Customer centricity has long been a top priority for many brands, but it took on a new urgency in 2020 when COVID-19 drove brands to find new ways to serve and engage with customers. This is the story of how Gap Inc. did just that.
First, a bit of backstory. Over the past year, retailers’ response to COVID-19 was to condense their roadmap for digital transformation from years to weeks, an unprecedented pace of change. They were scrappy — making quick decisions to provide the products and services customers needed — from personal protective equipment (PPE) to enabling curbside pickup and contactless payment and delivery.
As part of our Becoming Retail series, we conducted extensive research to see how retail leaders responded to the crisis. We asked how their investments changed due to COVID-19 and found that 76% moderately or significantly accelerated their investments in technology, while 47% said they moderately or significantly accelerated their investment in people.
A great buy online, pickup in-store or curbside pickup experience is as much about the processes and innovation from our store associates as it is about technology that supports the capability.john strain, chief digital and technology officer, Gap inc.
Case in point: Gap Inc. pivoted quickly to support its customers with high-quality non-medical grade masks and went on to launch and scale capabilities aimed at making life easier for its customers. We spoke with John Strain, Gap Inc.’s chief digital and technology officer, who told us that while technology is an enabler to customer-centricity, people are at the core.
“A perfect example,” he said, “is that a great buy online, pickup in-store (BOPIS) or curbside pickup experience is as much about the processes and innovation from our store associates as it is about any technology that supports the capability.”
He explained that Gap Inc.’s strategy, store, management, and technology teams all worked together across its brands to scale and improve its capabilities. This was especially important throughout 2020 and the COVID-19 crisis. In November, Old Navy and Athleta rolled out in-store service hubs, Old Navy’s Convenience Spot, and Athleta’s At Your Service, providing on-the-go customers a way to bypass the checkout line for faster service.
Gap went one step further with a “doorbell” feature that allows customers arriving for curbside pickup to alert store associates without having to call the store. It’s all part of its focus on convenience, speed, and safety for shoppers.
As a purpose-led organization, Gap Inc. and its family of brands pivoted on a dime to help employees, customers, and other companies who were in need during the health crisis. To help, the company leveraged its manufacturing muscle to produce millions of non-medical grade masks for customers.
“We leveraged our deep supply chain relationships and agile operations to quickly come up with a solution that provides companies in both the private and public sectors with high-quality reusable, non-medical grade cloth face masks,” said Strain.
Since April 2020, Gap has sold over $225 million worth of masks to consumers and through its B2B business.
It didn’t take long before Gap Inc. heard from other companies who wanted to supply their employees with the same masks so they could safely return to work. To provide this product, Gap Inc. used Salesforce Commerce Cloud Quick Start for B2B Commerce and partnered with Capgemini to implement and service a custom website for masks in less than five weeks. Together they help manage purchase orders and deliver information about the program to businesses.
Since April 2020, Gap has sold over $225 million worth of masks to consumers and through its B2B business. And it credits masks to bringing an astounding number of new customers, more than one million, into its portfolio of brands.
High performing retailers use digital for better customer engagement
Our Becoming Retail research revealed the key success factors in digital transformation, which included not just making the right investments, but precise execution. What helps some organizations succeed where others fail?
- Making sure everyone in the organization understands the need for digital transformation
- Understanding who the customer is and what they want
- Establishing and support a culture that embraces risk-taking and experimentation
- Getting buy-in from C-level executives including, most importantly, the CEO
That is the case at Gap Inc., where Strain said digital transformation, “is the way we leverage our integrated technical capabilities to deliver a better customer experience [which is] both omni-channel in nature and digitally-enhanced.”
Gap Inc. is also seeing more opportunities to reposition the knowledge and insights that its teams bring to bear, enabling them to elevate the customer experience. Its pilot tests with its Athleta and INTERMIX brands are great examples of digital transformation that are people-led. “Experimenting with one-on-one virtual styling sessions gives our associates the power to deliver next-level personalization, services, and convenience to shoppers,” said Strain.
“While the technology enables virtual clienteling, removing some constraints, the technology provides an opportunity for our store associates to demonstrate their product, brand, and customer knowledge in a new way,” Strain said.
He shared that its omni-channel capabilities and scaled operations have led to customers spending 6% more with Gap brands in the third quarter of 2020 vs. 2019. It also saw a 50% year-over-year increase in net sales volume for BOPIS and curbside pickup orders and a more than 60% increase in online net sales across all its brands.
“These results reflect the strength of our online business and our commitment to meeting the shopping preferences of our customers through our leading omni platform,” he said.
Retail leaders predict 33% of online sales will be made through marketplaces in 2023.becoming retail research
We also asked retail leaders to look into their crystal ball and forecast the volume of online purchases. Retail leaders predict 33% of online sales will be made through marketplaces in 2023, underscoring both a competitive threat and an opportunity for innovative cooperation between brands and marketplaces. Nearly tied for second are the retail and brand websites with 26% and 25% of online purchase volumes, respectively. Emerging digital touchpoints, such as social media, are predicted to account for 16% of online purchases in 2023.
Gap uses data to turn customers into brand loyalists
Most brands have some sort of loyalty program. The trick is using technology to leverage customer data and loyalty to reward your customers and personalize interactions. To that end, one of Gap Inc.’s top company priorities this year is to convert more of its customers to be cross-brand and channel loyalists, Strain said.
In September 2020, Gap Inc. leaped forward with a refreshed membership program that allows shoppers to earn and redeem rewards across its family of brands, with Navyist Rewards, Gap Good Rewards, Banana Republic Rewards, and Athleta Rewards.
“Although each brand expression has a different look and feel, customers can earn and redeem rewards across our family of brands. Think of it as one membership for all four brands,” said Strain. “The reason this is so important is that the more we can know our customers, the better we can support, engage, and reward them.”
They’re already off to a great start, enrolling more than 3.5 million new loyalty members (and counting) in the first two months. As it adds more customers to its program, the company uses that data to transition customers from a one-and-done transaction to a long-term cross-brand and multichannel customer. To get there, it’s undergoing a customer segmentation exercise that has yielded a dozen potential target segments across the entire U.S. apparel spectrum.
It then got more granular, applying data science to its existing customer file for the last two years, looking at demographics, psychographics, and geographic insights to better target and serve customers, and selected two or three target segments for each brand.
“We are continuing to use this segmentation data to help us drive relevant engagement with our customers through targeted marketing: personalizing emails, onsite experiences based on channel preference, loyalty status, and product affinity. And we are leveraging these segments to help drive the product life cycle.”
Personalization at scale, he said, is a major focus for Gap Inc., and “the new currency for customer relevance in 2021.”
Indeed, that is a key focus for Salesforce with Digital 360, which helps brands deepen the customer relationship with integrated marketing, commerce, and digital experiences.
We asked Strain to describe retail in just one word, and he replied with “audacious.”
“As a global retailer, we like to lean into our risk-taking history by seizing opportunities to create an incredible experience for our customers,” he said. “To lead the pack, you have to continuously grab customers’ attention in a meaningful way and offer them a more convenient and personalized experience, and sometimes this means pushing past boundaries and inspiring teams to create with audacity. Always go for the bold idea you’re passionate about and dedicate time to make it a successful one.”