This is a guest post from Alex Greifeld, apparel industry veteran and author of the No Best Practices newsletter. Unsubscribe from marketing groupthink by joining her community.
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Gap released a new ad campaign last week, although you might not know it based on the relative lack of discussion on Marketing Twitter.
Here it is in its full glory:
The Gap brand has become like an old friend who can’t stop making self-destructive decisions–many who still love it are forced to disengage to protect their own mental health.
But maybe it really will be different this time. Gap’s new CEO, Richard Dickson (real name), is a true outsider who has vowed to shake things up for real; beginning with an entrenched middle-management layer. Many of these tenured employees have managed to stick around since the Mickey Drexler days.
The new campaign is indicative of this drive for real change. It feels more relevant and vibrant than anything Gap has released in recent memory. Maybe that’s because the campaign features stars that are culturally relevant. The casting acknowledges the brand’s diverse customer base. The styling is compelling. The art direction actually feels…directional (for a mall brand).
The question is: is a single campaign enough to return Gap to cultural relevance (and profitability)?
My perspective: probably not.
GMROIREAM (GMROI Rules Everything Around Me)
Gap’s strategic decision-making has historically been ruled by one simple KPI: GMROI (gross margin return on investment). Like the factory managers in the biz-lit classic, The Goal, Gap management lost sight of the business’ overall objective—profitable growth—in pursuit of this KPI.
This should be apparent the moment you walk onto the shop floor as an employee, something we were able to do during my time working in corporate. Every square inch of the store is crammed with merchandise; what better way to turn inventory than to…provide shoppers with a lot of inventory?
Managing the flow of this merchandise is a Sisyphean task. The more items customers take to the dressing room, the more mess to clean up. As the lunch rush approaches, it becomes impossible to keep up with this process, and the store begins to look chaotic. Because there is so much merchandise, none of the employees know exactly where everything is or what products are carried in-store vs online. When customers come in looking for a specific item, the odds are 50/50 that a given employee will know where to find it.
This model makes the brand a victim of its own success: the more customers that walk through the door, the more the store becomes disheveled and the customer experience degrades further and further.
As several Twitter users including @cashmeretote pointed out, there is a huge disconnect between the image presented in the new campaign and the reality that exists in stores.
This makes it harder for Gap to charge a premium over mass-market retailers like Target and Walmart or fast fashion giants like Temu and Shein. It’s one of the main reasons that the Gap brand is stuck in a cycle of discounting; Gap stores frequently run 30-40% off store-wide promotions year-round.
Designed To Discount
Many folks who are rooting for the Gap fondly remember the quality of the merchandise in the 80s and 90s. Denim had a substantial hand-feel and was made of 100% cotton. Sweatshirts were beefy and stood up to multiple washes. Button-downs were well-cut, and the fabric skimmed the body in a flattering way.
The clothing was made to last. It was so well made that it stood out on thrift store racks; this is how many younger Millennials and Zoomers discovered the brand.
Unfortunately, that is no longer the case. The Gap excels at producing certain items in certain product categories–denim, intimates, and children’s clothing stand out.
But a lot of the product assortment is simply rushed into production. The fabric quality is poor–see-through, flimsy, and diluted with synthetic fibers. A “boyfriend” shirt boxed out over my chest but clung to my hips, while another top appeared opaque online but sheer and metallic–like a “going out” shirt from the movie Swingers–in person. Many designs sit in limbo—between classic and trend-driven—pleasing no one (ever heard the adage ‘you can’t be all things to all people?’)
GMROI mania is part of the problem. To feed the “big-box beast,” a broad and ever-changing assortment of products is required. This forces design and production teams to churn out new products without fully considering fit and design.
The discount addiction adds even more pressure. The brand knows that most of this product will be sold at 30-50% off full price, at best. COGS must be low enough to turn some kind of profit at a steep discount. The result is a product that looks cheap for its full MSRP, reducing the odds that it will ever sell at full price.
This is another gap (pun intended, sorry not sorry) between marketing and reality that must be closed if the brand wants to grow. The linen pieces in the latest campaign look pretty compelling in terms of fit and quality. But how will they look that way when I try them on in-store?
Nostalgia For The 90s Media Landscape
Marketing can’t make up for product or operations issues. But the new Gap campaign isn’t without its own major flaw: a lack of cohesive strategy. Is Gap trying to sell premium linen clothing to Gen Z? The campaign’s art direction and casting both indicate that. But with prices ranging from $70-90 for the linen collection, the merchandise is HENRY, not CARLY.
Perhaps this campaign rollout will be so effective that the average Zoomer will start to view Gap as a status symbol or at least a brand worthy of “investment pieces”? Curiously enough, this is the strategy employed by Banana Republic in their “BR” rebranding campaign; repositioning BR as aspirational. Jury’s out on whether that has worked or not; though Gap Inc. owns BR.
Gap’s new CEO, Richard Dickson, said about the campaign: “[Gap] was a pop culture brand, and it did more than just sell clothes.” He is absolutely right about that, but the nature of pop culture has changed dramatically since the brand’s peak in the 1980s and 90s.
In the 1990s, Gap made Khakis “go viral” by producing a TV ad with compelling but disruptive aesthetics and then paying many TV networks to broadcast it constantly. The spot fueled a revival for swing dancing and became a talking point on late-night talk shows. In this way, it became part of the “cultural conversation.” Unfortunately, in 2024, that cultural ecosystem is gone.
The new Gap campaign feels like a TV spot. Maybe it was intended to run on YouTube or connected TV. But those channels need cultural backup from social media if you want your ad to break through the noise and become a part of the cultural conversation. I don’t see any evidence of a parallel social activation. Maybe the brand thought that people would copy the dance and post it on TikTok? The song in the ad, by Jungle, is a TikTok sensation; something other think-pieces about the campaign have overlooked in their frenzy to provide a salient take.
Today’s cultural environment is more fractured. There are fewer “watercooler moments” and fewer broad consumer product trends. The big trends that do emerge–the Stanley Quencher is a recent example–require “seeding” across multiple influential audiences. The involvement of marketers can’t be too obvious. I guess it also helps your product survives a car fire.
A TV spot rolled out via a traditional PR push doesn’t fit that bill.
Can The Gap Finally Turn Itself Around?
Apparel and “lifestyle” brands typically grow in three stages:
- Find white space in the market. Speak to an underserved customer base or an existential need.
- Market the niche. Turn it into a compelling, fully fleshed-out lifestyle. In order to do this, the brand must alienate some of its potential audience by placing itself in opposition to some aspect of the status quo.
- Go broad. Use the brand’s scale of distribution and awareness to serve multiple segments of the market. This is when brands start chasing trends instead of setting them.
When a brand reaches stage 3, it can become overexposed, alienating its core customer base. If the brand doesn’t maintain a sharp focus on product quality and differentiation, it will often slide into irrelevance and unprofitability after stage 3. When that happens, a brand can either return to an earlier stage to rekindle its desirability or create a compelling stage 3 proposition–something that is differentiated, but not alienating.
J Crew is a brand that appears to be making inroads with the first approach. They’re leaning into the celebrity creative director strategy that worked in the Jenna Lyons era and working with “downtown” influencers like Chris Black. The strategy is to elevate the brand for the HENRY crowd without losing sight of that shopper’s lived reality.
Abercrombie & Fitch is a great example of a brand that succeeded with the second approach. It is no longer exclusionary or polarizing, but it has a point of view. The product is “cute” and of higher quality than fast fashion. It serves its former stage 2 client base, 15+ years later–90s kids who want trend-informed (but not trend-driven) clothing that won’t fall apart after a single wear.
Given the scale of Gap’s retail footprint and that it is part of a publicly traded company, they’ll likely opt for the A&F approach. Re-establishing a niche is a “shrink to grow” strategy; most public companies can’t get away with that.
Successful turnarounds of fashion and lifestyle brands aren’t marketing-led. They have to start with a mindset shift: moving from a scarcity mindset to an abundance mindset so that the team can stop defending territory and start taking risks. After culture, product and positioning are king. Every brand in a competitive category like apparel needs a reason to exist.
Gap hasn’t articulated its reason for existence–at least not publicly. Marketing campaigns have a shorter lead time than apparel production, so perhaps the “meat” of this transformation is already in motion. But you can’t use marketing to hypnotize consumers into buying subpar product.
Apparel is hard because success requires such intimate knowledge of product, and how the consumer relates to it. This is a big reason why merchants often take the CEO spot in large apparel retailers and department stores. This means that marketing often becomes nothing but a spare set of hands for the merchants—which doesn’t cut it in an environment where every brand is struggling for attention.
Gap’s issues span beyond a single department or area of weakness–they’re part of the Company’s operational architecture. The brand might need to go private to dismantle ineffective, toxic, architecture to rebuild it into something stronger. Doubtful that the brand’s shareholders want this to happen; but it's still essentially a “family business.”
I commend them for taking some risks with their latest CEO hire and the latest campaign. But it might be too little, too late.
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