For the first time in years, Gap is creating products that consumers are excited to buy; fashion bloggers are eager to see what they will come up with next; and financial forecasts see the brand as a stable, growing investment opportunity.
With profits pointing upwards and the acquisition of luxury brand Intermix at the start of the year, Gap Inc. is aiming to own a significant (and fashionable) part of the retail market, appealing to bargain hunters via their discounted outlet mall model as well as to the curators of trendy luxury apparel via and now Intermix.
Nowhere among the Gap Inc. family (Old Navy, Gap, Banana Republic, Athleta, Piperlime and Intermix) is this resurgence clearer than through the story of the company’s namesake brand where a corporate shake up, clear new vision and empowered employees have been able to turn a dingy suburban mall brand into fresh and trendy staples in every twenty-something’s closet.
How does a brand struggling with a long legacy of missteps manage to turn things around?
A lesson in what not to do: change your logo and hope for the best. This story really begins in October 2010 with a new Gap logo and a heated consumer-driven debate about the brand’s values. The traditional blue box logo was temporarily replaced with a cleaner font and a more “contemporary feel”. Gap wanted customers to see what the brand stands for in a modern age. Instead, the move felt inauthentic and like the clear result of a leader caught up in one too many branding meetings, fearful of making the full-scale changes necessary to revive the failing company. It wasn’t the logo on the outside of the stores that needed help; it was the clothing inside.
While in some ways, this seven-day logo swap adventure seemed like the final nail in the coffin of a long-loved American icon, it was in fact the moment something finally changed for the better. Along with an outpouring of criticism and anger came the realization that the Gap brand was still fully capable of eliciting passion in the hearts of their consumers. It was clear consumers wanted this brand to survive. They cared about its survival and offered criticism on the Facebook walls and Twitter streams of anyone who would listen.
In February of 2011, with the resignation of president, Marka Hansen, and the subsequent shift in marketing operations from San Francisco to New York the company entered a new era. After opening a “Global Creative Center” to centralize marketing, creative, design and production, and shuffling the corporate leader deck, things were suddenly very different at Gap.
But if 2011 had been about reorganization then 2012 would be about consolidation and rebuilding. The company closed nearly 10% of their American storefronts and refocused their brand image to reflect the brand’s more humble beginnings.
As it turned out things weren’t quite that simple. The company again reshuffled their leadership team. New hires and longtime leaders were realigned in each global market and the online business was given another major facelift leveraging digital tactics that ranged from a completely redesigned content strategy to robust influencer outreach campaigns. And let’s not forget new creative director Rebekka Bay replacing the company’s creative visionary Patrick Robinson.
In 2013 Gap is seeing promising positive results and posting a year-over-year increase in sales for the first time in almost ten years
But what is the lesson here? What does this turbulent restructuring story have to teach us about the nature of a comeback?
It’s not as simple as drafting a comeback blueprint based on the number of staffing changes or trying to read into the Gap’s advertising campaigns over the last few seasons. There is no instruction manual for a successful corporate turnaround.
What this story does tell us is a few simple truths. It highlights the intangibles, the characteristics of a great leader and the fighting spirit necessary to make something work when some critics believe you should just bow out of the race. A successful comeback is a credit to passionate leaders, bold enough to make the tough choices and consistently align a brand with its core – its core business, core team and core DNA. In some cases, like this one, that may take the form of a brand new leadership and creative teams and retail outlet downsizing to rework a tired product line. In others, it may look entirely different.
1/ Revisit your product. Understand its value. Be honest. Are you offering something that is otherwise missing in the market? Are there changes that could be easily implemented to really differentiate your business?
2/Think about design. And not just in reference to your product. How can your service structure be designed to be more efficient? And how might your marketing initiatives be designed to depict the true value of your products? Where can thoughtful design really make a difference from conception to execution?
3/ Root every decision in your company’s mission. For Gap, that meant returning to their authentic roots and simply selling stylish wardrobe staples at a reasonable price coupled with a marketing campaign that reminded customers that Gap is a company with a lot of heart.
4/ Find a balance between the practical and the creative. Know your company’s strengths and be realistic about their weaknesses. Diversifying your product offering is often much more difficult than continuing to rely on a simple core model. A clothing store shouldn’t simply begin selling avocados because it is a growing market for investment, but they can acquire a competing brand to round out their portfolio of clothing offerings across price points. Be creative, but realistic about the type of knowledge you possess and the type of business you can run.
5/ Leadership. A passionate leader is a non-negotiable ingredient to the success of a comeback. Someone who can see clearly through the confusion and disjointed decision making that allows companies to flounder in the first place. Someone who can clearly see how each line of decision-making interacts with the company mission.
Ultimately Gap was able to pull it off. The company is no longer clawing at an image of what they used to be; they are instead forging ahead with the strength of an entirely new and exciting project.