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Gap's Tech Motto: 'Change or Die'

SAN FRANCISCO – Open Networking User Group Spring 2017 – Gap Inc. is looking to technology transformation to thrive in the retail sector, where businesses are dying out like dinosaurs after the comet hit.

"Every day you hear about another retail company closing its store. Or you see a picture of a once-thriving mall looking like a ghost town," Rathi Murthy, senior vice president and CTO of Gap Inc., told attendees here on Tuesday. "In the retail sector, we are faced with a tremendous opportunity to embrace this change or become irrelevant." That's true for every industry, she said. And technology will enable that change. (See Target Looks to Open Source to Hit Bullseye.)

Gap Inc. has experience with transformation. Founded with a single store in San Francisco in 1969, Gap Inc. created the category of specialty retail. The company did it again in 1997, launching an online store. Founder Don Fisher had a slogan: "Change or die," Murthy said.

Gap Inc.'s Rathi Murthy
Gap Inc.'s Rathi Murthy

Nearly 50 years after its founding, Gap Inc. has 3,300 company operated stores and six brands, including Old Navy and Banana Republic, operating in more than 90 countries, with 15 websites. It operates in mobile, brick-and-mortar, online and cloud, Murthy said.

The company seems to be treading water in a market where its peers and competitors are drowning. It closed hundreds of stores, but sales are up slightly.

Gap looks to technology to manage its demand, as well as its supply chain. On the demand side, Gap sees variance by season and region. Clothing inventory in stores needs to change regionally in most places, but t-shirts may continue to sell well in Florida, even in winter. Regionally, China is even more of an early technology adopter than the US, Murthy said.

Technology needs to scale and also provides a platform to rapidly innovate, to let businesses experiment with new technologies while providing reliability and stability across platforms. That's difficult, Murthy says.

And Gap needs to marry legacy and new technologies.

Murthy outlined a vision that's common in the retail industry, of providing a unified shopping experience across channels. Imagine, she said, you are shopping for shirts online and abandon your shopping cart. Later, while you're passing a store, you get a message on your mobile device which reminds you of your shopping expedition. You go into the store and the shirts are available for you to try on, along with recommendations of complementary products.

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On the supply side, Gap needs to start with planning for seasons, styles, designs, pricing and location. It buys and sources materials from vendors and makes sure inventory is stocked and sold in the right stores. "It's all driven by technology," she said.

Gap is adopting a cloud-first strategy, and looks to SD-WAN to connect to cloud applications, Vismay Thakkar, Gap senior director of IT, said in a Wednesday presentation.

"SD-WAN comes to the rescue," he said. SD-WAN doesn't just provide a cost-effective solution; it also empowers business by putting features in stores, allowing engineers to roll out patches quickly and providing real-time visibility into operations.

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— Mitch Wagner Follow me on Twitter Visit my LinkedIn profile Visit my blog Friend me on Facebook Editor, Enterprise Cloud News

kq4ym 5/14/2017 | 5:34:32 PM
Re: improved lines Although I'm hardly a steady clothing shopper, I noticed that the Old Navy brand seems to be more prominently advertised on TV and even the internet, and I wonder if the advertising costs are driving the Gap to go with lower quality goods in that line. They certainly have their work cut out for them with all the difficulties retaliers are experiencing and improving their tech end may very well work out if they can get an ROI on the investment within a reasonable period.
[email protected] 4/29/2017 | 11:48:51 PM
Re: improved lines Sizing is such a big issue and in the US most retailers are doing little to address the size disparity issue. I recently shopped a European website and it was so much more comprehensive on sizing recommendations I was delighted to see the difference! Better sizing would help with returns and customer frustration.
Michelle 4/29/2017 | 8:25:48 PM
Re: improved lines @Maryam That's a good point. I haven't considered sizing issues for a while -- you're right though. Sizing has been an issue for me. I stopped shopping there because of the low quality and sizing. 
[email protected] 4/29/2017 | 6:14:32 PM
Re: improved lines It's true their quality has decreased across all their brands even their premium ones. I also see a lot of diversity in sizing that is impacting their brand. When sizes get irregular it frustrates consumers and costs them valuable time returning and searching for the right size.
Michelle 4/29/2017 | 3:22:16 PM
improved lines I hope this shift will help Gap improve the quality of some of its lines. They're choosing cheaper fabric options these days (at least for Old Navy). It would be great if technology could help them improve quality.
[email protected] 4/28/2017 | 11:32:55 AM
Re: Online advertising I do have to agree I shop Gap brands and I would describe it as a very traditional experience. I am not aware of any integration online beyond the provision of awards via an online account. They still promote online and offline sales which creates channel conflict and consumer frustration, also the check out process is always lengthy with one register active.
JohnMason 4/28/2017 | 8:46:24 AM
Reminds me of the company Change or Die: Besides coordinating online browsing with in-person opportunities to continue the sales process, one company is taking the initiative even further, by offering already coordinated clothing picks, sent automatically to the customer on a monthly basis. It's an "outfit of the month" club, but personalized (by computer, I suspect!) so that you don't get an army of people in the same neighborhood wearing the same thing. You might think it takes some of the browsing fun out of the shopping equation, but it could actually add variety and a sort of hopefully pleasant surprise element that could attract some people who are otherwise too busy to spend a lot of time browsing.
ak22 4/27/2017 | 12:12:04 PM
Online advertising Gap's use of online channels and advertising has been fairly unremarkable to date. They could learn a lot from these guys.
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