Gap Inc. appears to be the latest chain following a rapidly-growing retail technology trend.
In a recent column, I wrote about how an increasing number of retailers are attempting to evolve into full-fledged technology platforms. Tech giants like Amazon, Apple, Google, and Facebook serve as the template which retailers Instacart, Walmart, Target, and Kroger have all been trying to follow.
Specialty apparel retailer Gap Inc. is also showing clear signs of eyeing a transformation into a technology platform. Since moving to the cloud in October 2020, Gap Inc. has been focusing on acquiring and applying leading-edge solutions, to the extent it is now in the position to act as a technology vendor.
Here are three areas where Gap is slowly but steadily moving toward becoming a tech platform.
Gap recently acquired Context-Based 4 Casting Ltd. (CB4), a New York- and Tel Aviv-based retail artificial intelligence and machine learning platform. The start-up provides technology that is intended to increase sales and improve customer experience through predictive analytics and demand sensing.
In addition, CB4’s technology has been implemented by retailers including Levi’s, Urban Outfitters, Lidl, and Kum & Go. This puts Gap in the enviable position of providing technology to fellow retailers, much as Amazon does by licensing its “Just Walk Out” autonomous checkout system to retailers including Hudson Travel.
The specialty apparel retailer has also focused a $100 million-plus investment in fulfillment centers in Phoenix, and Gallatin, Tenn. on increasing speed, flexibility and efficiency. The expansions at the company’s 1.4-million-sq.-ft. facility in Gallatin and its 400,000-sq.-ft. facility in Phoenix now enables online order fulfillment for more of its brands.
Earlier this year, Gap announced plans to open a new, 850,000-sq.-ft. customer experience center in Longview, Texas to support Old Navy’s growing online business. Similar to its other customer experience centers, the new Longview facility will include best-in-class fulfillment technology and automation to meet shoppers’ ever-evolving needs. Gap also plans to expand capabilities at its Fresno, Calif., and Fishkill, N.Y., customer experience centers next year as well.
Gap has also been deploying AI solutions and robotic technologies in its fulfillment centers. The company’s intensive focus on maximizing supply chain efficiency with the very latest in advanced distribution technology is reminiscent of how both Amazon and Kroger are developing their own next-generation fulfillment center models.
In August 2021, Gap acquired Drapr, a startup that enables customers to create 3D avatars and virtually try on clothing, on the heels of a new initiative at its Old Navy banner called “Bodequality,” which offers every one of its women’s styles, in every size, with no price difference.
The Drapr platform is designed to help customers find the best clothing size and fit for their personal style and body type, while helping retailers reduce unnecessary returns.
“Drapr’s technology will help us deliver a more personalized and inclusive fit experience for all of our customers by showing them how an item will actually look on their body while also recommending the best fit for them based on their individual preferences,” Nancy Green, president & CEO of Old Navy, said at the time of the acquisition. “We plan to leverage Drapr to help Gap Inc. improve the fit experience for our customers and accelerate our ongoing digital transformation.”
It’s one thing to implement a technology solution, but another to acquire the entire company which develops it. Gap’s decision to purchase Drapr outright enables the company to obtain unique competitive advantage from its virtual try-on capability, as well as customize the technology to meet specific proprietary needs, and resell or license it (or portions of it) to other retailers.