Predicting Consumer Tastes with Big Data at Gap Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Predicting Consumer Tastes with Big Data at Gap Case Solution

What do you predict will happen to Gap Inc.‘s sales going forward as a result of this decision? How will it affect each of its brands’ equity?

Peck fired the creative directors and pushed for decentralized process of design, where external vendors and different team would create designs for Gap as well as the brands it owns. He was also encouraging the executives to put major emphasis on big data to identify the market trends over the period of time, which in turn would inform-effective practices, illuminate possible solution and innovations and would help the firm in being aware of the issues. Moreover, Peck stressed over the significance of big data and the requirement of embracing the data analytics tools as they help in speeding up the collection of data and its processing.

The decision of eliminating creative directors and depending completely on big data can adversely affect the sales and reputation of the company in the market, because it seems illogical to completely ignore the responsibilities of the creative directors as the artistic visionaries, being the trendsetter and creating the stylish product designs to delight the customers. Even though, the data driven approach has provided numerous benefits to the biggest competitors of Gap Inc. such as: Zara, Uniqlo and H&M, but the creative designers have the top-notch experience in product design, which is of huge importance. The decision of replacing the creative directors would upset the delicate between commercialization and creativity, between merchants and designers that still exists at most fashion brands,which also used to support the fashion cycles of Gap for decades.

Additionally, the creative designers are the taste makers who are trained in product design and they use their attitude and unique eye and personality to share the tomorrow’s fashion. They bring magic to the customer experience as well as to the brand. Without the presence of creative directors; the company’s brand assets would be exposed to higher-risk. Without having a creative visionary leader within the organization;the company would fail in establishing the consistency and reinforcing the purpose of brand. Combining the drawbacks of eliminating the position of the creative directors;the brand equity of the company would be at risk of losing the market share.

Does the big data approach work for all three of Gap Inc.’s primary brands? Why or why not?

It is believed that the big data approach works for all three of Gap Inc.’s primary brands, because of the fact that the banana republic is the most targeted brand of the company, with its costly price points so the designers of the product have in-depth knowledge and understanding of what the customers are looking for. The target customer of the company’s brand is upscale, particularly female segment who are interested in the classic and trendy designs of the products. The variability in the product’s design is least among Gap’s brand, but it is important because its ability of evaluating the success of the brand in real time is of paramount significance.

Similar to the model which was used by Netflix, with online shopping the company doesn’t need to depend on taking feedback from few consumers that prefer to comment on as well as rate the products that they bought. With the introduction of the new product named “Product 3.0”, the trends seen at the Gap and banana republic, were able to cascade down into less costly family brand of Old Navy. This in turn allowed the consumers with all income baskets to be served. All the brands including Old Navy, banana republic and Gap have a clear vision with the common ground, being more demand driven and predictive based on the data analytics. Such information sharing benefits all of the company’s brand through a better streamlining of the products towards the evolving trends in the market. Since two of the company’s brands, including: Gap and Old Navy have greater number of SKU’s, these brands would be having greater benefits from the big data. The big data work for all three brands of the company by analyzing how well a product performs before waiting to receive feedback from the customers. The biggest impact of big data in creating more innovative solutions can be seen in the development of the predictive models. These models can be used to help in forecasting the market and providing the companies with an insight into what the future may hold. Because of their ability to forecast the market; predictive models are perceived as useful tools to help the company in planning its its next step in advance.

Should Peck allow Gap Inc.’s brands to be sold on Amazon? Why or why not? If Gap sells through Amazon, should the company be a wholesaler or third party seller? Why?

The CEO of company allow Gap Inc.’s brands to be sold on Amazon, as it has been experiencing problems in generating profits due to the decline in sales for last two years. Depending on the third-part seller, would increase the ability of the company to expand its customer reach. Also, Amazon has a long-standing market image and the presence of Amazon is undeniable in the market, and many of the company’s customers buy online from Amazon frequently. In order to improve its sales level, the company needs to work-harder to continuously refresh and rebuild its own brand equity.

In addition to this, the company is recommended to be the third-party seller, as it would be the independent entity and would have an existing customer base. The company can expand its customer base as millions of shoppers shop and visit on these sites on regular basis. Being a third-party seller would boost its revenue, as it provides multiple payment methods along with gift vouchers and coupons. Thus, the decision of being the third-part retailer would reap many benefits to the company, such as: a wider customer base, an improved brand image, strong brand equity, competitive advantage and a larger share of the market.

What is your assessment of Product 3.0? How would you improve it?

The main theme of the Product 3.0 strategy is to use big data and to analyze the purchase data of customer in order to drive development in the new product. Under the Product 3.0 strategy; the company aims to use real-time sales data to focus on the items that are popular among the customers and should be reordered. Referring to the exhibit 13 of the case; the New Big-Data Based Model helps in maintaining the brand’s identity and vision due to which there must be some inputs from creative directors or creative teams. The introduction of the Product 3.0, would help Gap Inc. in moving forward. It would also help the company in having an efficient product introduction in the market and flexibility in its inventory. Thus, the Product 3.0 has a positive impact on the company’s performance as a whole.

The Product 3.0 can be imported by the digitization of Gap’s supply chain, which can be done through tracking goods at the item level and capturing the inventory’s visibility. The company is recommended to double down on its Product 3.0 efforts by taking advantage of operating scale in order to drive responsiveness to the demand of customers, speed to market and efficiency.(Hopper, 2017). Under the Product 3.0 strategy; the company should predict the customer behavior, match customers to the products, inform managerial decision making and identify the loyal-customers. The company should tailor the marketing activities to meet the desires and needs of the customers, using electronic media tool. The personalization would lead the company towards having increased sales, greater customer satisfaction and higher customer retention. The company should allow artificial intelligence and technology to help with up skilling and training the employees, to critically analyzing the data so that the creative directors would be able to understand the customers’ behavior.....................

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Predicting Consumer Tastes with Big Data at Gap Harvard Case Solution & Analysis