Gap Inc. recently announced partnerships with two strong brands: Birchbox, the subscription beauty brand which has just started to delve into bricks-and-mortar; and Virgin Hotels, Richard Branson’s lifestyle hotel brand. There are certainly benefits to partnering with powerful brands to maximize your audience reach, but we can’t help but wonder: what is the win in these retail partnerships for Gap?
Gap & Birchbox Partnership
Birchbox has set up pop-up shops in flagship Gap stores in New York City, Chicago, Houston, Los Angeles and San Francisco. Customers can build their own Birchbox by selecting a trial-size product from each of five categories on display and have access to exclusive subscription starter boxes. For a company like Birchbox which is still in growth mode, this is a terrific way to leverage retail foot traffic with little capital investment. But what does Gap get out of it? All the press surrounding this announcement was from Birchbox’s viewpoint; Gap Inc. did not issue any release.
Gap might argue that they would see incremental traffic from Birchbox fans who otherwise have no access to a hands-on Birchbox experience. If Gap is hoping to benefit from sales from these customers, it should have brand relevance with these customers already. It’s no secret that Gap’s woes have been driven by its inability to keep up with trends in apparel and what consumers want. Their mainstay positioning has revolved around “basics”, not trends. Birchbox, meanwhile, is all about what’s hot and on-trend. We would suggest that the Birchbox customer is not the Gap customer.
Performing a forward-looking analysis of the economic, technological, and social external drivers and most importantly, gaining a deep understanding of how consumers would shop apparel five to ten years down the road, would have brought Gap to a different place than where they are now. Through its products and services, Gap would have been able to keep up with the desire for trends and fast turnaround to “the next thing”, which would appeal with the changing consumer. If this was the case, then the partnership with Birchbox would have made more sense and enhanced the overall customer experience.
Gap & Virgin Hotels Partnership
Now let’s examine the partnership with Virgin Hotels, where hotel guests can have Gap styles delivered right to their room. By using Gap’s Reserve In Store program at gap.com via Virgin Hotel’s “Lucy” app, Virgin guests can reserve items at nearby stores, but instead of having to then go to the stores to pick-up, the items are delivered straight to the guest’s room. The execution is neat, but what was the underlying rationale?
Again, we would suggest that Virgin Hotel’s customer is not the Gap customer and therefore, there is no relevance for them to purchase from Gap at all, never mind the fact that with Gap having over 1,500 stores worldwide, why would any traveller choose to shop at Gap while away?
Richard Branson built a brand that is centred on customer service. Doug Carillo, Vice-President of Sales & Marketing for Virgin Hotels, says that the partnership with Gap is one more way for Virgin to “surprise and delight” their customer. But delight only comes when you give customers something they will use. Every element of Virgin Hotels’ marketing – from imagery, to brand voice, to hotel design, to pricing – is so clearly targeted at a well-heeled audience of 30-45, who are not shopping for their clothing at Gap.
Does the Partnership Resonate with Your Brand and Customers?
Gap is clearly exploring alternative revenue streams with these partnerships. We give them points for creativity, but partnership strategies need to be grounded in rationale and a deep understanding of where your brand is positioned and who your product will resonate with.
Today, Gap is trying new innovations and searching to again find its niche in the world of apparel. However, without this foundation having been set, and without having clearly defined where your product is going, it’s risky to enter into retail partnerships where there is no quantifiable win and no grounded connection with the partners’ brands and target audiences.