Arthur Peck, CEO of The Gap, said that his company will have to battle for a younger customer and get the best yield out of a promotional retail environment.
The Gap held an analyst day for Wall Street. The company’s CEO summed up the corporate strategy based on the application of advanced analytics and machine learning models.
Digitalising their store assortment process, improve their approach to personalisation, and apply data strategies to inventory optimisation and marketing effectiveness.
Regarding their bid for a modernised approach to brick & mortar stores, Peck recalled for analysts that the multi-brand retail group is “in the process of rolling out a proprietary assortment and buy planning tool, which runs all the way down to store level allocation. That has the API for machine learning and machine decisions as it relates to store allocation. So right product, right place at the right time.”
He explained that their main goal is to identify any potential synergy across stores, so if there is excess of inventory in a given store, another one can take advantage of it.
“Right there, there is a yield opportunity. And that is material. That is just the right allocation, the right replenishment and then also making sure it is the right size, curves,” Peck continued.
The Gap’s CEO advanced their plans to leverage cookies and other credentials to offer their customers enjoy personalised web experiences: “you are going to experience a personalised site opportunity where we are presenting your landing page differently, we are presenting our product recommendations differently through our (inaudible) product engine, a number of different things we’re doing there.”
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The end game is clear to Peck: “When you personalise the web experience, every needle moves in the right direction. Our revenue per visit goes up. Our conversion goes up, etcetera.”
(Source: Fashion United)