Gap Inc. plans to shift its marketing "disproportionately to acquiring new customers" this year, including a younger demographic as well as African American, Hispanic and Asian customers.
Speaking at the recent Bank of America Merrill Lynch consumer conference, chief executive Glenn Murphy said that, during the recession, the company shifted its "marketing and shifted our balance to holding on to the customers we had and didn't put as much money towards acquiring new customers. That was a strategic call we made."
Now, the company is "disproportionately" shifting its focus toward new customers in two areas.
First is targeting the younger range of its
25 - 35 year old demographic.
Said Mr. Murphy, "Our range we halo slightly down and slightly up is between 25 and 35 years old. At 25 to 30, our share is lower than we're comfortable with. You'll see the marketing shift towards that, whether it's in medium or messaging, to try to get a bigger share of that customer."
The second area is increasing diversity in its U.S. customer base in particular.
"We as a business do not have the share we should have with the African American community, with the Hispanic community, and with the Asian community," said Mr. Murphy.
Other ways Gap Inc. will look to drive top-line growth in North
America include:
- Delivering more trend-right product and chasing hot items more quickly through a new pipeline system that speeds concept to store from eight to 16 weeks.
- Introducing new categories such as last year's newly licensed T-shirts and jewelry at Old Navy as well as the expansion of the GapFit athletic line at its Gap chain.
- Integrating its outlet and specialty businesses at the Gap and Banana Republic, partly to capitalize on the strength at its outlets over the last three years.
- Using RFID in select stores to not only improve inventory accuracy but to help store associates find merchandise within a store.
- Further capitalizing on driving online sales to physical stores as well as store to online. For example, if an item is out-of-stock online, a customer at some Banana Republics can be sent to the nearest store to find the item.