The Gap readies electronic commerce plan for Web site

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In what might be one of the biggest boosts to Internet retailing, the Gap is moving quickly to establish an online selling presence, possibly as soon as the 1997 holiday season.

Since the launch of its Web site last fall, the Gap has mapped visitor usage patterns, and found "people stayed 50% longer on the Gap site than on an average site," said Michael McCadden, senior VP-marketing. Games and promotions were popular and kept visitors' attention, but the company was surprised to find how long visitors were spending on product information, he said.

"We were very pleasantly surprised that they were interested in the product," said Mr. McCadden.


As a result, Gap is developing a sales vehicle for products identical to those in Gap stores. Limited products, however, are likely to be sold online, he said. The company's major concern is to deliver online what consumers have grown to expect in the stores.

"It's important for online to deliver what consumers expect of the brand," he said. At this point, Gap does not intend to begin a catalog operation, Mr. McCadden said.

The Gap's entry into online retail is a natural one, said Kate Delhagen, a senior analyst at Forrester Research. "It's about time," she said. "The Gap is a marquee brand and an excellent demographic fit" with Web users, she said, adding that another incentive is that many Gap products, such as T-shirts and socks, don't usually require trying on for size.

"They are very likely to have a successful holiday season online if they promote it" adequately, letting customers know purchases can be made on, she said.


The Gap's challenge, she said, will be to develop ways to spark impulse buys, which often add significantly to sales.

So far, Ms. Delhagen said, online retailing has been successful for hardware and software companies, with marketers such as Dell Computer Corp. reported to be doing $2 million a day in online sales. Other commodity products that appeal to the Web's demographics, such as book and music sellers, also have been successful.

Ticketing and travel services have also taken off. Companies now routinely reach $1 million a week in sales, said Ms. Delhagen.


Experts, such as Greg Wester, an analyst with the Yankee Group, aren't as optimistic about online retail in the short term. "The online success stories in retail are few and far between," he said.

Sellers of broad-based consumer goods, many cyber-only entities, have been slow to grow.

Those with the strongest track records are catalog companies with internal structures, such as a mailing staff, to deal with orders. Technological advances, however, are beginning to make the cost of entry more affordable, said Mr. Wester.

But for now, he added, "if you really want to sell on the Web, you have to spend money" marketing the site, making many operations far from profitable.

Copyright June 1997, Crain Communications Inc.

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