By Katherine McIntyre, Ezra Perlman, Garth Saloner, A. Michael Spence
2000 | Case No. EC9A | Length 10 pgs.
One of the first bricks and mortar retailers to venture online, Gap Inc., headquartered in San Francisco, was widely considered an e-commerce pioneer in an industry renowned for its resistance to change. Long before other apparel companies were even considering a foray into cyberspace, Gap began developing its online strategy, re-examining its infrastructure, and shoring up key areas that would be needed to support its e-venture. While Gap recognized the opportunity the Web offered to leverage customers’ familiarity and loyalty to Gap brand, the value of the brand was Gap’s biggest concern as the online strategy was developed. Gap’s first web site was launched in December 1996. Industry observers wondered whether Gap’s online strategy would be a source of sustainable competitive advantage. In some ways, Gap seemed particularly well-positioned to pursue a “clicks and mortar” strategy. For example, while high product returns were a big concern for many apparel retailers as they considered their online strategies, Gap claimed that returns on the company’s online sales were approximately the same as for store purchases. Even more importantly, perhaps, Gap owned its retail outlets and believed that the company was in a better position to manage conflict between the online and offline channels. Would this give Gap an advantage over manufacturers who did not have captive downstream channels?
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