The competition or the total win? -The United States clothing brand gap line under the integration of the way

This article is for the third issue of the 2010 Sales and Marketing Channel edition cover feature

Although it has not yet formally entered the Chinese market, the Gap Group (http://gapinc.com/) and several of its major brands (including Gap, Oldnavy and Bananarepublic) have been recognized by many people. Founded in 1969 in San Francisco, California, the company has more than 3100 direct stores and more than 130,000 employees in countries such as the United States, Britain and Japan.

Figure I: a Gap offline entity store

But even more rare is that gap on the one hand online real store sales continue to maintain the industry's leading position, but on the other hand, the expansion of direct business E-commerce channels as the company's key strategy, and achieved very good results. Since 1997, Gap company officially began to try online sales, as of 2009 the latest annual earnings data, from the group's sales of the company's website has more than 1.2 billion U.S. dollars, accounting for nearly 8% of total sales. Also is to see the Gap group in the achievements here, a lot of other traditional clothing brands began to seriously think and follow up the construction of e-commerce channels this thing.

Figure II: From the 2004-2009 Gap Group's online website sales and physical store sales trend (in million U.S. dollars)

Source: Gap Group Annual earnings

If we divide brand companies into 3 categories, a class of companies called "pure cement", that is, only online entities store the traditional brand, a class called "Pure Mouse" company, especially in the absence of offline entity Shop Foundation, directly from the shopping site to start a new brand; and there is a kind of so-called "mouse + cement" Company, The combination of the above two, on the one hand, the existing offline entity store support, on the other hand also support online shopping company. In recent years, with the continuous improvement of e-commerce environment, more and more "pure cement" companies began to consider whether the need for E-commerce channel construction, but a big problem is – how can companies maintain the balance of offline channels and online channels, so as to ensure the maximization of global sales? Are these two channels competing with each other or are they likely to promote each other? Rather than infer this dilemma theoretically, let's look directly at how the Gap group did in its more than 10 years of practical exploration and experimentation.

From attracting users, transforming users, retained users in these three aspects, such as gap, such as the traditional well-known brands to develop direct e-commerce channels, than other so-called "pure mouse" E-commerce brand, has a lot of innate advantages:

Cross-channel crossover promotion – The first major difficulty in operating an E-commerce site is how to create traffic, and just as a big shopping mall's first concern is how to get more potential customers into their own doors, so many e-commerce sites cost more than all the costs of marketing promotion. Gap Company in the early days of the first full use of their own vast number of physical stores network to do the promotion, including in the shop advertising posters to join the promotion of their own shopping website address and let the cashier's staff for the customers are paying the oral recommendation, It even provides a link to the gap.com machine in some key stores for customers to try; A lower user acceptance threshold – when a shopping site successfully attracts potential users, the second important task is how to facilitate the actual conversion of these users, from simply browsing to the order. Even in developed countries such as the United States, one of the most important factors affecting whether a user is placed on a single E-commerce website is the issue of Brand Trust. Gap has been through several decades of physical store operations so that the vast number of users understand and familiar with their own brand, and the construction and maintenance of a good brand reputation, so users are considering whether or not from the gap under the E-commerce site shopping, will naturally pass this trust, so as to enhance the first shopping conversion rate; Retain users through excellent service – once the user has crossed the threshold for the first online shopping, the third important task that follows is how to keep these users, and Gap is the best service to ensure customer loyalty, and the basis for these services is to provide the backing of the entity stores: return services – If it is in a "pure mouse" shopping site orders and receive goods found not particularly satisfied, for example, the size of clothing is not suitable and need to be returned, how to send the goods in hand back is a headache, but if it is in the gap of the electrical business site shopping type problem is very simple, in addition to mail back , users can also choose to receive the goods near to get their familiar with the offline entity stores in exchange; Change clothing service – for the relatively high-end Banana Republic (Banana Republic) brand, if users buy clothing online after the discovery to make some minor changes, such as adjusting the length of the trousers , you can also easily take the goods to the offline entity store to obtain free services, so that users buy online when the more reassuring;

These innate advantages are the reasons why the Gap Group's shopping site group can generate revenue from direct sales figures, at the same time, these shopping site groups also provide a large number of indirect benefits to the group, including the overall brand reputation of the promotion, to provide customers with a seamless integration and always consistent shopping experience, But also collect a lot of valuable consumer behavior data, for example, all online customer behavior can be recorded by the background system, including browsing and final purchase of goods, point over the page, purchase frequency and habits and so on. These data would be very difficult to collect through traditional offline physical stores, once a brand tried to use RFID wireless technology to mark every piece of clothing in the store, hoping to keep track of which goods were brought to the fitting room by customers, but eventually did not buy, and finally because of the high cost of implementation and limited effect of the relationship.

It is precisely because of these direct and indirect benefits, GAP Group has long been determined to build E-commerce channels as the core of their competitive strategic advantages, from the organizational structure, policy and implementation of a large number of support. For example, the e-commerce operation team is set up as a more flexible department, not affiliated with the traditional shop sales system, and even expense for the operation of its shopping website in order to enhance its efficiency. and from the incentive and management mechanism for online orders and customers to provide good service support this work as one of the evaluation indicators issued to each entity stores.

If the integration line under the launch of the channel strategy in the early days more through the gap in the traditional offline channels for the emerging online channels to drainage and support, then to the Gap Group's website has a firm foothold today, It is even more important to try to make better use of the already established influence and user base to reverse drive the real-store sales. In particular, the overall U.S. economic environment is still relatively depressed, the real store sales impact more obvious. A recent example is the Gap group, which launched a Web site called oldnavyweekly.com at the beginning of 2009 for its low-cost VW-branded Old Navy (Oldnavy), which has achieved good results in leading users to purchase offline physical stores.

Figure III: Oldnavyweekly.com, aimed at online marketing and creative pull offline entity store sales

Oldnavyweekly's website actually only has a simple homepage, but for the user's stickiness is very strong, on the network may even find specially for this website discussion group and the chat room. Oldnavyweekly's main selling point is that it will be fixed in a week for a cycle of a certain number of different types of single shopping coupons (including a full scale discount and shopping full of specific amounts of cash deduction can be obtained), these coupons can only be used in the Old Navy entity stores. It will also launch a weekly special sale this week, basically using 50 percent of the following ultra-low prices to provide the most commonly used clothing style, but also only online store sales.

Oldnavyweekly Web site can quickly spread on the network, on the one hand, is because of the benefits provided to users, such as irregular will provide "shopping over 100 yuan can discount off 75" Such a super coupon; On the other hand, these coupons are not simply listed on the site, Instead, let the user on the site through the "Treasure hunt" way to do some very simple games, such as figure three, users by the mouse will be different jacket and trousers to match may find different types of coupons, And that's why there's a lot of fans coming in every Thursday night to talk about where the latest best deals are hiding, and start refreshing Oldnavyweekly's website (because weekly coupons are updated in the evening of Thursday).

Figure IV: oldnavyweekly attract online users through the interactive small game to find available offline entity store coupons, directly after printing to the shop when the cashier scan barcode

Gap Group Line Online channel integration is indeed a good success case, proved that if the strategy formulation and implementation of the correct, traditional brand operators can complete the perfect "mouse + cement" rebirth, to achieve a win channel. But at the end of the gap is to add some of the specificity of the case. First of all, Gap group belongs to the vertical integration brand, in addition to a small number of overseas shops, the rest of the shops are direct store, so the group for the offline channel has a strong control, while others do not direct or comprehensive control of the line under the channel of traditional brands in the line under the online multi-channel sales will encounter more resistance Second, the Gap group's mainstream products are just more suitable for network sales of casual clothing type, on the one hand size relative to the standard (such as shirts only need to use large, medium and small to distinguish), but also different from high-end fashion, the user's own tolerance for casual wear is high.

If you have to compare the gap case in the Chinese market, you may have to look at it. No matter from the fashion style or from the construction of proprietary E-commerce channels have a certain similarity, and it is said that the annual sales of the Web site is also long past tens of millions (http://www.e-giordano.com/). Overall still hope to be able to emerge in the Chinese market a better line under the multi-channel sales integration case, only in this way can further promote the development of the entire industrial chain and transformation. After all, for brand-name business, whether it is "pure mouse", "pure cement" or "mouse + cement", the ultimate goal should be service users, channel balance should be for the service, must not be the cart before the horse.

Figure V: the Direct business website

Comment on: Brand business dilemma?

On the one hand, if the company chooses not to sell its goods directly through Internet channels, this will push customers to competitors who offer online direct sales (other brands like the customer base or the parallel and imitation goods on Taobao), but on the other hand, if the company chooses to open a direct shop on the Internet, They will also be complained of by existing distributors and retailers that they have robbed their businesses, and even turned to foster and broker other brands. Is this really a dilemma without a way out?

For a brand business, channel management has always been an important knowledge. The problem of channel conflict (Channel Conflicts) has been in the industry for a long time, especially with the rise of e-commerce concept in recent years.

There are many benefits to building online channels, especially with the fact that more and more user time is spent on the internet. Therefore, the traditional brand operators must also start to consider their own website construction, but in the construction of the strategic need to carefully analyze clearly.

Cautious type – This type of brand is not particularly suitable for net sales (such as car manufacturers), or the existing offline channel is very strong (for example, some consumer goods brands, including toothpaste, shampoo, etc.), these brands can choose on their own website does not provide goods for sale, But there should be a lot of product information and how to find the nearest offline channel to purchase these valuable information for the user; Radical-this type of brand is the product itself is more suitable for network sales and the existing offline channel has a good control, similar to the previous article mentioned gap or the Chinese. These brands can choose more aggressively to promote and support their own electronic business shopping site, however, it is recommended that at least the price of products to be done and line online channels consistent, otherwise the conflict of interest is too obvious; fold medium-This type of brand is between the above two, on the one hand, it is worth trying to network channel Direct marketing benefits, On the one hand, we hope to maintain good relations with the existing offline channels. These brands can try to balance the interests of the two sides by means of a compromise, such as setting up a sub brand for Internet sales only, keeping the distribution relationship between the original main brand unchanged, or providing some additional benefit for the satisfaction of the online channel. Including to the online revenue and the original line of the channel of profit sharing and benefit share. When Nike, in order to persuade one of its biggest online channel to allow Nike to open an online marketing site, the franchise of a popular sports shoes to the channel, to ensure that not even on their own website sales.

Regardless of the traditional brand to choose which way to enter the Internet, it is important to first analyze their environment and design the right strategy, and then at the implementation level to ensure that the existing offline channel with adequate and effective communication, reach a consensus. So as to avoid the so-called "brand business dilemma."

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