Dive Brief:

• Gap is drawing upon the individual identities of its brands to drive unique experiences, according to executives on a Q3 2023 earnings call Thursday. Improvements to online and in-store customer experiences will play an important role in turning around declining sales.
• The company highlighted Athleta and Banana Republic as brands that will use their histories to inspire their futures. Athleta will draw on its beginnings as an athleticwear brand created by and for women, while Banana Republic will refocus on luxury after years of putting the emphasis on price, according to CEO Richard Dickson.
• All of Gap’s brands will put effort into creating better, more engaging omnichannel experiences. This includes showcasing and telling stories about products in ways designed to excite shoppers.

Dive Insight:

Gap is pulling back on discounts in favor of experiences as the retailer enters the next stage of its brand renewal. Dickson, who joined Gap from Mattel in August, is adjusting each banner to target a specific audience.

“Old Navy, Gap, Banana Republic and Athleta are all brands with incredible heritage,” Dickson said on the call with investors. “Brand reinvigoration will build on that heritage and will include a number of priorities. We need to strengthen our portfolio of brands with crisp identities and purpose.”

Athleta will see some of the biggest changes. The brand’s poor performance in recent quarters was caused by poor execution that didn’t connect with customers, according to Dickson. Its comparable sales — which only take into account sales from stores that have been open at least one year — were down 19% from Q3 2022.

As a result, Athleta spent the first half of the 2023 focusing on markdowns to clear out unwanted merchandise to prepare it to get back in line with its strengths. 

“Athleta has a clear and distinctive brand positioning rooted in the power of she, an authentic and highly differentiated platform that plays extremely well across performance, outdoor and travel,” Dickson said.

This is taking the form of a brand presentation refresh both in-store and online. Athleta is presenting the merchandise in both channels with an emphasis on performance, including imagery of models striking multiple dynamic poses.

Customers are already responding to Athleta’s new brand voice. Their enthusiasm is reflected in rising NPS scores, according to Dickson. 

Banana Republic is also making progress on its brand refresh. Dickson noted that the banner previously focused on price but is now transitioning to emphasize its luxury side by pursuing a less transactional in-store experience.

Banana Republic’s new emphasis is on delivering experience in line with the minimalist style known as quiet luxury. This marks a new direction and audience for Banana Republic that will take some effort to achieve.

“Evolution takes time, and we know that there is work to be done to evaluate how to best engage and retain the premium customer,” Dickson said.

The Old Navy and Gap brands don’t have major refreshes in the works, but they will also benefit from the retailer’s focus on driving better experiences through storytelling.

“We’re going to consistently deliver merchandising presentations that tell stories with our product that excites our customers when they see it online and when they see it in our stores,” Dickson said. “And we’ll work on better and more engaging omnichannel experiences with clear and compelling pricing strategies.”