Gap Tells Shoppers to Name Their Price

Mar 17, 2011

No William Shatner in sight, but Gap clearly seems to have taken
a page from Priceline’s book with its most recent promotion that asked consumers
to name the price they wanted to pay for khakis.

Visitors to
were greeted with a simple message: “Let’s
make a deal. Say your price.” They then proceeded to make offers, which
based on a quick scan by RetailWire seemed primarily in the $35 range
for khakis with a normal retail of $49.50.

The gapmyprice promotion, according
to a report on the Advertising Age website,
was an attempt to be more targeted than normal coupon dropping, a goal set
out by Gap Inc. CEO Glenn Murphy during a conference call to discuss the company’s
fourth quarter performance.

“[2010 promotions] could have been done more surgically. [There] could
have been a little more thought and innovation and creativity brought to it.
And that’s the expectation of a company like ours,” Mr. Murphy is quoted
by Ad Age. “Anybody
can put an easel outside a door that says take an extra 25% or 30% off. We’ve
fallen for that trick a few times, and that’s not smart as far as I’m concerned.”

like others, is investigating the opportunity to build excitement and revenues
using daily deal and flash sales. Its deal with Groupon drew national attention
and sister chain Banana Republic has tried three-hour lunchtime sales. The
name your price twist was simply a variation on the theme.

Based on social media,
reactions to the promotions were mixed and Gap has not released any numbers
on how many pairs of khakis it moved. With the one-day event now over, the
only message on was, “Thanks to our
first supporters for making the Gap men’s khakis ‘Say Your Price’ promotion
such a success. Check back soon for the next exciting promotion!”

Discussion Questions: What do you think of Gap’s ’Say Your Price’ promotion? Are the numbers of flash sale sites popping up likely to dilute the effectiveness or is the lure of a deal still too much for Americans to pass up?

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11 Comments on "Gap Tells Shoppers to Name Their Price"

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Bob Phibbs
11 years 2 months ago

Grasping at straws from a company that seems to value folding clothes and discounting more than engaging customers.

Paul R. Schottmiller
Paul R. Schottmiller
11 years 2 months ago

It will be interesting to hear the results. I applaud their push for innovation in this area, but I am skeptical of the “name your price” element for buying a basic like GAP Khaki’s.

That “creative” element aside, we are at the point where moving away from the traditional one size fits all couponing / discounting models to significantly more targeted approaches is possible and desirable (if done right). Retailers should continue to look for “creativity” in how this capability is delivered.

Roger Saunders
11 years 2 months ago

With retail market conditions like they have been over the past 3 years, it is imperative that marketers determined to WIN, innovate, test, and then move forward. I’m a skeptic on the “Name the Price” promotion. However, if a concern like Gap tests the strategy in a set of stores or via an online execution, they have the ability to verify its effectiveness.

That positions them to decide whether they can/should play it forward. One matter is certain. This is not the time to be standing still–existing customers have to be engaged, and that needs some prompting with consumers who are still deleveraging debts/expenses.

Doug Fleener
11 years 2 months ago

It is a fun and engaging way to put something on sale without coupons, and they didn’t have to give half of the sale to Groupon to do it. They also got some nice press and online buzz from it.

With that said, it’s not going to be a long-term alternative to sales since customers clearly don’t really name their own price.

One other issue is how people are comparing the price they got it for. It’s great if you’re the person who got the lower price, but you’re not feeling so great about Gap if you paid more than the other person.

Bill Emerson
Bill Emerson
11 years 2 months ago

While this is a different approach, ultimately it is communicating to the customer that they are foolish to ever pay full price for a basic replenishment item. Over time, the customer is trained to wait for the sale with a net result being a lower margin on what should be an annuity. I think the word desperate is apt.

Kai Clarke
11 years 2 months ago

This is a great way for GAP to truly understand the needs of their customer in terms of price. Over time, GAP will be able to compare velocity of the same product online vs. in the store, and the before and after the promotion impact as well. These key bits of information will help them truly determine where price fits for each of their SKUs and at which price their customer’s consider their products “a fair market value.”

Cathy Hotka
11 years 2 months ago

As long as companies think that discounting is the only way to communicate with customers, they’ll experience lower margins and a customer base that sits on its hands and waits for the next bargain. We are all looking forward to retailers’ embrace of the C-B model, where customers can have more meaningful interactions with the retailers they love.

Ed Rosenbaum
11 years 2 months ago

When I first read of this I thought it was a creative way to move merchandise and excite customers. After thinking about it I am more swayed to it being a weak attempt to increase sales. Using this method, which I think can be successful if modified, why wouldn’t we wait for items to go on “bid” rather than pay full list price? I am not ready to jump on this bandwagon yet.

Ted Hurlbut
Ted Hurlbut
11 years 2 months ago

Dear Customer,

Thank you for buying our khaki’s during our just completed promotion.

Now wait, and we’ll be back soon with our next promotion. Then, we’ll have another promotion soon after that.

After all, it’s all about the price, isn’t it?

The Gap

Doug Stephens
Doug Stephens
11 years 2 months ago

I am a huge proponent of experimentation in branding and marketing.

However, when the experiment involves cheapening your brand beyond recognition, I think you’ve gone too far. If the strategy here was to strip whatever equity the GAP brand might have left, then I’d say mission accomplished.

Craig Sundstrom
11 years 2 months ago

I wish I could be more encouraging, but I too find my MarketingOMeter needle swinging more to the “desperate” than “creative” side. Anyway, I think the world already has a permanent name-your-price store: it’s called “eBay”… maybe the GAP–or is it Gap now?–should close some of their 353,272 stores and sell stuff there.


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