In fact, some suggest that if the definition of insanity is doing the same thing over and over again and expecting different results, then Gap’s advertising strategy is starting to look a little crazy.
Sarah Jessica Parker
Gap’s fall campaign, via Laird & Partners, which has “it” girl Joss Stone splashed all over the country, is the latest in a long-running series of celebrity-centric campaigns for the retailer. Season after season the retailer has hired big-gun celebrities such as Macy Gray, Sarah Jessica Parker and Madonna and put them front and center in their ads. And season after season sales have slipped, with Gap Inc. reporting the worst performance of the last three years earlier this month -- a 7 percent decline in comp-store sales, results its own CEO called “unacceptable.”
Of course there are other factors at work here such as product range, store design and a fiercely competitive retail economy, but some experts believe the ad strategy is a big part of the problem.
“Relying on celebrity spokespersons should be the course of last resort,” said Robert Passikoff, the president of Brand Keys, a New York market-research company. “It is basically a statement that we have no meaning, relevance or value of our own, but if we stand next to someone real close, maybe some of it will wear off on us.” Given that such celebrities don’t come cheap -- Sarah Jessica Parker is believed to have been paid $38 million for her three-year stint -- the likes of Mr. Passikoff aren’t sure why Gap has persisted in this approach.
The answer may lie in the success that the retailer experienced when it employed the same strategy back in the late ’80s. Such audacious ads as the one that depicted beatnik rebel Jack Kerouac in wrinkled khakis and a white oxford shirt, with the tagline “Kerouac wore khakis,” worked like magic for the retailer.
Good old days
Not only did co-opting an anti-establishment figure help Gap brand itself as cool, but it -- along with the other stars of the 1988-1993 “Individuals of Style” campaign -- drove sales skyward. For three years from 1990, earnings climbed an average of 43 percent. And in 1993 alone, the Gap’s 1,200 stores posted sales growth of 30 percent. Not so anymore.
“They’ve lost their cool and don’t stand for anything anymore,” said Wendy Liebmann, president of WSL Strategic Retail. Mr. Passikoff added: “The Gap is now a category placeholder. It’s the name everyone knows, but aren’t real sure what it stands for anymore and there are other choices that mean more to consumers anyway today.”
And the image issues are hitting the bottom line. “Continued traffic deterioration, what appears to be another merchandise miss in holiday, and thus further margin pressure continues to plague Gap,” is the way retail analyst Donald Trott of Jeffries & Co., summed it up in a recent report.
Dropping TV ads
So will Gap change its celeb-sell ways? It certainly appears to be taking a breather: It is dropping all TV advertising for this holiday season and focusing instead on an “It’s my favorite gift” theme, including a 32-page “magalog” in which celebrities are notably absent.
Not that celebrities are ruled out. “We haven’t said at this point, what our plans are regarding celebrities,” said Greg Rossiter, a spokesman for Gap. “That’s because we are going to keep our options open as to campaigns in the future.”
Advice for the company: “They need to imbue the brand with some new meaning,” said Mr. Passikoff. Ms. Liebmann advises the team to look at where most Americans shop today, from Target to Wal-Mart to fashion houses like H&M and better-performing specialty retailers like American Eagle, Abercrombie & Fitch and Ann Taylor.
Changing stores critical
Ms. Liebmann also says that changing the stores is critical. “When you walk into the corner store it looks like the same store it did 10 years ago.”
Gap did launch its first new prototype in years earlier this year in Denver, under test in seven stores, with MDC Partners’ Crispin Porter & Bogusky handling advertising and marketing. Analyst reception for the program has been mixed.
And change may be inevitable, as the marketing personnel in the retailer’s top ranks are still being overhauled. CEO Paul Pressler, a former Disney executive who joined the retailer in September 2002, hired Cynthia Harriss -- also formerly a Disney executive -- this February, naming her president of Gap North America Brand.
Ms. Harriss, who has almost 30 years of retail experience, then made two key hires of her own. First she tapped Pamela B. Wallack, who spent the last seven years in increasingly senior posts at Toys “R” Us, as exec VP-GapKids, BabyGap and Gap. Then, in early October, Ms. Harriss ousted the chain’s top design executive, Pina Ferlisi, and replaced her with Charlotte Neuville from apparel retailer New York & Company.
When asked about the tenure of Jeff Jones, exec VP-Gap marketing, who reports directly to Ms. Harriss, Gap spokesman Mr. Rossiter said: “Cynthia is building her team. I can’t say there won’t be additional changes.”