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Comment RSSGap Closing Stores; Ebay Growing?
Written by Pace LattinOctober 13, 2011 # 7:19 pm # Marketing Insights # 2 Comments
Gap Inc, the humongous discount clothing retailer , which runs the Gap, Old Navy and Banana Republic chains, detailed plans on Thursday to close 189 locations, or 21 percent of its namesake Gap stores in the U.S., by the end of 2013.
U.S. But even before the U.S. economy took a turn for the worse, tts sales in the U.S. have eroded considerably. In an interview on the eve of Gap’s investor day on Thursday, President of Gap North America Art Peck told Reuters that the company had lost its way by straying from high-quality jeans and other basics. “What’s expected of us is pretty clear,” Peck said. “I think it’s been us who’ve kind of wandered around.” Peck joined Gap in February following a management reshuffle.
This news is interesting to marketers because it shows that even though the economy is doing worse, and in theory people would be looking for discounts, companies like Gap are actually doing worse. Why? Its interesting to note that earlier this year EBAY actually had a net income last year of $476 Million on revenue of $2.55 Billion. That’s an increase of 20 percent from the previous year.
That news is extremely interesting for marketers because it shows that while people used to shop in discount outlets during bad times, they are now turning to the internet. That means that marketers have an opportunity to offer discount products first, because even while people have less money, they are still shopping ONLINE. Even with the economy, the growth of people getting online still raises each year and is considered an essential part of any household. Comparison shopping is made easier, as is any type of deal shopping.
Is this going to be a trend for more and more brick and motor discount outlets closing, making room for online deals?
Written by Pace Lattin
Pace Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.
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People are increasingly shopping online and less offline. It has nothing to do with the economy. It has to do with time. Some people shop as a leisure activity; they want to go to stores and try on stuff. Others simply want to buy what they need/want/can afford. And they are busy. Increasingly, they are saving time by shopping online.
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Great article Pace. I think you will be seeing plenty more of these large chain distributors like Gap closing their brick and mortar locations. They can cut millions off their bottom line with savings in overhead, payroll etc…in selling their items through their respective online portals. What we should be worried about is: As more and more companies choose this path to profits, what happens to our unemployment rate after these locations continue to close down? Scary future ahead!