In September 2020, influencer Emma Chamberlain posted a series of photos by the pool sporting a vintage navy blue Gap hoodie to her 13 million Instagram followers. Other influencers soon followed, and by early 2021, the trademark '90s gear was blowing up on social media and being sold for markups as high as 300% on some resale platforms.
"Emma Chamberlain is highly influential to my generation, so once she wore it, I knew others would follow — which they did," said TikTok influencer Lola Clinton-Hayward, who predicted that Gap would be in vogue in 2021.
After velour tracksuits and low-rise jeans, Gap hoodies are another Y2K era relic that have been brought back by Gen Z, as the pandemic evokes that yearning for the yesteryear. And experts say the social media buzz may signal a comeback for the once-iconic American retailer, which has struggled to stay relevant in recent decades.
The company just reported its highest second quarter sales in over a decade, marking the second consecutive quarter of growth for its flagship brand. Financial analysts are bullish on Gap's recovery, and its parent company's stock has jumped more than 51% over the past year.
"Gap is back in the cultural zeitgeist, and everybody's revisiting them," said Brendan Gahan, partner and chief social officer at agency Mekanism.
Gap's staples were ubiquitous in the '90s
Gap's signature hoodies and jeans were ubiquitous in its heyday. Its ads struck a chord, with 1998's "Khaki Swing" commercial winning accolades.
But as it grew, Gap lost its cultural cachet, becoming synonymous with suburban American malls and heavy markdowns. There were marketing missteps, too, like a logo redesign in 2010 that prompted backlash and 2014's #dressnormal campaign that tried to co-opt the normcore trend, experts said.
"They were never able to truly land an emotional brand proposition," said Alain Sylvain, founder and CEO of strategy and design firm Sylvain Labs.
When Mary Alderete became CMO in early 2020, Gap was reeling from plummeting sales, store closures, business missteps, an executive shakeup, and neglect.
"It had become too much about product marketing, and there is so much more to this brand than what we sell," Alderete told Insider. "We needed to refocus on what people love about Gap and get those stories out there."
Gap has updated its products and marketing
Alderete and Gap's creative director Len Peltier went back to the drawing board. They took Gap's advertising in-house and came up with a new positioning they called "modern American optimism."
The result was campaigns that featured figures like transgender youth activist Rebekah Bruesehoff and tied Gap to social causes like anti-bullying. Alderete's first major campaign, "Stand United," promoted civic engagement. Its recent Gap's back-to-school campaign "Individuals" told the story of David Jamison, who went into education after growing up without Black male teachers. Such ads helped boost the retailer's relevance, according to its CEO.
"They've done a good job having a strong point-of-view and more inclusive advertising over the past year," said Bri Heu, director of strategy at design and strategy firm King & Partners.
At the same time, Gap's new CEO Sonia Syngal set out to make Gap relevant again by dialing up e-commerce and brokering partnerships with influencers and celebrities like Kanye West while slashing its product lines to prioritize styles geared toward young shoppers. 75% of pre-orders for the new jacket from the Kanye West collaboration came from customers who never shopped with the brand before, Syngal said during the brand's 2021 second quarter earnings.
Gap has also jumped on trendy styles like mom jeans and tapped influencers like Chelsie Hill and Lisa Asano for its "Gap Hoodie Color Comeback" campaign that invited TikTok users to vote on a new hoodie color.
"TikTok is the new mall, and they were very fortunate that consumers decided to bring the brand onto the platform," said Mekanism's Gahan. "But they realized they needed to own it, invest in it, and build upon it because lightning generally doesn't strike twice."
Gap is betting on an online future
The onetime American mall mainstay has been shutting physical stores for years, and plans to close more than 350 Gap and Banana Republic stores in North America by 2023. It's instead making a bigger bet on e-commerce. Gap is working to improve its mobile experience and email personalization to drive sales. And it just launched a loyalty program to get people to spend more across Gap Inc. brands.
Gap's reset coincided with the pandemic, when people were seeking casual attire and longstanding brands, said Jason Goldberg chief commerce strategy officer at Publicis North America. E-commerce sales have helped offset in-store declines, surpassing $6 billion in 2021's second quarter. It's seeking more collaborations like its deal with Kanye West's Yeezy, which Wells Fargo estimated could drive up to $990 million in incremental sales in fiscal 2022.
But not everyone is convinced that the retailer is on the right track. Bob Phibbs, CEO of consultancy The Retail Doctor, said Gap had become too promotional over the years. Others have questioned its lack of a clear strategy, with Yeezy on the one hand and Walmart on the other.
"The number one problem they have to solve is margin and design ethos. You can't cut your stores to profitability," said Phibbs. "They need to be clearer than ever about who they are. Gap still has a long way to go."
