Gap is now selling on Amazon. Desperation or genius move?

Discussion
Source: amazon.com/gap
Nov 14, 2022

Gap is for sale on Amazon.com.

Gap made “thousands” of its items available last week at Amazon.com/Gap with the promise of “fast, free Prime delivery.”

“Collaborating with Amazon Fashion provides us a new channel to deliver Gap’s modern American essentials to even more customers in the U.S. and Canada,” said Mark Breitbard, president and CEO, Gap brand, in a statement.

Gaining access to customers across the world’s largest online selling platform could provide a much needed boost for the struggling Gap brand that has closed a third of its stores over the last decade. Gap merchandise has been available through third-party sellers on the platform.

Amazon gains another key fashion resource. Birkenstock in 2016 and Nike in 2019 stopped selling direct through Amazon but the retail giant now has dedicated storefronts for most brands that sell in traditional department stores, including Polo Ralph Lauren, Calvin Klein, Michael Kors, Kate Spade, Levi’s, Adidas and The North Face.

A number of luxury labels, such as Gucci, Burberry and Coach, do not sell directly on Amazon, nor do most vertically-integrated chains – e.g., Lululemon, H&M, American Eagle Outfitters and L.L. Bean. Gap’s sister chains, Old Navy, Banana Republic and Athleta, do not yet list product on Amazon.

In a partnership announced in April, Victoria’s Secret became the first major vertically-operating chain to open an Amazon storefront, although it is restricted to beauty products and Pink casual apparel.

Gap’s shares rose nearly nine percent on news of the partnership, given the potential to tap Amazon’s customer reach.

Jinjoo Lee, The Wall Street Journal’s “Heard on the Street” columnist, sees potential negatives for Gap, such as giving up a portion of sales proceeds and customer data as well as the overlap with Amazon’s private label offerings.

She added, “Coming to Amazon can also harm brand perception because Amazon is a marketplace for everything — not exactly a curated platform and one associated with value rather than exclusivity. In short, it is not a decision that a clothing brand, especially such a household name, would make unless its business outlook is looking very bleak.”

DISCUSSION QUESTIONS: Does the Gap or Amazon gain more from their new selling partnership? Do you see Gap’s involvement with Amazon as a desperation move or a smart one?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Gap’s primary problem is no one cares about its clothes anymore, and the brand doesn’t stand for anything. A new distribution channel doesn’t solve that core problem."
"Desperation or smart? I’m going with smart, as this move for Gap expands its reach through Amazon’s customer base – and makes it easier for customers to buy their merchandise."
"This reeks of desperation to me. Not only does it cost Gap revenue, but it does nothing to address the mission critical issue, i.e., people don’t want what Gap is selling."

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32 Comments on "Gap is now selling on Amazon. Desperation or genius move?"


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Mark Ryski
BrainTrust

Given all the calamity at Gap over the last year, this feels more like a desperation move than a smart one. It’s clear that Gap needs to drive sales and so broadening distribution to Amazon is one way to get it. But I’d argue that selling on Amazon also carries with it the down-side of loss of control of their brand. I can’t blame Gap management for looking for new sales, but I do question whether this is the best way to do it.

Gene Detroyer
BrainTrust

Gap lost control of its brand over a decade ago, to the point that recapture is useless.

Rick Watson
BrainTrust

Good move for Amazon, meh for Gap.

Gap’s primary problem is no one cares about its clothes anymore, and the brand doesn’t stand for anything. A new distribution channel doesn’t solve that core problem.

Why do I walk into the door of a Gap store these days? That is the fundamental question they need to answer.

Richard Hernandez
BrainTrust

Unfortunately, this is not going to save them.
I believe it weakens the brand because it now gets lost in the vast marketplace. Good luck to them.

Neil Saunders
BrainTrust

This is mostly an act of desperation because Gap is unable to grow sales at its own stores and via its own website. This, of course, is because of Gap’s perennial issues with range, branding and pricing. Having tried to remedy this with Kanye, it is now jumping in bed with yet another third party to try and drive business. It is all very unoriginal and shows Gap is out of ideas. That said, selling on Amazon isn’t the worst idea ever and it may help to increase sales and exposure. The problem is that some of this may be cannibalized from Gap’s direct business and the arrangement may also make Gap more reliant on Amazon.

Dick Seesel
BrainTrust

If you think of Amazon as a virtual shopping mall, with a wide variety of “storefronts,” then Gap’s presence at the mall makes sense. The location strategy that built the Gap business is obsolete, and Amazon will bring millions of potential customers to Gap’s e-commerce business. Two things can be true at once: This may smack of desperation (Gap needs the sales) but is also a smart move.

Dion Kenney
BrainTrust
25 days 11 hours ago

This is not a “position of strength” move from the Gap, but it is a recognition that omnichannel must consider where the customers are to succeed. The relationship will provide additional strength to Amazon’s positioning as the “everything store” and a marketplace where every vendor needs to have a presence. Unfortunately, it also highlights the relative paucity of other meaningful marketplaces that can fill out the online complement to brick-and-mortar sales.

Gene Detroyer
BrainTrust

Ms. Lee suggests Gap at Amazon can also harm brand perception. Really? What brand perception? In terms of brand perception, Gap will never be what it was decades ago.

The move is simply a good business move. After closing a third of its stores, Gap needs eyeballs and potential customer access to its products. Let’s not call this desperation. Let’s call it just a plain good strategy.

Lisa Goller
BrainTrust

Amazon gains more retail power as Gap joins retailers like Victoria’s Secret and Peloton by selling on the e-commerce hub. Amazon cements its role as a magnet for retailers and brands that seek exposure among the masses.

After years of declining sales and its breakup with Ye, Gap’s move is one of necessity for survival and relevance.

DeAnn Campbell
BrainTrust

This was inevitably where they were headed when they decided to close a good number of their physical stores. There is just too much online competition in apparel for most brands to differentiate, especially brands in the dreaded “middle.” Shein does well because it’s cheap. Gucci does well because it’s luxury. Gap is lost in a sea of competitors, so aligning with Amazon at least puts them into the online marketplace with the largest reach and shopper base.

Shikha Jain
BrainTrust

Amazon’s primary advantage is that now consumers use the platform to search and browse not just to purchase. For retailers that sell on Amazon, it allows them to access new consumer segments that they previously might not have been able to reach. Amazon as a channel has its place in a broader strategy for all brands/retailers. The questions usually are whether the brand is strong enough to survive on its own, and what is its goal with Amazon?

Jeff Sward
BrainTrust

There’s that word again — “free.” The most expensive word in retail. Sure Amazon has reach, but I wouldn’t have said Gap had a reach problem. They have a brand promise, product and marketing problem. None of which are 1 percent solved with this move. Will sales through Amazon be incremental, or left pocket/right pocket? And what will happen to the return rate and subsequent profit drain? And the stock price bounces 9 percent. Really?

Gary Sankary
BrainTrust

I disagree with the analyst Ms. Lee’s assessment that the Gap is doing its brand a disservice by having products on Amazon. Amazon has evolved into just another channel for consumers. And given the dire situation at the Gap, anything that can help has to be at least tried. Will it move the needle? Not sure. The issue that Gap faces is not due to lack of access; to the contrary, the issue is about product and relevancy to the market.

Paula Rosenblum
BrainTrust

Once upon a time Gap had 600 stores. The first third got closed in the prior 10 years, before this last round. The brand has lost its way. I think this is mostly a nothingburger for both. It doesn’t cost Amazon anything, really. Gap can presume something is happening for it. But I still don’t know what Gap stands for. I guess they gave us a hint by talking about “modern American essentials” but how did Yeezy fit into that?

Meh.

Liza Amlani
BrainTrust

Gap’s move is desperate and will drive the brand even further away from understanding who their customer is and what they actually want.

Reinventing itself is one thing. Diluting the brand across multiple channels, categories they don’t know (home products), and partnerships that don’t make sense is not a smart move.

I continue to be dumbfounded over Gap’s merchandising strategy and I’m not the only one.

Bob Phibbs
BrainTrust

But can we get Gap sheets at Amazon? Amazon takes the knowledge about the shopper, the shopper gets knockoffs right next to Gap products for less, and someone at Gap gets the credit as “groundbreaking.” Geez, #sosad.

Gene Detroyer
BrainTrust

Would Amazon (or anyone else) really want to knock off the Gap products?

Ryan Mathews
BrainTrust

This reeks of desperation to me. Not only does it cost Gap revenue, but it does nothing to address the mission critical issue, i.e., people don’t want what Gap is selling. Of course one could argue that any distribution point is a good distribution point, but that is demonstrably not true. Amazon partnerships have an interesting habit of being better for Amazon than they are for its partners.

Kathleen Fischer
BrainTrust

The “retail model” is changing, with marketplaces like Amazon a means for brands to reach a broader audience, especially as the traditional mall concept faces challenges. While Gap loses some control of its brand, it will now be more accessible to additional customers.

Mohamed Amer, PhD
BrainTrust

Gap must find a way to reduce quarterly losses and survive the post-holiday demand uncertainties. The move to Amazon is unlikely to harm the brand image while providing needed sales upside now with Prime exposure and free delivery. But don’t call it a bold strategic move; this is born out of desperation and survival and is the right move despite all the naysayers.

Doug Garnett
BrainTrust

While this isn’t a desperation move, it’s not a move of strength for Gap. Certainly it is more evidence of strategic wandering as they attempt to rebuild strength they’ve been missing for years. My hope is that they won’t be hurt too badly by making this move.

Brandon Rael
BrainTrust

On the surface, for any middle-of-the-road retailer, extending their sales channels to Amazon is a logical and sensible strategy to grow new revenue streams and capitalize on the e-commerce giant’s distribution capabilities and scale. Unfortunately, for Gap to fully realize and take advantage of these benefits it must take an honest look at its fundamental business model, as the brand has completely lost all its relevance.

Gap has to reexamine its purpose and competitive positioning in a highly congested 2022 retail marketplace. Simply extending its brand into the Amazon ecosystem is a move that will not drive or change consumer sentiment. There are weaknesses that Gap will need to address with its branding, brand purpose, merchandising strategies, and storytelling across social and digital channels to spark the turnaround the company will need.

David Slavick
BrainTrust

The Customer is King. They decide where to source their needs and so offering Gap apparel via the Amazon channel while inherently diluting brand shopping experience, is a good move. I know what my sizes are for Gap clothing. Why not shop through the Amazon channel to get what I want with added convenience? Better to play nice with the “devil” rather than bury your head in the sand.

Shep Hyken
BrainTrust

Desperation or smart? I’m going with smart, as this move for Gap expands its reach through Amazon’s customer base – and makes it easier for customers to buy their merchandise.

james slifer
Guest
25 days 9 hours ago

Desperate move. Gap started licensing their brand into categories such as furniture and domestics, allowing their licensees to sell to Walmart and other discounters.