A Tale Of Two Attitudes: The Gap Cancels Orders While ‘Omnicality’ Can Save Stores In The Coronavirus Environment

Management of The Gap has just cancelled summer and fall orders according to reports in the Sourcing Journal. The company has asked suppliers not to ship completed summer products except for products designated for its e-commerce business and to hold off on production for fall. Fabric suppliers were also reported to have been asked to stop production and keep all goods in their facilities. Those actions reflect a very pessimistic outlook.

From my perspective, Gap’s management decision is wrong, since it hurts their supply lines and will have an irreparable effect on relationships with their suppliers into the future. While the COVID-19 pandemic has caused closure of stores, social distancing, and a virtual lockdown of the whole country, Governor Cuomo’s most recent assessment of the New York’s situation suggests a more positive future. He sees a gradual reopening of business, with qualified, healthy people permitted to begin trade again.

The Gap is looking at a much more negative scenario, with a glum outlook for fall. I hope they are wrong. And, if they are, it will be tough to get the right merchandise into the stores to sell at the right time as suppliers cannot turn on a dime. Maybe the company is considering permanent closure of some of their units. Newly appointed CEO Sonia Syngal promised decisive action that will ensure they will emerge well positioned to compete in the years ahead. Yet, I believe the disruptive action that was just taken is irreparable and undermines performance prospects into the future; the company to be ill-prepared to service customers fully.

David Le Douarin, founder of Advalo and located in Paris, suggests that a heavy reliance on e-commerce is both essential and crucial for retailers in this coronavirus crisis period. There is an urgency to compensate for the total loss of in-store activity by generating qualified traffic and sales on the website.

In the current environment, the brands that manage to stand out and maintain a close and trusting relationship with their customers are the ones who will succeed over the long term. Mr. Douarin feels that by rethinking their marketing approach and adopting an omni-channel focus, they will be able to direct sales to the web today and eventually see traffic return to stores when the crisis passes.

Omnicanality (a term coined by Mr. Douarin) consists of customers buying ‘in a store’ on other channels such as e-mail, social networks, SMS, etc. It represents a significant value creation opportunity for companies. Thus, brands can maintain their activity in a period of crisis, like the situation we are experiencing now.

The key to that significant value creation is careful mining of the data generated by all of the online and social shopping that takes place. By reviewing all of the web traffic activity and applying artificial intelligence tools to the data, brands will be able to identify their best customers, detect underlying purchase intentions and come up with individualized marketing that will boost their sales.

I cite these observations in contrast to Gap’s negative attitude. Mr. Douarin’s approach to servicing customers will enable retailers to maintain a stronger relationship with customers. That will help them sustain, even accelerate sales performance now when stores are closed. A comprehensive customer-focused strategy like that will benefit the future when stores will gradually reopen.