Gap Inc. is hoping to make up for a lackluster year of sales in 2016 by setting its sights on an augmented reality app.
The company — which owns Gap, Banana Republic, Old Navy, Athleta and Intermix — announced yesterday that it plans to trial a virtual dressing room app for the Gap brand. With the help of augmented reality and avatars, the DressingRoom app will allow consumers to virtually try on clothes without physically having to enter a dressing room.
“Gap has been working on the fit of our products to better match the way customers are shaped instead of just looking at ‘fit model’ sizes,” Gil Krakowsky, vp of global strategy and business development at Gap, said on the brand’s blog. “One of our top priorities is continuing to improve our technical knowledge around how fabric stretch, drape and feel impact the sensation of fit.”
An image from Gap’s DressingRoom app.
The brand’s announcement, which was made yesterday at the Consumer Electronics Show in Las Vegas, comes on the heels of several quarters of faltering sales and shuttered doors. In 2015, the company closed 175 stores, and in the same year, it experienced a 27 percent decrease in sales from 2014, coming in at $920 million. In August, a Gap distribution center in Fishkill, New York caught fire, fully destroying a 990,000-square-foot facility, further hindering business and tarnishing brand reputation.
Like peers such as J.Crew, Gap has faced consumer criticism for its lack of enticing styles, and looks that vacillate between too trendy and too simple. It has also faced ongoing executive turnover and changes in creative direction that have made it difficult to construe a coherent brand identity. In a note to investors in November of last year, Morgan Stanley retail analyst Kimberly Greenberger warned that the damage done to the beleaguered Gap Inc. may be irreparable.
“We think Gap’s valuation proposition is no longer competitive, and two of its major brands (Gap and Banana Republic) have lost relevance with consumers,” Greenberger said. “These are not easily fixable near-term, leaving us confident Gap will continue to cede share like the department stores and teen retailers.”
Scott Rothbort, finance professor and market strategist at Seton Hall University’s Stillman School of Business, said part of Gap’s difficulty is appealing to younger teenage demographics that the brand has historically catered to, and who are particularly fickle.
“Gap as a brand itself is very unappealing,” Rothbort said. “The question becomes: Is the app going to be enough to bring in shoppers they’ve lost or to steal away shoppers from other retailers? That answer is yet to be answered.”
However, while the app may appear to some as a ploy to reel in younger consumers, Rothbort said Gap dabbling in augmented reality is a logical next step for a retailer operating in the digital era, noting companies that have already leveraged this technology like Warby Parker.
“You can argue that it’s a desperate effort on their part, and on the other hand, you can say they’re using cutting-edge technology to differentiate themselves from other retailers,” Rothbort said. “I don’t think a company would invest in technology and do something if they’re just trying to roll the dice.”
Julie Ask, vice president and principal analyst at Forrester, said that, among those using augmented reality apps, she anticipates retailers won’t feel an impact for several years as consumers continue to gain awareness of the new technology. While efforts like Pokémon Go gained a critical following around augmented reality, it still remains largely unused. “At the end of the day, technology has to deliver convenience — otherwise, who cares.”
