Each company can experience crises or challenges depending on the internal or the external environment. However, how it manages to change based on consumer demand or new trends is what influences the outcomes. An analysis through a brand audit reveals the potential challenges and opportunities that correlate with current trends. Further, as a result, a list of recommendations is provided that will help the company improve its position and take a competitive place. For this scientific paper, the GAP brand was chosen, which, in light of its recent activities, can be described as a failing brand.
Business Model
GAP applies a business model that can be described as cost leadership. This organization sells clothing and accessories, positioning itself as a stylish brand at affordable prices. At the beginning of its journey, the company was marked by a remarkable rise in popularity. However, she has started to face some problems over the past few years. One of the main problems was the preservation of market share in the United States and on the world stage and the subsequent decline in profits from sales of goods. Now, GAP is trying to keep its place in the clothing and accessories market, but this presents some difficulties.
Key Partnerships
A newly-acquired ally worth mentioning is Yeezy, a popular brand that is relatively new yet somewhat revolutionary in the fashion industry. GAP and Yeezy have recently signed a 10-year contract for cooperation (Maheshwari, 2020). Since Yeezy, while having a higher price range for their goods, is popular based on the brand’s reputation, the deal can become an effective advertisement. In addition, to improve the current situation, the company has resorted to establishing partnerships with such a program as the ILO “Better Work” (Brown, Dehejia and Robertson, 2018). Such initiative has become a representative of the brand in different countries and is considered one of the key alliances for the organization (Pike, 2020). This partner contributes to the implementation of the solution to problems arising in stores located outside the United States of America.
Strategic Initiatives
The strategic initiative of GAP is a differentiated approach. It provides the brand with the opportunity to sell casual clothing and various accessories at reasonable prices. With the help of this strategy, the company used to have an excellent reputation and a high place on the market (Venusita and Dyani, 2018). Moreover, this approach can still allow the company to reanimate itself and avoid the status of a failing brand.
It is worth noting that the company has made several attempts to improve its position, but they have not all been crowned with the expected positive results. Based on the new strategy, the brand is closing more of its stores, which are characterized by particular inefficiency and low profitability. Thus, the strategic intent to revitalize the company’s branding has not been effective.
Core Competencies and Brand Personality
The main advantage of GAP and its core competence is a clear definition of the value of self-expression as a trend and an expression of individuality. At the beginning of the journey, the company was considered an American cult brand. However, with the emergence of an increasing number of competitors who offered more opportunities and advantages for buyers, GAP has lost its relevance. Based on the relatively high quality and the price that is lower than most yet not entirely affordable, the position is somewhat in the centre of the positioning map.
Consumer Wants and Needs
The demographics of the GAP brand are mainly men between the ages of eighteen and thirty. The brand operates in mass-market, thus having the capacity to make multiple items at a low cost. Therefore, the company’s primary goal is to sell clothes and accessories at affordable prices. The company uses the principle of segmentation to determine the demography, geography, and psychological and behavioural segment (Camilleri, 2018; Liu et al., 2019). The brand is focused on attracting a particular segment, which consists of teenagers and youth (Athleta doesn’t ignore older women, 2017). Considering geographical segmentation, the brand primarily focuses on the US, Europe, and Asia. Psychographic separation implies orientation towards creative, artistic, yet somewhat introverted minimalists since the casual clothing and the lack of overly glamorous attire are often the choice of those who do not want to draw attention.
Based on Keller’s brand equity model, in order for an organization to learn about its connection with the target customers, it is essential to analyse the resonance, response, meaning, and identity of the brand in relation to potential buyers. GAP’s brand identity, or what distinguishes its clothing from one’s sold by other companies, is illustrated through casual attire. The reliability of the products, hence the performance, is higher than those of cheaper clothes. However, it is certain that it is mid-range since it cannot compete with the performance of higher-quality items. While also simple and relatively minimalistic, the imagery is the company’s strong point as many other brands follow trends without providing their consumer with more basic items. The response is low since GAP has not been successful in maintaining a high position on the market, and multiple stores around the world have closed already. Last but least, the customers cannot fully resonate with GAP due to the fact that the growing influence of social media impacts people into purchasing more trendy clothes while the brand is known for minimalism.
Based on the preliminary analysis, GAP’s user persona is a young male from the US, since males are statistically more likely to prefer casual clothing. He is around 25 years old, values comfort instead of high fashion, and is somewhat minimalistic. While GAP is relatively affordable, the clothes are more expensive than ones provided by other brands such as Forever 21. Hence, the young man invests in his appearance without trying to draw attention by wearing the newest fashion trends. He is creative, innovative, and somewhat introverted. Moreover, he is a typical young American with interests such as technology, art, and social media.
Market Definition and Attractiveness: The Industry Characteristics
GAP operates in the retail industry, which is engaged in the sale of clothing and accessories for men, women, and children. The industry includes enterprises that produce clothes for all occasions (Backs et al., 2020). Demand in this industry strongly depends on fashion trends and the level of the financial well-being of buyers. In addition, the retail industry is highly dependent on the level of customer service, inventory, marketing, and advertising.
It is also worth noting that the retail industry is characterized by a large size and number of competitors in the market. In this area, there are both small businesses and large global retailers. Larger stores such as GAP, having already achieved the necessary degree of customer service, attach paramount importance to the implementation of advertising strategies to increase sales and revenue.
Size and Growth of the Industry
As already mentioned, the clothing and accessories sales industry is a large sphere of activity, and thereby it can be characterized by multiple actors. Sources indicate that “the global apparel retail market had total revenues of $1,206.2bn in 2020, representing a compound annual growth rate (CAGR) of -2.2% between 2016 and 2020” (Global apparel retail industry guide 2021, 2021, para. 2). Moreover, it is noted that the market for the sale of clothing and accessories expects growth in the aggregate average annual growth rate.
Another key trend is the growing tendency to appeal to goods on online platforms. This became especially popular when the coronavirus pandemic occurred, after which all stores were closed. In addition, it is more convenient for consumers to make purchases from home via a computer or phone. GAP is relatively unsuccessful in monetizing its online presence, which is one of the challenges of the corporation.
Industry Competitiveness
The fashion industry is becoming more competitive every year. This is due to the fact that an increasing number of retailers and marketplaces appear on the market (Mehrjoo and Pasek, 2016; Bellemare, 2018). As a result, customers are provided with an increasing choice and variety of clothing and accessories. Among the strongest competitors are more luxury brands that provide more unique products (Euromonitor, 2021). Among the more affordable brands that can be compared to GAP are Zara, Bershka, Massimo Dutti, and others. It is important to mention that the main difference between these companies and GAP is the fact that they are more inclined to follow trends, which GAP is known for more basic items and their casual attire. Zara, for example, often takes inspiration from luxury collections and social media trends. On the other hand, GAP’s relatively common jeans styles and basic hoodies and T-shirts, while being in everyone’s wardrobe, are not innovative, which is what consumers seek at the moment. Hence, it is Zara who is the leader in India, having 69.25 percent in net share (Figure 1). This factor shows that the high competitiveness of this sales area is the focus of GAP.
Positioning plays a critical role in the company’s activities, and companies should clearly work out this aspect. In most sources, it is defined as the creation of an offering brand and images that will help an organisation take a certain place in the market (Fayvishenko, 2018; Klein, Völckner, Bruno, Sattler, and Bruno, 2019). Moreover, the positioning of the brand determines its features, which distinguish it from its rivals. GAP positions itself as a purely American brand with reasonably low prices.
Youthful, humble, approachable The organisation is outwardly very familiar with its distinctive “GAP” logo, which was its brand attribute and was often depicted on many items of clothing that the company sells. The company’s logo was also the main thing consumers associated it with. The company enjoyed wide popularity among the American population and is also known for its laid-back basics and classic denim. As already mentioned, while GAP is an American brand, the casual style of clothing is preferred in multiple countries, making the company global (GAP Inc., n.d.). The brand has positioned itself as “cool” throughout its existence, which made it popular among the young population. However, the current model of promotion and advertising in the GAP marketing strategy is to create an extensive distribution network (Keller, 2013). To examine the brand’s current image, a brand identity prism is applied.
GAP has used several product advertising strategies throughout its existence. The primary sources were printed materials, television, and mass media. Currently, the organisation relies more on street banners and social networks. The point of difference that distinguishes it from its competitors is its fairly casual and simple design. However, the price remains too high for this brand, as competitors offer the same thing, but at a lower price.
Strategic Brand Recommendations
First, the current situation of the GAP was analysed in detail. It helped identify the company’s weaknesses that need to be addressed.
Before starting to talk about recommendations, it is necessary to consider the reasons why GAP has become characterized as a failing brand. The first reason is the inability of the company to adapt to the new conditions of the retail market (Faull, 2021). Thus, the organisation began to lag behind its rivals and now suffers from many years of inactivity due to the rapid growth of popularity. Such a failure can be severe since such mistakes should not be allowed in such a rapidly growing industry. Moreover, the company’s insufficient investment in the online market is precious in the modern world of information technology development.
Furthermore, many companies are adapting to the fashion world and trying to modernize their brand, which GAP cannot be said. In addition to the fact that no changes have occurred with the company for a long time, the company’s assortment remains the same. Thus, GAP mostly satisfies customers looking for basics in their wardrobe, which is not enough in the world of fast fashion, where trendy pieces are major income sources due to the critical presence of social media.
Having mentioned all the problems, it can be said that GAP needs to work on several points at once. First, the company needs to invest in online sales and development in this area (Beverland, 2018; Keller, 2012). Moreover, it is essential to pay attention to the analytical sector, which tracks current trends. This will help the company to compensate for all the lost time that the brand was idle on the market. To improve sales, GAP needs to improve the image brand, with which the organisation will increase the level of audience loyalty.
Furthermore, the company’s brand already has sufficient recognisability, so the brand does not need to spend considerable monetary resources on this aspect. One of the recommendations may be a more detailed segmentation of the organisation and a more conscious attitude towards opening new stores or maintaining or closing existing ones. Therefore, to obtain the desired positive results, it is necessary to conduct a precise study of the customer base and determine specific ways of development, taking into account the audience’s opinion.
In addition, another recommendation may be to improve digital marketing, which is also crucial in the era of technology development. This approach helps to stimulate sales and contribute to the development of the brand through electronic means (Chaffey and Ellis-Chadwick, 2019; Kannan, 2017). This method can mainly use tools such as advertising on social networks and various online platforms on similar topics (Bilgin, 2018). One of the advantages of digital marketing is a relatively fast display of results, unlike more traditional methods (Rosenbaum-Elliott, Percy and Pervan, 2015). This is since this method is more flexible and accessible to the company. Another advantage is the provision of clear statistics. Thus, the company receives extensive data and helps increase efficiency and timely predict the outcomes of decisions made.
The brand’s premise of offering relatively affordable items is adequate. This will help attract more customers since the middle segment is the most extensive (Beverland, 2018). The only thing a brand should undertake is exploring the industry and following the latest trends. The visual identity is also quite good, as the distinctive GAP logo is recognizable. However, the brand should reduce the number of goods on which this defining sign is clearly visible since modern society is less inclined to display their clothing brand explicitly.
The next valuable step is to establish a brand communication strategy. It consists of the process of achieving goals through communication methods, primarily with the audience (Voorveld, 2019; Lopes and Veiga, 2019). This phenomenon consists in establishing the right message and its distribution, perhaps through social media influencers. According to researchers, celebrities often inspire fashion trends by influencing people into following their taste in clothing (Khare, Sadachar and Chakraborty, 2021) Moreover, goals should be defined, achievable, measurable, and temporarily distributed (Zohn, 2018). As for branding, it is necessary to establish a clear and permanent branding throughout the marketing material, including a social media page with minimalistic photographs and youthful and trendy models.
The last important recommendation is the establishment of metrics for measuring brand success. They are precious when setting long-term goals, which cannot be ignored by the company’s analysts (Apéria, Georgson and Keller, 2013; Keller, 2013). Moreover, to achieve the best results, it is necessary to build trust with the audience. This can be achieved by listening to the audience’s feedback and taking their opinions into account when developing the company’s strategy.
Therefore, this scientific work was engaged in the analysis of GAP. This brand once had high popularity among the population and established itself as a fashion clothing and accessories store at affordable prices. However, recently the company has been experiencing a crisis and is increasingly seen as a failing brand. To improve the organisation’s position, it needs to consider several vital indicators. It is essential to conduct analytics of all available departments, audiences and market trends. A valuable aspect is to establish the trust of the audience and strengthen the company’s branding.
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