PREDICTING

CONSUMER TASTES
WITH BIG DATA AT GAP
OUR
TEAM

Van Anh
Thu Thao
Truong Phuc
Canh Phuong
Phuong Trang
Adelyn Keller
Nhat Duyen You can replace the
image on the screen
with your own

You can replace the

image on the screen
with your own
 01
OBJECTIVE
OBJECTIVE
First

Increase growth rate

in the core market
OBJECTIVE
Second

Create competitive
advantages to compete
with other fashion brands
OBJECTIVE
Third

Take advantage
of e-commerce
 KEY
ISSUES 02
 PRICING
This is a longstanding problem that
cannot be solved easily and require a
FAIL TO substantial overhaul of the supply
MEET DEMAND chain, and would take years to fix.
As Covid-19 outbreaks, its
brands were unable to
meet the strong demand
of customers.
RISE OF
FAST FASHION
HEAVY Fast fashion retailers are able to
move styles from the runway to
DISCOUNTING the stores within weeks.
Shoppers now are craving
low - prices and
discounting clothes.
03 EVALUATE
OPTIONS
CRITERION
In 1994, Gap created new brand, Old Navy

Offering “wardrobe must-haves”

at “prices you can’t believe”

The first retailer to reach $1

billion in annual sales within
four years of its launch
 “Our customers are omni today and that is a fundamental
CRITERION reality. Many of our customers begin their journey with
our brands on their phone and they finish it in our stores.
Many of our customers begin their journey with our
brands in our stores and they finish it on their phone.”

He 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.
OPTIONS
Using predictive analytics to sell
existing products

Using predictive analytics

for new products

Like most retailers, Gap

used data analytics to
inform its rebuys

In a strategy Peck dubbed Product 3.0, Peck promised to

combine “a clear brand vision with a common operating model”.
EVALUATE Gap initially failed to keep up with the observed
changing customers’ behaviors in the clothing market.
OPTIONS
Gap failed to put in place an appropriate product
assortment mechanism in line with customers’
changing needs and expectations in the fashion sector

Gap’s lack of recent innovations that can suit the needs

of clients seeking basic and fashion-forward clothing
products

The lack of commitment among customers has

contributed to this company’s failure to understand
their fashion preferences.

Gap’s management needs to appreciate that

customers’ fashion requirements are socially
constructed by their collective behaviors and similarity
of tastes and preferences
 04
RECOMMENDATION
SUGGESTED ALTERNATIVES
PROS:
Alternative-1: • Signals to be responsive in the market versus the rivals'
Introduction Of Specific activities.
Gender Disposable • Enables the company to cover more group segments
Predicting Consumer and preserve its competitive edge.
Tastes With Big Data
• The launch of gender particular Predicting Consumer
Tastes With Big Data At Gap would preserve the
At Gap Case Analysis At competitive position of K-C in the US Predicting
National Level Consumer Tastes With Big Data At Gap market.
• It would prevent the threat of capturing more market
share by P&G through its His and Her disposable
Predicting Consumer Tastes With Big Data At Gap.
CONS:
• The additional fixed cost would be required in order to market the product and produce.
• The item is brand-new to the market and customers, and the action of the customers
towards the item is unidentified, which untimely increases the unpredictability about
the product.
• The product is brand-new to the market, so it also tends to have high opportunities of
failure.
SUGGESTED ALTERNATIVES
PROS:
• The intro of a comparable item would help the business to Alternative-2:
keep its competitive position in the industry.
• Modification in the comparable product would attract Introduce Similar
brand-new consumers, which would help the business to Product With Few
gain more market share as well as to improve its Modification
profitability.
• It would show to be a brand-new item, and Particular
Predicting Consumer Tastes With Big Data At Gap would
be the extension of the functions in the existing item.
• Modification may supply first mover benefit to the
company.

CONS:
• The unknown response by the clients towards the modification.
• Intensive capital is required for the introduction of brand-new products.
• Opportunities of failure of the new item.
SUGGESTED ALTERNATIVES
Alternative-3:
Focus On Geographical
Expansion
PROS:
• Enhance brand name recognition and success of the
business through its worldwide presence.
• Attract brand-new consumers by taking part in the
brand-new markets.
• The business has an opportunity to achieve economies
of scale through international sales.
• Improve the profitability and competitive position of
the company.

CONS:
• Many cultures and environmental barriers amongst different countries.
• Huge capital expense is required for the geographical growth.
• K-C might fail to get possible sales from global markets with intense competition and
hard competitors with high innovations.
 SUGGESTED ALTERNATIVES
PROS: Alternative-4:
• Marketing draws in new clients, which improves the Invest In
customer base of the business. Technology And
• Advanced technology helps the company to embrace an Advertising
advanced process through which the company would have
the ability to cut its different overhead expenses and
import production capability.
• It would offer a higher sales development to K-C than CONS:
particular non reusable items, as the market section has
• Substantial capital
more possible to grow as compared to the saturated
investment is needed in
market sector of non reusable Predicting Consumer Tastes
upgrading the technology
With Big Data At Gap.
and advertising activities.
• Enhances the reputation of the business, since the brand-
• Methods of the business
new technology would be environment-friendly.
would be easy to imitate.
• The clients would be able to gain an insight of the features
• The qualified labor force
being presented in the company's item.
would be required to deal
with the brand-new item
of the business.
 The threat of New Entrants PORTER’S FIVE FORCES MODEL
• Low
• Numerous players Bargaining power of supplier
• Saturated market • Moderate to high
• High rivalry among the • Few suppliers and the quality
of material Competitive Rivalry
competitors
• Strong brand identity • The manufacturer is wholly • High
depended upon the supplier • Dominating players
for raw material which is • Products are really
plastic identical
Bargaining power of • Zero switching cost
• No substitute
the buyer of the buyer
• Zero switching cost
• Moderate to high • High
• Numerous dominating advertisement and
players Threat of Substitute promotional
• Identical products • High activities
• Zero switching cost • Low differentiation
• Many substitutes among the products
• Strong brand image, high • Readily availability of the
quality, skin friendly, substitute
environmentally friendly • Zero switching cost of
the buyer
MARKET
RESEARCH
• Good brand Name.
• Innovation.
• Production of own raw materials.
• Experienced in the personal care
category.
• Good distribution channel.
S W
• strong history of innovation.
• Changing demographics &
priorities of western women-
O T
women started going to work.
• Increased demand.
• New technologies.
• New product in the existing market.
• Existing product in new marketing.
• No presence in the Japanese
Market.
• Second to P&G in market entry.
• Low international presence.
• Using old methods of
manufacturing.
• Multiple competitors.
• Declining birth rate.
• The technology was
accessible to everyone.
• Government regulations.
• Imitation of strategies.
FINANCIAL COST
ANALYSIS
Cost of Goods Sold and Occupancy Expenses

Cost of goods sold and occupancy expenses decreased 5.7 percentage

points as a percentage of net sales in fiscal 2021 compared with fiscal 2020

In 2022, it’s estimated that the expenses decreased

4 - 5% points compared to 2021
FINANCIAL COST
ANALYSIS
Operating Expenses and Operating Margin

Operating expenses increased $260 million, but decreased 5.3 percentage

points as a percentage of net sales in fiscal 2021 compared with fiscal 2020
primarily due to an increase in net sales

In 2022, operating expenses increased by $300 million,

but decreased 4 percentage points compared to 2021
FINANCIAL REVENUE PREDICTION
ANALYSIS
Gap Inc’s Revenue by Brand (2016-2022)

In 2022, revenue is predicted to reach 17 billion dollars

 05
IMPLEMENTATION
TIMELINE
FIRST AND FOREMOST VISION: FIXING THE PRODUCT
The first two year of being CEO

01 02 03 04
Fire Gap’s head Blame the poor retail Spread the Implemented fabric
of design, execution of the responsibility to a platforming, buying
creative director company merchants collaborative team large quantities of fabric

05 06 07 08
Cut television Invest in digital Tighten inventory Consider cooperate
marketing and platform with Amazon
store-window
merchandising
RESOURCES
ESTIMATION

Eliminate the position of creative director and spread

the responsibility for design of the brand’s seasonal lines
to a collaborative team informed by hard data.
CONTINGENCIES

Implementing fabric
platforming, buying large
quantities of fabric and
holding it in inventory so
that designs could be
quickly created in response
to of-the-moment trends.
CONTINGENCIES

Shortening the time it took for

items to go from design to
stores and postponed making
the final decision on orders until
he could incorporate the most
recent data trends from limited-
quantity early releases designed
to test the waters. Cutting the
development cycle down to 8-10
weeks in some categories.
RISK
MITIGATION RISK RELATED TO
SUPPLY CHAIN
Develop comprehensive understanding of current supply chain risks.
Build clear strategies to mitigate risks and align with business stakeholders on any
business implications.
Project manage operationalization of risk mitigation plans inclusive of COO shifts.

RISK RELATED TO BRAND

RELEVANCE AND BRAND EXECUTION

We must successfully gauge apparel trends and changing

consumer preferences to succeed.
We must maintain our reputation and brand image.

RISKS RELATED TO STRATEGIC

TRANSACTIONS AND INVESTMENTS

Further develop an omni-channel shopping

experience through the integration of our
store and digital shopping channels.
06
CONCLUSION
 Big data approach would not have
an equal positive impact on Gap

The failure of Gap to adapt to the changing patterns in the clothing market
has undermined its competitiveness, as denoted by the dropping value of
sales in the recent past.

Creative directors in the company have failed to take into account the
dynamic aspects of the contemporary market, thereby failing to develop
brands that suit consumers’ evolving fashion tastes.
Instead of replacing the creative directors with big data drive creative
process; Peck can bring young creative designers on board, considering the
customer segments, with an inclusion of a proposed big data as a technique
to gain further information and valuable knowledge regarding the consumers
’preferences and taste, and emerging industry trends or survey conduction,
with the use of the internet in order to have a closer look on what exactly the
consumer wan-tout of the brand.

Relying completely over the big data would bring inaccurate and incorrect
predictions due to the fact that the consumers keep changing their tastes and
preferences, so that the big data would not be as much accurate and reliable.
 Based on the issues noted from the given
case, Peck’s decision to deploy big data
analytics in place of creative directors is
conceivable since it enhances product
innovation in line with customers’
transforming shopping habits and
preferences.

Overall, Gap may need to utilize

technology to realize various market
intelligence goals of remaining
competitive in an industry characterized
by intensified rivalry.

The company should modify its products

in order to get the attention of the
customer towards its product, and to
inhabit a significant market position.
THANKS FOR
WATCHING