Gap's Gift Cards And "Reserve in Store" Initiative Expected To Drive Holiday Sales
By Anna Rose Welch, Editorial & Community Director, Advancing RNA
Company sees growth in-store and online sales growth in third quarter; expands omni-channel initiatives for a more competitive holiday shopping season
Gap reported slight increases in sales and comps during its third quarter, with net sales increasing three percent and comps up one percent. Total sales for the company equaled $3.98 billion, and on a constant currency basis, revenue rose by five percent. Sabrina Simmons, Gap EVP and CFO, says that these results are in keeping with the company’s goals to grow shares and increase earnings per share. Simmons says so far for the year-to-date, the company has performed well, with topline growth of six percent and comps up three percent. With the important holiday shopping season a mere one week away, the company has several initiatives in place to ensure a successful start to its fourth quarter.
Earlier in the month, Gap announced it was initiating a “reserve in store” policy on a trial basis in Chicago and San Francisco. However, the company recently decided to expand this policy so that busy holiday shoppers can easily reserve an item on the go and pick it up in-store. The service will be available in all Banana Republic stores and in more than 200 Gap stores. Not only does this option draw shoppers online, but it also emphasizes the importance of brick-and-mortar stores and draws shoppers into the stores to, hopefully, make more purchases. As Paula Conhain, a Gap corporate manager says, “We’re focused on omni-channel strategies designed to strengthen and integrate the shopping experience, whether customers choose to shop online, on the go, or in stores. ‘Reserve in Store’ makes it even more convenient for our customers to shop with us whenever and however they want.”
The program is set up so that customers can find the item they’d like online, and using a “find it now button,” browse through a list of nearby stores to see which one has the item and is closest to the customer’s current location. Upon reserving the item, the customer can pick the item up within the hour. For those with extra busy schedules, the store will hold the items until the close of the next business day. This will be an incredibly important—and competitive—improvement for the company, especially throughout the holiday season when last minute gift ideas crop up and unreliable shipping processes can cause extra stress.
Indeed, Gap seems to be playing the online game fairly well. Over the past two years, the company saw e-commerce revenue increase by 60 percent; in the first two quarters of 2013, e-commerce revenue grew 27 percent. For Q3’13, online sales increased by 20 percent.
In addition to these new omni-channel initiatives, Gap CEO Glenn Murphy says that the company will be pushing gift-cards this holiday season. According to Murphy, gift cards have become a big part of the company’s business, and during this holiday season in particular, these could be a particularly lucrative item for the company. Considering that the recent NRF holiday gift card survey revealed that an increasing number of consumers are including gift cards on their holiday shopping lists, Gap should be feeling confident about its gift card strategies this holiday season.
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