Sunday, December 28, 2008
Gap, Inc. was established in 1969 with the purpose of selling one product: Levi’s jeans. In 1991 Gap cut its ties with the Levi’s brand and limited its merchandise offerings to Gap’s private-label brand of jeans, khakis, and colorful one-pocket T-shirts, which had been introduced beginning in 1974. Despite the company’s profit and sales growth through 1991, sales went into a slump in 1993 and 1994, increasing just 1 percent each year. The chain reported no sales growth in 1995. As the downward slide continued, Gap began looking for ways to expedite a turnaround. Part of the strategy included opening more than 200 new stores in 1996, and in 1997 its in-house marketing team created a new brandbuilding campaign titled ‘‘This Is Easy.’’
Gap’s $15 million ‘‘This Is Easy’’ television campaign was introduced in April 1997 to promote the company’s line of Easy Fit Jeans. Although a few Gap commercials appeared on television during the early 1990s, the ‘‘This Is Easy’’ campaign marked the company’s first significant journey into television advertising since the mid-1980s, when the Gap opted to put its marketing efforts into print advertising. The spots were intended to renew enthusiasm and boost sales at Gap stores, which in 1996 showed the poorest sales performance of the three Gap Inc. divisions—Gap, Old Navy Clothing, and Banana Republic. Gap was also responding to the highly competitive market for denim jeans by reasserting its strong brand image.
The renewed foray into television and increased spending on advertising helped Gap achieved its goal of growing sales and boosting its brand image. Following the campaign’s launch in 1997, sales increased 23 percent from the previous year. BusinessWeek listed Gap 17th on its 1998 list of best-performing companies, and the chain announced plans to open 300 new stores that year. Also in 1998, Gap began a new global marketing campaign that was a modified version of its ‘‘This Is Easy’’ campaign.
The Gap skated along relatively smoothly after its inception in 1969 until the mid-1990s, when management realized that other retail companies were imitating its store design and products, essentially relegating the Gap to being just another retailer. The stacks of jeans, khaki pants, and multicolored one-pocket T-shirts that could be purchased at every Gap turned up in other stores, often at lower prices. Sales figures reflected this turn of events. BusinessWeek reported that, although profits at stores that had been open for more than a year had grown an average of 12 percent from 1986 to 1991, earnings skidded in the mid-1990s. Sales grew a mere 1 percent in both 1993 and 1994, and there was no growth in 1995. Donald Fisher, Gap founder and chairman, confessed to BusinessWeek, ‘‘We were looking at ourselves as a store rather than a brand. When you do that, you draw thick, heavy lines around your freedom.’’
Marketing strategies were shifted, and the company’s upper management made efforts to solidify Gap’s brand image. Millard ‘‘Mickey’’ Drexler, Gap’s president and CEO, studied companies with strong brand presence, such as Coca-Cola, McDonald’s, and Nike, and concluded that Gap should follow in their footsteps. According to BusinessWeek, Drexler discovered that ‘‘the first thing that hits you is that you can buy [such highly branded products] in a lot more places than you can buy Gap.’’ The company, therefore, opened 203 new stores in 1996 alone. Drexler also introduced new products, such as nail polish and perfume, and he decided to invest more time and money in advertising. Drexler told Advertising Age that, in addition to building the brand, ‘‘We also realized we had to expand what advertising and marketing mean to this company.’’ The Gap, reported BusinessWeek, increased its advertising budget and spent an estimated $90 million in 1996, compared to $64 million in 1995, and comparable store sales (sales at stores open for more than a year) jumped from being flat in 1995 to a 5 percent increase in 1996.
The Gap’s appeal had spanned generations, and thus its target market was also wide-ranging. When the company opened its first store in 1969 and sold Levi’s jeans, it appealed largely to the youth market, consumers between the ages of 15 and 25. The Gap attempted to expand its core consumer group in the 1970s by adding additional clothing items and active wear, but for the most part its popularity through the 1980s remained with teenagers and the youth market. In the 1990s, however, Gap began to open more stores and offer new products to expand its consumer base.
The Gap customer, regardless of age, appreciated comfortable, simple clothes and went to the Gap for its ease of shopping and inventory of classic styles. In a conversation with MSNBC Business Video, Warren Hashagen, Gap’s senior vice president and chief financial officer, explained the diversity of its consumers: ‘‘[The Gap] is certainly a company that likes to think of itself as relevant to the youth of America as well as people of all ages.’’ Through its merchandise the company ‘‘give[s] a consistent message to the customer how easy it is to take clothes from our store and mix with their own wardrobe for their own style.’’ June Beckstead, Gap’s vice president of product design for the women’s division, asserted that Gap clothes appealed to the full spectrum of consumers.
She told the Wall Street Journal, ‘‘We dress
America. . . . You walk down the street, and you see people wearing our clothes. They’re young and old, they’re hip and they’re not.’’
For the ‘‘This Is Easy’’ campaign the Gap chose to hone in on the target market that consisted of younger men, including teenage boys. The men’s line had not performed as well as the other divisions, and Gap wanted to lure back male customers. Alice Ruth, an analyst at Montgomery Securities, told the Wall Street Journal that the men’s clothing line had suffered because it had gotten a bit too trendy and because the Gap had deviated from its reputation as a store that offered wardrobe basics such as jeans, khaki pants, and solid-colored T-shirts. The Gap hoped to reassert its position in men’s clothing by focusing again on the basics. In the Wall Street Journal McCadden explained the ‘‘This Is Easy’’ campaign’s message to men:
‘‘Gap offers you all the pieces. No matter who you are there is something at the Gap for you.’’
Because the Gap was a major retail clothing chain as well as a manufacturer of private-label clothes, it faced competition in virtually every corner. When asked during Biz Buzz, a business-oriented show on the cable network CNN, about the companies that provided competition, McCadden responded, ‘‘In the case of Gap, probably just about everyone. I mean we’re [a] very large, very broad brand . . . I think how we view the brand and how we manage the personality and the message of the brand really isn’t in relation to competitors.’’ Hashagen, in an interview with MSNBC Business Video, agreed with McCadden and stated that the Gap provided a level of quality and service that set the company apart from its competitors. Hashagen noted, ‘‘there’s always a tremendous amount of competition in retail. We think of our business as being a great value . . . The quality of the product, how long it will last, how well it works with your other wardrobe items or our store, the service level you get, how easy the store is to shop and all of that is meant to give a good value overall.’’ Regardless of whether Gap stores possessed a competitive edge over other retail and private-label companies in terms of value and brand identity, the lack of sales growth in the early 1990s indicated that the company needed to adopt new strategies to boost profits. Competition from stores that imitated Gap’s core products and display styles prompted the company to strengthen its brand identity and provide a constant flow of new products. In fact, approximately every six weeks Gap stores introduced and rotated styles. Robyn Waters, the trend director for Dayton Hudson’s Target Stores, told the Wall Street Journal, ‘‘If there is anything we emulate it’s [Gap’s] great core product and the constant flow of newness and fresh product all the time.’’
According to figures from the market-research specialists NPD Group, published in the San Francisco Examiner, the jeans industry exploded in the 1990s, hitting $8.7 billion in sales in 1996 alone. This reflected a 10 percent increase over sales in 1995. Beverly Butler, a spokesperson for Gap, said, ‘‘It’s a really crowded market and getting more so.’’ Designer labels such as Tommy Hilfiger and Nautica entered the jeans market, and private-label jeans by Sears and J.C. Penney grew in popularity. BusinessWeek published data compiled by NPD Group that indicated a considerable increase in the market shares of private-label jeans, from 16 percent in 1990 to 25 percent in 1997. The Gap, as the largest manufacturer of private-label jeans, held some of this valuable market, but as flat earnings demonstrated, it needed more.
The Gap’s brand-building ‘‘This Is Easy’’ campaign debuted on prime-time television on April 27, 1997. In the initial two-week period the first six spots were aired nationally more than 600 times on the major networks and also on cable channels, including MTV, ESPN, and Comedy Central. As McCadden explained to the Los Angeles Times, ‘‘That whole campaign of easy-fit jeans really springs off a 28-year history at Gap of personal style . . .What we’re doing right now is simply taking what’s been a core equity and carrying it to new mediums.’’ The resurrection of the ‘‘Fall into the Gap’’ theme and jingle served both a nostalgic and marketing purpose. McCadden elaborated, ‘‘It subtly says to someone, ‘This brand has a great history. You’ve trusted this brand for a long time.’ ’’ Jeans were selected as the Gap product that best represented the brand image.
The decision to return to national television advertising in full force after a hiatus of nearly a dozen years was necessary to achieve the ubiquity of a well-known brand. As Drexler related to Advertising Age, ‘‘TV was critical for us . . . You can’t consider yourself a serious marketer without, in fact, having a major presence in TV long-term.’’ Hank Wilson, a consumer-goods analyst for Hambrect & Quist, voiced his agreement in the Los Angeles Times when he stated, ‘‘The Gap is of a size and scale where traditional television advertising can yield the kinds of awareness improvement that they would probably like to see.’’
The ‘‘This Is Easy’’ television spots featured jeansclad celebrities singing, playing musical instruments, dancing, or performing other artistic specialties they considered to be easy. The Gap’s choices of celebrities were designed to attract as wide a range of viewers and consumers as possible. Younger stars drew in the youth market, while older celebrities were chosen to appeal to a more mature crowd. Each spot was filmed against a stark white backdrop to evoke the Gap’s simple and easy style and ended with the Gap logo and the tagline ‘‘Easy Fit Jeans.’’
The first spot starred rapper and actor LL Cool J. Outfitted in Gap jeans and T-shirt, LL Cool J offered his take on what he considered to be ‘‘easy.’’ McCadden explained the concept of including celebrities in the television spots in his conversation on CNN’s Biz Buzz when he said, ‘‘The whole idea of that campaign is about personal style, and what we do is we invite the stars to come, and the first 20 seconds is about them. It’s what’s easy for them. They wear our easy fit jeans. LL arrived on the set and had actually written that entire rap himself about the Gap.’’ The pervading theme of what is easy also conveyed the message that Gap provided ease in shopping, especially for males. McCadden told the Los Angeles Times, ‘‘The message is that we’ve figured it out for you. We’re going to make this as easy as it can be.’’
LL Cool J’s rap started with ‘‘I know you like your outfits stylish. Any other line but the Gap is childish. Everybody working there’s a personal stylist. You’re fallin’ once you hear the Gap callin’,’’ and it included ‘‘‘G’ is for gritty, ‘A’ is for always, ‘P’ is for power and the people.’’ To conclude the 30-second spot, LL Cool J stated, ‘‘How easy is this? Fall into the Gap,’’ and he then threw a kiss to viewers. Although the spots promoted Gap’s Easy Fit Jeans, the company and product being pushed were not revealed until the end of the ads, when the tagline and Gap logo appeared. ‘‘This Is Easy’’ included four additional television spot during the initial campaign launch. Two spots featured actors Lukas Haas and David Arquette, with Haas playing the keyboard while Arquette accompanied on the trumpet. Arquette ended by stating, ‘‘This is definitely easy,’’ and the ‘‘Fall into the Gap’’ theme was heard. Rounding out the ads were two spots with actor Eric Mabius, who beat on conga drums and concluded, ‘‘This is really easy.’’
At the beginning of July 1997 the company initiated a radio campaign and introduced several new television spots. The two radio spots featured LL Cool J and the musicians Junior and Tanya Rae Brown and ran in major markets that included Los Angeles, San Francisco, Chicago, New York, and Boston. One of the new television spots showed ballet star Nikolaj Hubbe dancing in jeans and sneakers, with jazz piano music in the background. Hubbe announced, ‘‘This is super easy,’’ and he finished by performing pirouettes to the ‘‘Fall into the Gap’’ theme. The Hubbe spot debuted in United Artists Cinemas, where it ran for a month before moving to television. The other new spots featured actors Peter Berg and William H. Macy and country music stars Junior and Tanya Rae Brown. Macy, who appeared in the motion picture Fargo, played a harmonica, and Berg, star of the television show Chicago Hope, strummed an electric guitar. Junior Brown performed on his ‘‘guit-steel,’’ a guitar and slide steel combination he created, while his wife played a guitar. Brown surmised, ‘‘This is totally easy,’’ and the spot closed with the signature theme.
The Gap continued its tradition of using the print medium and invested heavily in outdoor advertising. The company also used its stores as an advertising venue, putting approximately 170,000 posters in its windows. Billboards displayed the Gap ads, and enormous outdoor signs known as spectaculars, which were large enough to cover the entire side of an office building, appeared in major cities. McCadden, in his discussion on Biz Buzz, explained, ‘‘The whole idea behind them is to really present Gap jeans in a different format . . . [W]e like the idea of the walls because they just present it to the consumer in sort of a new . . . light. And they’re also—you know, they’re larger than life.’’ In 1998 the campaign was revised and a new series of commercials was released to promote another of Gap’s jeans styles: Original Fit Jeans. The new campaign included television spots and prints ads that followed a format similar to that of the ‘‘This Is Easy’’ effort. No specific budget for the campaign was released, but a company spokeswoman told Women’s Wear Daily that it was Gap’s ‘‘biggest campaign to date.’’ The four 30-second television spots, which were released in July, featured music stars from various genres, from blues and jazz to hip-hop and rap. Appearing in the spots were blues guitarist Kenny Wayne Shepherd, singer and rapper Missy Elliott, legendary trumpeter Herb Alpert, and hip-hop group Run-DMC. In a press release Gap described the campaign as a ‘‘tribute to originality.’’ Each spot included the chain’s familiar white background and the theme ‘‘Fall into the Gap.’’ The print ads showed models dressed in Gap’s Original Fit Jeans. Ads ran in consumer magazines such as Vanity Fair, Vogue, and Rolling Stone beginning in August. The campaign also included billboards displayed in 24 cities worldwide that featured models wearing Gap Original Fit Jeans.
The return to television and the increase in spending paid off for Gap. According to BusinessWeek, Gap’s 1997 sales increased 23 percent from 1996, and the company ranked 17th on BusinessWeek ’s 1998 list of best performers. Industry executives applauded the Gap’s marketing efforts and brand-building campaign, and it became the company to emulate. Alan Millstein, a retail analyst and publisher of Fashion Network Report, told Advertising Age, ‘‘They made their name into a brand . . . They are one of the few retailers that has that luxury.’’ Sergio Zyman, senior vice president and chief marketing officer at Coca-Cola, agreed: ‘‘The Gap accelerated to the point that the brand is on fire . . . There is no competitor who has a kind of brand essence that can pose a threat.’’
The Gap showed no signs of slowing down. The company announced plans to open 300 new Gap stores in 1998, and by May 1998 the company operated more than 1,000 Gap stores, up 15 percent from the previous year. Hashagen told MSNBC Business Video, ‘‘I think if you have a good store, a destination people want to shop at, you can have quite a few of them.’’ The Gap appeared poised to become ubiquitous. According to Stores, Fisher believed that there was plenty of room for more Gap stores: ‘‘When you look at the total number of dollars spent on our kind of apparel, we’re a small market share player. I think Wal-Mart does $30 billion and they continue to grow, so I have every reason to believe that we will continue to grow as well.’’
While the 1997 and 1998 marketing campaigns and store-expansion efforts seemed to pay off with increased sales and praise from industry insiders, trouble was looming on the horizon for Gap, and it was coming from its sister chain Old Navy. In 1999 Gap was reporting that sales were flat or down compared to the previous year, versus Old Navy, which had increases of 20 percent. Old Navy, with its bargain-basement prices on products that were similar to those that Gap was selling, was winning away Gap’s customers. Gap’s clever advertisements with music stars that crossed generations were beginning to have a negative effect as well. Analysts complained that Gap lacked focus. Bob Buchanan, an analyst with A.G. Edwards, told BusinessWeek, ‘‘I’ve got a problem when I see Gap trying to appeal to people age 12 to 60.’’ In late 1999 Gap announced plans for a new marketing campaign to kick off the 2000 spring season. It shifted its focus from jeans and basic khakis and tees to its fashionforward sportswear in bright colors. Also in a change from its 1997 and 1998 efforts, the new campaign had no tagline.