Gap Inc PESTEL Analysis

Political
• Gap are included in the list of multinational corporations to speak out against
Trump's pro-business climate plan, with a Gap representative stating that "we believe
that investing in a low-carbon economy will not only help foster a healthier
environment, it is also a key to unlocking new business growth potential for the US
and around the world" (The Guardian, 2017). This may result in political pressure from
the Trump administration on Gap Inc., given that reports indicate the president is
taking an increasingly authoritarian approach towards critics (Robin, 2017).
• With the U.S. president placing more pressure on American firms to produce in
America, as opposed to outsourcing from cheaper developing companies, the
majority of Gap's production is done in South-East Asia, meaning that the firm may
face increasing pressure to move some of its production facilities to the U.S.

Economic
• In the first fiscal quarter of 2017, the retail environment of the U.S. remained tepid,
with this occurring particularly in the apparel sector (Olson, 2017). Nonetheless, Gap's
performance in the first-fiscal quarter indicated that the firm's execution resisted the
downward trend (Olson, 2017).

Socio-Cultural
• Gap have come under fire in the past year for an advertising campaign branded sexist
by critics. Accordingly, the campaign featured an image of a boy labelled 'the little
scholar', while a girl was feature next to the boy labelled 'the social butterfly',
indicating that while the ad says for the boy that 'your future starts here', for the girl
the ad says, 'the talk of the playground' (Hemmingham, 2017). In a society
increasingly striving for equal rights between males and females, the ad spared
controversy amongst consumers (Hemmingham, 2017).
• Gap Inc. strongly supports the Pride movement, and maintains a strong support for
the LGBT community, donating 30 per cent of profits from the Gap brands Pride T-
shirts to the UN Foundation to benefit Free & Equal (Gap Inc., 2017a).

Technological
• With augmented reality being frequently cited as the future of online fashion
applications, Gap have invested in the use of such technology in their clothing
application. The Gap app allows consumers to preview clothing in real time, which is
a function that is so far not utilised by competitors. However, at present, this level of
augmented reality is limited in its application, with the virtual dressing room app
being limited in the items it allows consumers to preview on their body (Ion, 2017).
 • Gap are further advancing their technological innovation by developing and
implementing mobile checkouts in their stores, which allow customers to purchase
items using their mobile phone instore (Gap, 2017b).

Environmental
• Questions have been increasingly raised about the safety and ethicality of Gap
factories in Bangladesh, where protests occurred earlier in 2017. One of the top
clothing suppliers for Gap was affected by protests over low wages, with Gap
releasing a statement to say that they were troubled by the recent events and urging
officials to ensure that no member of the protest was targeted "solely because of any
association with a trade union or other group" (Abrams and Sattar, 2017). The
question remains as to why a large organisation as Gap, which is listed on the stock
exchange, is faced by protests over low wages in its factories, when the size of the
company indicates its ability to pay fair wages.

Legal
• Gap comply with a number of international standards regarding the legal and ethical
obligations of a firm to its stakeholders. These include providing equal pay, where the
organisation was the first Fortune 500 company to pay women and men equally,
compliance to the California Transparency in Supply Chains Act and the UK Modern
Slavery Act (Gap, 2017b).