The Gap company’s stores have hardly been the hottest spots at the mall in recent months — or even years.
In a market where most retailers are posting single-digit monthly losses, its brands — Gap, Old Navy and Banana Republic — had a combined double-digit drop in September, and Old Navy’s sales that month were down a startlingly bad 24 percent.
But view Gap Inc. through the prism of the Internet, and a different picture emerges. Its online sales are soaring. They were up 50 percent from 2005 to 2007, more than doubled in the last five years, and are expected to hit $1 billion this year, accounting for about 6 percent of total sales.
How can putting the same merchandise in a different environment produce such different results? The answer lies in the increasing appeal of the Internet and the steps Gap has taken to capitalize on it. There’s more of a democracy in decision-making when a shopping search site or Google is doing your browsing. When people rely on retail preconceptions and feet to find what they want, they might never stop at Gap or Kohl’s. But online, it’s all there for the perusing.
That’s a big reason, along with gas prices and the Internet’s attraction to bargain hunters, that Web sites may offer retailers their only cheer this holiday season. And it’s why retailers are paying unprecedented attention to the Web.
“It’s the only place you can go for an optimistic outlook” for retail this year, says trends expert Nita Rollins of digital marketing agency Resource Interactive.
Forrester Research predicts online retail sales will grow 12 percent this holiday season, the slowest growth to date but more than five times the tepid 2.2 percent increase the National Retail Federation predicts overall in November and December.
“The brick-and-mortar retailers who haven’t made online a priority…