Introduction
Gap Inc. and Ann Taylor have taken two different marketing approaches. Gap, the bigger of the two, does more advertising, has a larger product line, has more competitive prices, and more aggressive promotional tactics. On the other hand, Ann Taylor is pretty conservative on advertising and promotions, has higher prices, and a sleeker product line. However, Ann Taylor is more target market specific, and this pays off.
Product
Gap Inc. is one of the world’s biggest specialty retailers. They manage four of the most acknowledged apparel brands on the globe – Gap, Banana Republic, Old Navy, and Piperlime. (About Gap, 2008) At any given time, Gap’s teams are working on their merchandising varieties. This ranges from designing for the holiday season to making production samples of the upcoming summer collection. (How, 2008) Gap’s product lines have their own individual goals: GAP offers “Iconic American Style” which is fitting for customers of all ages, Banana Republic offers a brand considered “accessible luxury,” Old Navy offers “great fashion at great prices, for everyone,” and Piperlime is an online only store which is the “insider’s guide to the best shoe and handbag brands.
The Ann Taylor brand is represented by three divisions: Ann Taylor Stores, Ann Taylor LOFT, and Ann Taylor Factory. Ann Taylor contends in the “better” priced category, and provides to the thriving, relatively prosperous career woman, who needs proper, fashion cognizant attire for her professional life, and favors stylish, synchronized looks for her leisure activities. Ann Taylor Loft participates in the “upper moderate” priced category where the clothes are designed for value mindful women in a more tranquil way of life both at work and at home. Ann Taylor Factory Stores is what you would find at an outlet mall and where clothing merchandise is exclusively designed and made to bear the Ann Taylor Factory label. (About Us, 2007)
Price
Gap’s prices have been set in such a way to enable them to reach fiscal 2007 revenues of $15.8 billion. (About Gap, 2008) Gap is currently offering 20% off purchases for becoming a GapCard member and free shipping on orders of $100 or more when placed online. Old Navy is currently offering women’s tee shirts for two for $16 (regularly priced at $10.50 each) and men’s polo shirts for two for $20 (regularly priced at $14.50 each). (Old Navy, 2009)
Ann Taylor’s prices have been set in such a way to enable them to reach fiscal 2007 revenues of more than $2.3 billion. (About Us, 2007) Online, Ann Taylor is currently offering 25% off spring clothing items. In addition, if you use your Ann Taylor Card, you can get an additional 10% off. If you dig the website a little deeper, you can fins sales on blouses and shirts, pants, skirts, dresses, etc for up to 70% off. (Ann Taylor, 2009)
Placement
Gap operates more than 3,100 stores worldwide, which includes Gap, Banana Republic, Old Navy, and Piperlime. Gap has stores throughout the United States, Canada, the United Kingdom, France, Ireland, and Japan. Gap’s online offering can reach any corner of the globe where they do not have a store location. Gap’s headquarters are in San Francisco, with their product design offices located in New York City, San Francisco, and London. (Company Fact Sheet, 2008) Gap’s total square footage under management is 39.9 million, with an allocation of the following: 12.1 million for Gap North America, 4.9 million for Banana Republic North America, 20.2 million for Old Navy North America, and 2.7 million for international operations. (Historical Square Footage, 2008)
Ann Taylor operates 959 stores in 46 states, the District of Columbia, and Puerto Rico, with their headquarters being located in New York. Their portfolio is diversified in the following way: 345 Ann Taylor store locations, 519 Ann Taylor Loft store locations, and 85 Ann Taylor Factory store locations. Ann Taylor’s total square footage under management is 5.5 million square feet. The allocated square footage is approximately 1.8 million square feet for Ann Taylor, 3.1 million square feet for Ann Taylor LOFT, and 0.6 million square feet for Ann Taylor Factory. (Real Estate, 2008) Where ever or whenever it is impossible to find some of Ann Taylor’s square footage, their products are offered online as well.
Promotion
Gap is the only national retailer to spend more than 2% of its total advertising budget on its online marketing. This can be attributed to Gap being an early entrant to the online game, both as an advertiser and seller of a product. (Meskauskas, 2003) Gap promotes its products through gift cards, catalogs, and advertising programs on television and in magazines. In 2008, Gap had a total of approximately 18 million visitors to its website. (Gap Profile, 2008)
Ann Taylor promotes it products mainly through catalogs, television and magazine ads, and gift cards. In 2008, Ann Taylor had a total of approximately 8.5 million visitors to its website. (Ann Taylor Profile, 2008) Ann Taylor recently partnered with Proctor & Gamble due to the economic downturn, and they are currently handing out free samples of detergent and coupons to customers who buy machine washable clothes. In addition, Ann Taylor has created an eight-page magazine, available for free in stores, that provides tips on how to keep clothes looking fresh. Of course, due to the partnership, they require Tide or Downy Total Care, which are both Proctor & Gamble products. (Quenqua, 2008)
Conclusion
It appears to me that Ann Taylor is doing quite well in comparison with the much larger Gap, Inc. In fact, one can draw the conclusion that they are doing better performance-wise. For example, Ann Taylor operates and manages 14% of the square footage that Gap operates and manages. However, Ann Taylor’s revenues are 15% of Gap’s revenues. Therefore, Ann Taylor has higher revenues per square foot. In addition, the average that retailers spend in online advertising from their advertising budget is 1%. As stated, Gap was the highest in online spending with 2%. If we assume that Ann Taylor is in with the average at 1% and the fact that they do not advertise on television, we can further come to the conclusion that Ann Taylor is performing better in an advertising cost to revenue ratio.
With the economic downturn we are experiencing, Gap may need to refocus its promotional efforts into more specific target markets. Their product offering and pricing is relatively competitive. Ann Taylor made a smart move in partnering with the deep pockets of Proctor & Gamble.
References
About Gap, Inc. (2008). Retrieved February 2, 2009, from http://www.gapinc.com/public/About/about.shtml
About us. (2007). Retrieved February 2, 2009, from http://www.anntaylorstorescorp.com/aboutUs/index.asp
Ann Taylor. (2009). Retrieved February 2, 2009, from http://www.anntaylor.com/
Ann Taylor profile. (2008). Retrieved February 2, 2009, from http://siteanalytics.compete.com/anntaylor.com/?metric=uv
Company fact sheet. (2008). Retrieved February 2, 2009, from http://www.gapinc.com/public/About/abt_fact_sheet.shtml
Gap profiles. (2008). Retrieved February 2, 2009, from http://siteanalytics.compete.com/gap.com/?metric=uv
Historical square footage. (2008, November 1). Retrieved February 2, 2009, from http://www.gapinc.com/public/documents/Historical_Square_Footage.pdf
How our clothes are made. (2008). Retrieved February 2, 2009, from http://www.gapinc.com/public/About/abt_howourclothesaremade.shtml
Meskauskas, J. (2003, September 17). Revisiting retail: National chains online. Retrieved February 2, 2009, from http://www.imediaconnection.com/content/2024.asp
Old Navy. (2009). Retrieved February 2, 2009, from http://www.oldnavy.com/
Quenqua, D. (2008, October, 9). A way to save and still have crisp clothes. Retrieved February 2, 2009, from http://www.nytimes.com/2008/10/10/business/media/10adco.html
Real Estate. (2008, August 2). Retrieved February 2, 2009, from http://investor.anntaylor.com/phoenix.zhtml?c=78167&p;=irol-realestate
