ITM Case Study

Section C- Group 6
Predicting Sagrika Behera- 20A2HP405

Consumer Tastes Ashwik Sharma- 20A2HP411

Surabhi Sinha - 20A2HP413
Mayanka Bagri- 20A2HP416
with Big data at Shubham Hajare- 20A2HP447

Gap
INTRODUCTION
● ART PECK, CEO & HBS MBA ‘ 79, was struggling to turn around Gap Inc. In the following 2
years of declining sales in an environment where many brick-and-mortar retailers were
under pressure.
●
● Gap’s troubles were not new to Peck; the company had been struggling to regain its
footing since 2000.
●
● The way he hoped to improve operations was to eliminate the position of creative director
for each of the firm’s fashion brands and to replace them with a more collective creative
ecosystem fueled by the input of big data.
●
● Peck pushed the company to use the mining of big data obtained from Google Analytics,
Google Trends, social media and the company’s own sales and customer database.
●
● Peck was upsetting the delicate balance between creativity and commercialization,
between designers and merchants.
●
● Peck expand the business by online distributing Gap’s brand on Amazon.
Company Overview
● Gap Inc. was founded in 1990 by Donald and Doris Fisher. It was the largest
example of genre, with 135,000 employees and 3659 company-owned and
franchised retail locations in 50 countries.

● Gap Inc. managed 5 brands: Gap, Banana, Republic, Old Navy, Athleta and
Intermix.

● In 1983, Millard “Mickey” Drexler became CEO of Gap Inc. In his tenure sales
grew from $480 million to $14 billion and later in 2000 it grew up to $42 billion.

● In 2002, Drexler left Gap due to declining in sales for eight consecutive
quarters because he attempted to inject more fashion into Gap to attract
younger shoppers who were migrating to edgier competitors.

● Gap produced hundreds of unique products, each offered in a variety of colors

and sizes. Gap offer two types of product that is basics with styles that
endured across seasons and more fashion-forward items that captured the
spirit of a particular season.
Digital and Big Data at Gap Inc.
● Art Peck heavily invest in digital capabilities to address consumers’ shift
to omnichannel shopping.
●
● Peck digitized the company’s entire product inventory and introduced
retail services, which made it easy for customers to browse, purchase
and receive their items seamlessly across channels.
●
● Peck promoted data-driven decision making and pushed his team to
utilize big data to learn more about customers’ behaviours and thereby
deliver a better customer experience.
●
● Gap was working with Google and Avametric to develop an augmented
reality app that allowed shoppers to test out different looks in order to
improve their online and mobile shopping experiences.
●
● Gap developed email programs to provide relevant, personalised
messages to consumers.
 Challenges faced by Peck As a CEO
1. Stiff Competition
A. H&M and Zara were the competitors
2. Slow growth in core markets
A. 3 trillion $ dollar apparel industry
B. Change in consumers buying habits
3. Rise of Fast Fashion
A. New styles at low price appearing in stores in a weekly basis
4. Frequent & Heavy discount of 40%
ITM Case Study on Big Data

5. GAP’s size and ubiquity were transferring from asset to a liability

6. Rise of E-commerce
A. Shift from brick and mortar stores to offline channels
 PECK’S PRODUCT STRATEGY
● In 2011: Fired GAP’s head of design, Patrick Robinson.
● In 2012: Robinson’s replacement, Rebekka Bay, was hired and 3 years later he
dismissed Bay.
● In 2014: Creative Director Marissa Webb, was hired to leverage her sensibility
and credibility with younger consumers Webb stepped down in October 2015.
● Neither Bay nor Webb was replaced.
● Instead pecks solution was to eliminate the position of creative director.
ITM Case Study on Big Data

● Some retail analyst were skeptical while others were optimistic.

Big Data in Predictive Analysis
in Marketing
Using data Mining and Machine Learning

Using predictive Using predictive

Analysis to sell Analysis for new
Existing product
products development
 Predicting
Consumer
Preferences
Traditional ways were
inadequate so we need to
ITM Case Study on Big Data

change and find new ways

● Preferences are constructed and not
revealed and therefore unpredictable.
● Choices are influenced by various factors.
● Changing fashion and trends.
 Product 3.0 at Gap
“A clear brand vision with a common operating model”

The brand vision governs every design, merchandising, inventory and

production so that Gap Inc. can identify trends, make them relevant to its
customers, test them in stores and respond to demands. Buying more of
those that sell and quickly and moving away from those that don’t with a
ITM Case Study on Big Data

goal of fewer fashion misses and markdowns.

ITM Case Study on Big Data
 ● In intimation of fast fashion competitors, they wanted to increase its
competence at combining spotting trends with reading real-time
performance and acting faster on that.
● In place of a creative director, each brand’s vision statement served as a
filter so that trends could be incorporated consistent with the brand’s
image.
● Product 3.0 relies heavily on the analysis of customer purchase data.
ITM Case Study on Big Data

● To implement Product 3.0 , they shifted some manufacturing from asia to

the caribbean to receive items faster, by implementing fabric platforming,
buying large quantity and holding it in inventory so that design could be
quickly created in response to of the moment trends.
 ● Reinvigorate Gap focused on fixing the product.
● Tightened inventory to reduce the need for deep discounting
ITM Case Study on Big Data
 Making Changes in the Distribution Model
ITM Case Study on Big Data

Amazon has an undisputed presence in GAP’s partnership with Zolando and Taobao has been
E-commerce Retailing and Gap has took successful, and provide it with lots of marketing insights
notice of it. GAP has been considering it to using their AI systems.
partner with it to expand its reach

THINGS TO BE VARY OFF- Partnering with E-Commerce platform irk the offline
retailers. THe retailers fail to understand that online mode helps in gaining lots
of market intelligence.
 The Way Forward
For success in Clothing Industry following
things are important:

● Right Product Assortment

● Gauging Consumer interest and
preferences
● Reducing lead times in providing new
variety to customers
ITM Case Study on Big Data

For getting the above things right, AI and Big

Data collected by E-Commerce sites provide
with useful insights that offline retailers lack.

Online Retailing provides useful market

insights, which will help to survive in the
market.