on physical stores first and then e-commerce, GAP’s business model in China initially adopted a method of placing equal emphasis on physical stores and e-commerce. This also reflected its early global strategy of placing equal emphasis on e-commerce and physical stores. status related.
As early as 1997, GAP established an online mall using gap’s website address to bring a more convenient shopping method to American customers. In 2010, GAP entered China to open a brand flagship store and also set up an official website. In March of the following year, it became one of the first batch of merchants to log on to Tmall. Its sub-brand Old Navy also entered Tmall when it entered the Chinese market and opened a store in March 2014.
It is understood that in addition to its internal team, its Chinese e-commerce department also has a team from a third-party operating company, and the structure of the entire Greater China company is also It is divided into two parallel operating teams, online and offline, plus basic support departments such as human resources and finance.
Targeting on the Chinese market and betting on e-commerce are the basic skills of a brand. GAP has been trying to open up all channels for a long time. As long as a product store has inventory, it will display how many stores also sell the product. Through mobile LBS positioning, stores closer to consumers can appear first. Through this service, consumers can also search for nearby stores on the web and go to the store in person to try on and purchase, thereby completing traffic diversion and reducing inventory pressure.
At present, GAP is still actively developing its online layout. The brand has established an official website, mini programs, 11 channels such as Tmall and Vipshop, and Establish a DTC (direct to consumer) system to face consumers directly. Since last year, GAP has also cooperated with Viya 11 times in 6 months. According to media reports, more than 10,000 people have paid for the two GAP products labeled “Viya Recommended”.
Today, GAP’s online sales account for 45% of the overall sales – this ratio is already very high. The plan of Zara parent company Inditex Group is that by 2022 Annual online sales will account for more than 25% of total revenue.
For GAP, it may have reached a new stage of decision-making. Cutting off the offline business that is a heavy drag on it and focusing on transforming online will allow it to concentrate more energy. Now, re-establishing the brand’s tone is even more important.
Last year was the tenth anniversary of GAP entering the Chinese market. GAP signed a 10-year cooperation with Yeezy founder Kanye West. The two parties will open a new Co-branded Yeezy GAP. The previously exposed Yeezy GAP first series is scheduled to be released in 2021, focusing on modern, high-end neutral basic models. According to people familiar with the matter, GAP’s expectation for the Yeezy GAP product line is that annual sales will reach US$1 billion by the fifth year of cooperation.
At the end of February this year, GAP announced a plan to invest US$140 million to open a customer experience center in Texas, USA, scheduled to open in August 2022. It will be fully operational by the month. This project is to serve the growing number of online customers. The goal is to solve the problems encountered in the rapid growth of online business and speed up product delivery.
Shift the focus of channel operations to online, and at the same time initiate reforms in product design. From a series of measures, it is not difficult to see that Gap wants to reshape its brand Tonality and regain the ambition of young users. As GAP CEO Sonia Singal said, “We faced the most difficult year in our company’s history, but across the industry, our teams demonstrated resilience and determination as we overcame unprecedented disruption in our industry. Sexual changes lay the foundation for long-term growth.”
Users can age, but fashion brands cannot. For GAP Company, how to win back the hearts of young people is a proposition that needs to be solved without delay.
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