Gap Tackles Global Expansion With E-Commerce, Omni-Channel Retailing
By Hannah Ash, contributing writer
Gap Finds Social Shopping & E-Commerce Niche In China
Omni-channel initiatives are paying off for the Gap, as it takes on the Chinese market — in 2011, the retailer became the first of its kind to launch an international e-commerce platform in the country in addition to launching several brick-and-mortar stores. American malls may be closing in large numbers, but at least one of the biggest mall-based retailers is getting creative to stay ahead amid changing consumer trends. In 2014, Gap plans to open up 25 Gap stores in China, in addition to 10 Gap outlets, driving the retailer’s Chinese stores to a total well beyond its current 80. With expansion plans in place for the brand also comes a certain level of corporate introspection as the retailer tries new strategies and responds to what works — and what doesn’t — in a foreign market.
One key way in which Chinese shopping trends differ, notes Jeff Kirwan, president of Gap’s China division, “What’s distorted in a positive way is that people shop in packs, so it’s a very social situation and in many parts of the country, because of the climate, malls and shopping centers become a social environment.” As a response, Gap has catered its Chinese marketing campaigns to appeal to the Chinese consumer and the group with whom it shops. Stores are located in shopping centers and places where people congregate. Kirwan goes on to state, “In places like Harbin, where we are looking to expand, the social environment is the mall. They also shop more frequently and continually shop at our stores and our competition. And that puts a lot of pressure on us to be good and current and new and to showcase our product.”
Gap credits its strong e-commerce channel as a possible reason its expansion into China will be met with success. Kirwan comments, “We have a strong competitive advantage when it comes to e-commerce. Our strength resides in multiple brands and multiple channels and that's a strength that most of our competitors don't necessarily enjoy. [The Chinese market] is unbelievable. Everything about the e-commerce space here is on fire. We're achieving strong [same-store sales] here, and we're experiencing very large growth in our e-commerce business.” The retailer is still in a time of market exploration, as Kirwan said it has introduced a large variety of different options and will let the sales of said items drive future inventories. Gap is clearly on a mission to find the customers wherever they are and to cater to them in ways that work best for their lifestyles.