INSIGHT: Will ads make Gap’s Christmas wish come true?
For a company which built its early reputation on eye-catching TV ads, it comes as some surprise to read that Gap's current US holiday campaign is its first for three years.
But the timing is no coincidence: the success of the company's renewed push behind its Old Navy retail brand has persuaded its executives to spend big this Christmas in a bid to gain market share against its rivals.
Old Navy was the highlight of Gap's third quarter results announcement, posting comps gains of 10% in a flat overall picture, and comfortably out-performing stablemates Gap and Banana Republic.
The new Gap campaign, which started last week, runs for about five weeks and is a major contribution to the company's US$45m increase on last year's fourth quarter marketing expenses.
The intent, following Old Navy's Supermodelquins campaign, is to keep consumers coming to the company's retail stores - and, most crucially, get them to spend more once they're in the door.
"We've worked over the last six to nine months on traffic generation ideas," chairman and CEO Glenn Murphy told analysts.
"How do we get traffic inside the four walls of our stores? Now I think the focus here is how do we turn that traffic into market share."
Of course, that won't just happen through a fancy new ad campaign.
The performance of Gap's relaunched denims range, the new-style Banana Republic stores and the Project One prototype outlets - all will be crucial to the fulfilment of Murphy's market share targets.
The success of the Gapkids tie-up with designer Stella McCartney might be another pointer to future strategy, but Murphy was keen to downplay suggestions that other celebrity names might be brought in.
"I don't think it's a strategic intent," he said.
With or without the help of the fashionistas, increasing market share won't be straightforward in an environment where apparel spending is forecast to be flat for at least the next 12 months.
"At the end of the day today, the customer psyche is 'give me a reason'," Murphy said.
"Give me a reason to cross the lease line. Give me a reason to drive to the mall. Give me a reason to get out of my house. What is that reason?"
Could it be a rejuvenated ad message?
Gap must be hoping that it can repeat the Old Navy trick with its eponymous brand and Banana Republic - but in a highly competitive and promotional pre-Christmas marketplace, the company will have a fight on its hands.
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