GAP Frequently Has No Bottom Line Discount To Boost Sales.

Perhaps, only when the Gap brand is on fire, will this extreme sales promotion stop.

Judging from the latest earnings forecasts, they still need a certain amount of uncertainty.

According to Gap's sales performance in February, total revenue fell 1% to $918 million, while same store sales decreased 4% compared with the same period last year, lower than analysts' expected sales growth of 1.4%.

In recent years, compared with ZARA, H&M, UNIQLO and other competitors in fast fashion, Gap brand is losing market share gradually.

With the sharp changes in personnel, the chairman and chief executive officer of Murphy, who had been in office for 7 years, left in February this year, leaving behind the dismal performance of Gap. Murphy has become increasingly inadequate in the retail business of apparel retailing.

Recently, the US media commented on the poor performance of Gap, which may be related to GAP's frequent discount sale without bottom line.

The discount rate of all products in brand stores is over forty percent off, or even more than thirty percent off.

Consumers will often receive brand email saying "the last day, 25% off promotions", or "the last few hours, full 100 minus 45"!

Of course, with the increasing intensity of discount, consumers are becoming more and more aware of where the brand bottom line is.

Gap and Banana's bottom line promotion is too frequent. Many consumers are unwilling to buy goods at the original price nowadays.

Emily Elliott, a fashion blogger in New York, said, "when you know a few days, the brand has at least thirty percent off or even half off discount, so you don't want to buy this product at full price.

There was no loss in a few days.

"

She is not the only consumer who stares at discounts.

Public relations Emily Hawkins occasionally pays full price for Baanana Republic clothing, but only because she knows that shops will rebate.

She said, "I know better than anyone how to make use of these retailers' price adjustment timing. Usually, shops will have a price adjustment every two weeks. When I look at a favorite item and it has no extra discount, I will buy it first, then stare at the promotion period, and when there is a half off discount, I can get the rebate of the price adjustment."

GAP frequently has no bottom line discount, has let consumers wait for promotion period to buy.

Gap and Banana Republic are not the only ones that use high sales promotion to attract customers. Gap Inc.'s brands such as Loft and Old Navy are adopting the same strategy, but their low price measures have become the focus of debate in the industry.

Last year, a consumer sued Banana Republic, saying that it used "false" promotional signs to "lure" consumers, while the actual selling price was totally out of line with advertising promotion prices.

"This phenomenon will always exist," said Owen Shapiro, President of Shapiro + Raj consulting and retail analyst Owen, referring to the brand's extreme promotion strategy. Jos.A.Bank is a good example.

They always attract customers with great discounts, such as "suit buy, buy two," and so on, almost forcing customers to go to the store during the discount period, and the sales volume will also rise in disproportionately.

The surge in sales is undoubtedly the biggest benefit of Gap and other companies from unbelievable promotions.

Shapiro continues to say, "in the case of continuous sales, only if the sales are big enough to make a profit.

Your profit percentage will drop, but total profits will remain unchanged or more. "

In other words, you may think that discount is the main driving force for customers to buy, but Gap actually hopes that customers will buy more discount T-shirts so that brand promotion can be valuable.

Psychologist Elizabeth Lombardo explains, "when discount becomes a norm, people will begin to expect it.

When people see promotional information, they will feel that they can get something for free, as if they would suffer if they did not buy it.

Promotion is like poison. Once addicted, it is difficult to quit.

Lombardo added that in particular, a large discount can cause consumers to buy more. Even if they buy something they don't need, anyone who owns a wardrobe and a label garment can prove it.

When customers and discounts are tightly tied together, the problem arises, and the promotion of brands is almost impossible to reduce.

JCPenny is a typical failure case. In 2012, the brand broke the daily low price mode to support dry cleaners.

Sales then plummeted and customers dispersed.

"This is a disastrous blow for the company," Shapiro said.

"When you take a discount Road, you can't go back."

Talmage Advisors consulting company founder and CEO Liz Dunn responded to this view. "Promotional signals can attract people to shops.

Once the price is raised again, sales will be difficult to achieve.

It's like poison. Once addicted, it's hard to quit. "

This does not mean that the store is not working hard.

Express and New York& Company are also known for frequent promotions, both of which have recently announced that they are re evaluating their promotional strategies.

It is reported that Gap Inc. is also trying to make similar changes.

In a recent interview, Gap CEO Art Peck, who took office in February, avoided the question of frequent discount by Fast Company reporters.

In the first quarter of Gap Inc.'s earnings conference call conference, executive director and chief financial officer Sabrina Simmons briefly described promotional messages. He said: "we will control the pace of brand promotion and strive to achieve the 2015 profit target."

"These companies are likely to join hands in price adjustment," Dunn said.

"Gap is undoubtedly making such a change, but because of the change of management system, it is undergoing tremendous changes in the company.

They are trying to improve the product, and once they do it, it will be easier to adjust the rational price. "

The company's internal changes include the departure of Gap's original creative director, Rebekka Bay, the appointment of the brand new design director, and Banana Republic's appointment of Marissa Webb as the new creative director.

And the global president of Banana is a newly appointed candidate. In addition, the company will stop operating its small brand Piperlime at the end of this month.

"All retailers will experience such a process," Shapiro said.

They reach the summit, then go through a steady period or go down.

This is the eternal pattern.

Gap has been very successful, and then they began to practice the rules and use the style of college too much, but one thing remained the same: they defined leisure.

They help Americans learn to dress more leisurely.

Even if Gap's brand name is not performing well, the total sales volume of the company is indeed increasing.

In the quarterly earnings call conference in February, Peck has made it clear that after he took office, the primary task is to re infuse the company, especially to ensure the performance of the women's clothing brand.

He pointed out that Gap means "leisure, optimism and American style".

Gap Inc. has not overestimated the frequent promotion strategy, but suggests that the brand will enter a new chapter under the guidance of Peck.

"Our goal is to let

They can buy their favorite necessities in the shops, whether they are selling well this season or a pair of jeans that fit well, "said brand spokesman LizNunan.

"Next step for the company

We are just beginning. We are looking forward to seeing the results. "

According to the company's next plan, it seems that the sales will not be totally abandoned. The company understands that the high volume of sales promotion is the risk.

"In the recession, brands will definitely step up promotional efforts," said ShilpaRosenbeerry, senior director of Daymon Worldwide global consumer strategy.

"This is the only way for brands to stimulate consumption.

I think the discount during the recession will set the expectations of the consumer, and it will be hard for them to give up the discount later.

Nowadays, discount is a kind of expectation for consumers. It is no longer just a vague desire.

It even goes beyond the rational understanding of saving money, and it is more emotional pursuit, because people know that they can get a better price.

Finding the best price is almost a competition.

However, Gap Inc. will not insist on the promotion strategy without bottom line.

Gap, Banana Republic, Old Navy and Piperlime have been famous for their strong discounts, but Intermix and Athleta are not.

Dunn put forward a theory: "promotion level is often negatively correlated with brand popularity.

Athleta and Intermix are popular brands, so they do not need to promote customers through promotions.