The Good News at the Gap

Dec. 1 -- ‘Bricks-and-clicks’ may be a great corporate catchphrase, but it’s a lot harder to actually put into practice.

Just ask Wal-Mart, which had to shut down its site this fall for another makeover. Or Toys R Us, which decided after last Christmas’ disastrous fulfillment problems that it had best hand that part of things over to Amazon.com.

Ask enough people which traditional retailer has made the best transition to the Web, though, and one name keeps coming up: Gap, which has managed to develop a much-praised e-commerce business without also developing the kind of financial albatross that plagued the likes of Federated .

Weaving a Strategy on the Web

We wanted to find out how the chain did it.

First, Gap has had some time to experiment with its Web strategy. It recognized the potential of the Internet as both a branding tool and a sales channel relatively early, launching a Gap.com site in 1996 and then adding e-commerce in time for holiday 1997.

That gave it some time to figure out what works and what doesn’t while also establishing an online presence, in contrast to other apparel retailers like Abercrombie & Fitch and AnnTaylor, which took longer to get to the Web. (Many apparel chains, like the Limited companies, still don’t have e-commerce.) After Gap.com, the company rolled out e-commerce at GapKids.com and BabyGap.com in 1998, and introduced online sales at BananaRepublic.com in 1999. This year, it began selling goods at OldNavy.com.

And the company built on the ubiquity of its 3,000-plus stores. Its online operations weren’t set up as a separate business unit like Toysrus.com, Barnesandnoble.com or Nordstrom.com. Instead, its headquarters are tucked in along with its other operations in San Francisco. “We believe this integrated approach is better for our customers because they can expect the same level of service and quality of product across all our distribution channels,” says Kellie Leonard, Gap spokeswoman.