Gap Takes A Hit in the Retail World

Gap may have ruled the retail world with SJP and Lenny Kravitz, but there's one thing it no longer rules--the title as world's largest clothing retailer. Spanish fashion boutique Zara recently took the top spot, dramatically swiping it out of The Gap's once impenetrable grip.

As Gap struggles to pull off increased sales, Zara does so and opens new locations. So, just what makes Zara so fabulous and Gap so "blah" these days?

In a recent article in the U.K's Guardian, it reports that Inditex (Zara's parent company) takes a unique approach to developing its brands: all logistics and design are handled in-house. Why? According to Inditex, it's to ensure that they get exactly what customers want out in the shortest time possible.

In the Guardian article, an Inditex spokesman said, "The ­success of the model lies in being able to adapt what you're ­offering in the shortest time possible to what ­clients want. For Inditex, time is the principal ­factor to take into account, more so than the costs of production."

Zara also doesn't spend much money on advertising. Instead, it relies on the success of its physical stores, with its boutique-style look. Store design and appeal tends to be the primary focus on building the brand, as opposed to flashy or celeb-filled advertisements.

Gap, on the other hand, has quite a bit to juggle these days. It's enmeshed in two major retail conundrums--first, its primary customer base has gotten older (hey, I resent that!), meaning it no longer offers the same appeal it once did. Secondly, the U.S. economy hasn't exactly been doing back flips lately, while the Euro--where the majority of Zara's stores are located--has been off the hook (to use a term from a younger generation--see I'm not old!).

These two factors alone have affected the once world-leader in retail tremendously. And not for the better. Gap appointed a new CEO in hopes of turning things around, but so far, that plan has failed to lead to total world domination.

So what could Gap do to get their top dog status back? Well, if their recent Web site homepage is any indication, they might be leaning in the direction of copying their competition, all with a European flair. Yes, it's true; Gap is going all European on us. Recently, Gap's homepage showcased an advertisement for its "Limited Edition European Collection." Well, hey--it's working for Zara--it might be just what Gap needs!

What do you think could put Gap back on top? Leave your comments here!

--Heather Strang

Comments

[Jenifer]

I loved their first fall collection - was the first time in years I've bought something more than a tee. The leather jackets are great. Not crazy about Oct inputs - plaid wool - not my thing.

[Lindsay]

I am a college student majoring in PR and I have been reading through a book called Discovery-Based Retail. You might find this book to be helpful in analyzing Gap's retail methodology. I recommend!

www.discoverdbr.com

[Corwin Steeves]

Baggy shapeless clothing vs fitted euro cuts... if Gap clothes actually fit like the staff pins it on the mannequins they would be doing just fine.