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How Gap Inc. Excels at Niche Marketing (and How You Can, Too!)

How can you save money and increase idea flow while still growing your company? You can start by checking out what larger companies are doing in their marketing and business models, and then tweaking it to align with your company. After all, why make the costly mistakes when you can sit back and learn from their lessons instead?

One such brand to look to is Gap Incorporated. The clothing company that has Old Navy, Gap, Banana Republic, Piperlime.com, and Athleta under their umbrella is an excellent example of what to do and what not to do.

No need to make a wish, Gap Inc. has you a store just for you!

Gap Inc. has mastered their impressively accurate niche marketing concept. What is niche marketing? According to Brandchannel’s glossary, Niche Marketing is marketing adapted to the needs, wishes and expectations of small, precisely defined groups of individuals. It’s a form of market segmentation, but aimed at very small segments.

Sounds easy enough right? It’s marketing, so of course it’s not as simple as 1-2-3, but it can easily be copied for your own company.

How does Gap Inc. effectively use niche marketing? Just take a look at their various brands’ websites and you’ll immediately see how they adapt to the needs, wishes, and expectations of small, precisely defined groups of individuals.

Old Navy

Upon first look at their website’s homepage, you’ll instantly notice how fun and colorful it is. No, sir… There’s no monochromatic color scheme here! Next, you’ll notice that the current sale is featured smack-dab in the middle of the page. One week it could be dresses for the ladies, next week it could be discounted jeans for the entire family, and the third week it could be on-sale swimsuits and flip-flops.

Old Navy strives to showcase that they’re perfect for price-conscious consumers who still want to be fashionable. While not everyone may enjoy the clothing style they offer, everyone can certainly appreciate the affordability aspect that Old Navy is highlighting.

Gap

Shorts to the beach? Sure! Shorts to a presentation? Try again.

Check out this store’s site and you’ll get a very different look and feel right away. A bit more muted and understated, right? They also switch up what they show on their homepage. One week it could be a sale on polos, but the next week they could be advertising their latest jean cut (and yes, they are full price).

Gap is  here for the customers who shopped at Old Navy while they were in high school and college, but now they’re working full-time and need work-appropriate attire that won’t eat up an entire paycheck. Even though shorts, t-shirts, and flip-flops are extremely comfortable to wear, once you’re in an office environment this same style doesn’t fly. Gap tries to show they’re there for customers with their wide assortment of khakis and cardigans.

Banana Republic

Two words may come to mind when you see Banana Republic’s website: sleek and modern. The clean lines make the homepage appear organized and expensive, and nothing is out of place. You’ll notice their latest “collection” right away. It’s not just a new style of shirt or dress, but an entire collection consisting of shirts, pants, dresses, and more. Instead of consumers saying, “I bought this shirt last spring at Banana Republic,” they can say, “I bought this shirt from the Banana Republic’s spring 2011 collection.” Fancy, right?

Once Gap’s customers get that first big promotion at work and mature into their mid-thirties, Banana Republic (and Gap Inc.) is right there for them with the clothing for their next phase in life. Banana Republic offers consumers high quality fashion without having to head to 5th Avenue, Michigan Avenue, or Rodeo Drive.

Piperlime.com

Don't get between a girl and her shoes.

Even though all three of the aforementioned brands offer shoes and accessories at their stores, they don’t have the variety that consumers yearn for (or at least the variety that shoe-obsessed shoppers desperately need). Piperlime stocks over 250 footwear brands and also now offers women’s and men’s clothing from several designers.

Gap Inc.’s thought-process is most likely this: If people are buying clothing, then they’ll need shoes too. To get them, customers will want to shop with a company they already trust, i.e. Gap Inc! Besides, why should Zappos and Shoes.com get all the web traffic?

Athleta

I’m not sure exactly when exercising became so mainstream, but as someone who enjoys wearing yoga pants (even though I have no plans to actually exercise), I approve of the trend. Whether or not this trend took off in 2008, that’s when Gap Inc. acquired Athleta, which is a women’s active wear clothing and accessory company.

Just like Piperlime, Athleta offers customers a chance to purchase a new kind of item (in this case, workout gear) from a company they know and trust already. Granted, exercise clothing is not a necessity for a lot of customers out there, but there’s a profit in it nonetheless. You can’t blame Gap Inc. for wanting a piece of that profit.

While not everything Gap Inc. touches turns to gold (don’t forget the great logo debate from last year), they certainly are trying to get the largest piece of the clothing and accessory retail pie. Whether you’re a teenage boy looking for cheap, but fashionable t-shirts or a marketing executive in desperate need of classic and chic blouses for work, Gap Inc. has you covered in your specific phase of life!

Marketing segmentation can work for you, too, as long as you’re addressing legitimate customer needs. Just remember to strike a balance, otherwise you’ll end up spreading your efforts too thin. That’s a recipe for disaster that you’ll want to avoid at all costs.

Do you shop at any of these stores, or have you in the past? Did you know that Gap operated under all of these brand names? Do you agree that this is effective niche marketing? Sound off below!

Image credit to ttarasiuk and Clipart.com.


Amy Swanson

Amy is one of Quality Logo Products’ content developers and social media coordinators. She is a self-professed newspaper nerd and thoroughly enjoys reading business and financial news and having impromptu discussions about it. Oh yeah, she’s “one of those” people! A true Midwestern girl by nature, she loves riding her bike, photography, and the Chicago Cubs. You can connect with Amy on

Comments

  1. Jenna Markowski

    Considering I used to work at Old Navy, I got to know Gap Inc. pretty well. You hit the nail on the head with this post. Gap Inc. attempts to appeal to customers throughout every stage and in every aspect of their lives, and they succeed. It’s true that this segmentation allows them to appeal to wider audiences, but it also allows them to encourage business at all of their different stores.

    One of the cool things is that even though there are so many separate stores, their store credit cards are typically good at all of them. So someone could open up an Old Navy credit card and then get discounts not only at Old Navy, but also at Gap and Banana Republic. That’s a pretty good way to encourage foot traffic in your stores!

    Great post, Amy! :)

    • amy

      Thanks so much Jenna for your input! It’s so awesome to know someone who used to work on the “inside” ;)

      I never knew that you could use their credit card at each store. I always just assumed you could only use your Gap card at Gap, Old Navy at Old Navy, and so fourth. Yay, knowledge!

  2. Laura Porretto

    I worked for Gap, Inc too! I spent 4 years working at Gap and probably spent the majority of my paycheck at Gap, Old Navy, and Banana Republic :)

    I love the fact that if I want a nice staple piece I can go to Banana and if I want something in style on the cheap I can go to ON and of course I have to have my Gap jeans. I don’t use the store CC b/c I know how horrible it is for your credit score but I can see how that would come in handy if you are a frequent shopper at all the stores. Especially since they have coupons and a once a month discount day for their card members.

    We can’t forget to mention how Gap also caters to the Gap aged consumer with Baby Gap, Gap Kids, Gap Maternity, and Gap Body. There is a Gap for everyone!

    • amy

      I can’t believe I forgot about all of Gap’s brands (Baby Gap, Gap Kids, etc.), that should have been the first thing that came to mind! Excellent addition Laura, thanks!

      I love shopping at the Gap and Banana Republic Outlets, they always have cute basics that I know won’t shrink in the wash or have a seam come undone. Plus, they’re a lot more affordable ;)

      Thanks so much for stopping by and commenting, Laura! I really appreciate it!!

  3. Mandy Kilinskis

    I did know that Gap owned all of these other brands/stores. It’s a great idea because instead of trying to tailor one store to please everyone, you can focus on doing one thing really, really well.

    I haven’t been to any of these stores much lately, but I used to do the majority of my clothes shopping at Old Navy (totally fitting in to the high school/college price-conscious consumer). Piperlime is still a little too rich for my blood, but as a shoe lover, I definitely appreciate their selection.

    • amy

      I run hot and cold with Old Navy. I can go in one time and find tons of stuff on sale and exactly what I’m looking for, while other times I go in and find nothing. I still check in with them every once and while just in case it’s one of those times where I find tons of cute things, haha!

      Thanks for the comment, Mandy!

  4. Rachel

    I still shop at Old Navy and the Gap occasionally, though I haven’t been in a Banana Republic in ages and don’t think I’ve ever shopped at Piperlime or Athleta. It’s cool to see the different marketing strategies they take with each brand, though.

    What I really like is that the brands intertwine — for example, you can order (online) a few things from Old Navy and a few from Gap, but they are all under the same shipping umbrella, so you’re not paying twice for shipping. That’s how I remember it, anyway — it’s been a while since I’ve ordered anything online from them. :) It just seems like a very smart decision on Gap Inc.’s part, since it encourages customers to buy more than they would if they could only shop at one brand at a time.

    Interesting post, Amy! Thanks for breaking it down. :)

    • amy

      Thanks Rachel, I’m glad you liked it and found it interesting!!

      Just like you, I’ve never shopped at Piperlime or Athleta either. I’m not a huge fan of buying shoes online. I’m one of “those” people who have to try on one size, then up half a size, back to the original size, up a full size, back down half a size, and then finally will buy the original size I tried on.

      As far as I know, their shipping still works like that… I think. Anytime I can less in shipping you can consider me a loyal customer, haha! Thanks again!

  5. Jen

    This is a cool post Amy! I shop at Old Navy all the time, I like that I can get a few outfits for less than $100. I have an Old Navy credit card (because I get stellar coupons), but I’ve never used it at GAP or Banana Republic. It’s cool that I could though, if I needed too. GAP Inc. totally has the right idea in with their niche markets!

    • amy

      Awww, thanks Jen :) I love the coupons I get from Old Navy when I check out. More often times than not, I’ll get a “Save 10%” coupon on the bottom or my receipt for filling out a survey. I’d get them all the time at Gap Outlet which was both a blessing and a curse, haha!

  6. Kelsey

    I literally had no idea that these stores were linked. That’s really interesting. Unfortunately for me, I have an awkward body type that Old Navy doesn’t like to fit nicely… but all makes sense now! I’ve never had much luck with Gap either..and let’s be honest, the other stores prices are a little higher than I should let myself spend. :P Fortunately for THEM, not everyone is as stingy as I am, and it sounds like these stores work for a lot of people.

    Cool post, Amy! Sounds like GAP Inc. really knows what they’re doing by appealing to everyone!

    • amy

      It’s so weird how some stores and brands just don’t work for some body types! I’m that same way with a few stores too, whereas my sister can go in and find tons of stuff.

      Thanks so much for commenting, Kelsey! Glad I was able to offer up some new information for ya!!

  7. Eric

    Alright, first things first, you’re a fool if you live someplace warm enough for sandals, and don’t have at least one pair of Old Navy’s flip-flops. At 2 for $5, you can’t go wrong. I can’t say I buy anything else from any of their other stores, but those flip-flops are amazingly smart, and I’m sure they make bundles of money off them alone. In this economy, Old Navy’s price point is going to be right at the sweet spot for a lot of people, and it’s a brand that’ll do the company good.

    Nice post, Amy!

    • amy

      Thanks Eric!

      Old Navy’s flip flops comprise about 85% of my shoes because they’re so darn cheap and easy to throw on and walk out the door (yes, I am just that lazy some mornings). Old Navy actually has the highest revenue compared to all the brands, which I think you nailed why with your comment, “In this economy, Old Navy’s price point is going to be right at the sweet spot for a lot of people”. They always have a “deal of the week” that are items people would actually want to buy instead of “the shirts from three years that didn’t sell” like other retailers try to pull. Consumer’s aren’t dumb and Old Navy and Gap Inc. realize that.

      Thanks again for the awesome comment, Eric!

  8. Jeff Porretto

    I just friggin love Old Navy. Any place that has $6 graphic tees is A-OK in my book! I do feel like Gap has lost it’s way a bit however. When Laura worked there, I would pick stuff up all the time. There were a good amount of sales, and a nice variety of clothing to choose from. The last few years there seems to be fewer choices and fewer discounts… not a winning combination. Just my $0.02.

    Nice work Amy!

    • amy

      I totally agree with your statement about Gap offering fewer and fewer choices. I used to go there all the time (their sales rack was a thing of beauty and amazing discounts), but then the selection lost its focus. Maybe my taste changed too, I’m not sure. I just know that I haven’t been in a Gap in about 2 years probably.

      Thanks for the comment, Jeff :)

  9. Jill Tooley

    Niche marketing is tricky sometimes, but Gap pulls it off. I think it’s interesting that they’re targeting each store to a different demographic, but at various life phases. It gives the company a chance to “evolve” with its customers, in a way!

    Honestly, I don’t shop at ANY of these stores, and I never have. Old Navy is probably the most accessible, but none of their stuff ever fits me right. And as much as I’d love to buy everything in the Mad Men line on Banana Republic, my funds aren’t unlimited… ;)

    • amy

      You perfectly summed up what I was trying to say Jill, “It gives the company a chance to ‘evolve’ with its customers, in a way!”. TOTALLY!! That hits the nail on the head 100% :)

      I’m with you and wanting all the clothing from the Mad Men line at Banana Republic. It’s so chic looking, but those price tags deter me from every doing more than trying it on.

  10. Amanda

    Great post Amy! I love Old Navy, and probably 1/3 of my wardrobe is from there, LOL. However I don’t shop at GAP, or their other stores. But I do agree with what you’re saying in this post; it seems like they have all the bases covered!

    • amy

      Thanks so much for the comment, Amanda!

      They certainly seem to have their bases covered, no matter what age consumer is out there, there’s a store just perfect for them (and their budget).

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