Though Old Navy has grown synonymous over the years with branded Fourth of July T-shirts and bargain flip flops, the mass retailer has made a concerted effort to establish itself as a style destination.

As its sister brands in the Gap Inc. portfolio show signs of struggle, the company’s continued focus on innovation and experimentation behind the scenes is translating to results. Analysts predict Old Navy will reach $10 billion in sales in the next few years, and the brand remains the largest contributor of revenue to its parent company, consistently outperforming Gap, Banana Republic and Athleta. In the third quarter of 2017, Old Navy reported the strongest comparable sales among brands with a 4 percent increase, compared to a 1 percent gain for Gap and a 1 percent decline for Banana Republic.

“Old Navy, for its part, is an amazing engine for growth,” said Sebastian DiGrande, evp of strategy and chief customer officer at Gap, Inc. “It has incredibly broad appeal to the American consumer. Yes, it is a value brand, but value is very broadly defined. It has attractive pricing, but it’s also the quality and style of the product, the fun experience and the focus on family that [resonates with] the customer.”

From its early days in the 1990s as a suburban strip mall pitstop to its transformation into a larger cultural force, we took a look at some of the tactics Old Navy has used to stay relevant.

Bargain clothing doesn’t have to look cheap
Old Navy CMO Jamie Gersch said the brand’s success can largely be attributed to its ability to stay true to its value brand roots but still being on-trend. Though Old Navy is traditionally known as a big box bargain store with a core demographic of mothers in their 30s, it’s managed to diversify itself from discount and fast-fashion peers with the help of evolving product design. Gersch said the brand’s robust design team keeps a close eye on emerging trends and style forecasts, like the rise of velvet, shine and textured looks this fall and winter.

“Among our range of competitors, there’s obviously Amazon, Walmart and Target. Then you have H&M and Zara, and the [other] fast-fashion guys. Old Navy is the intersection of all them,” Gersh said. “For us, it’s less about how we compare to our sister brands, and more where we fit in the marketplace.”

According to the National Retail Federation, Gap Inc. ranked 38th in its ranking of top U.S. retailers by sales. It followed Walmart, Macy’s, Target, Kohl’s, JCPenney and Nordstrom, but did manage to beat out H&M. (The list did not break out sales from conglomerates by brand.)

To continue to work its way up the rankings, the team hosts focus groups and surveys to determine customer preferences, which inform design. This approach has helped Old Navy modernize everything from its classic Fourth of July T-shirts to its expanded shoe collection, while making the inventory changes quickly.

“We have response capabilities that allow us to test and put product into stores, and find out what consumers like in real time, instead of having it be a guessing game like it used to be,” she said. “We can respond much faster than we ever have.”

Have fun with marketing
Old Navy has managed to stay relevant with fresh marketing campaigns and tongue-in-cheek advertisements that feature celebrities of the moment. For Black Friday, the brand enlisted comedian and actress Jenny Slate to promote its new fuzzy socks, and it tapped “Stranger Things” star Caleb McLaughlin for its “12 Days of Gifting” holiday campaign. Other recent campaigns employed the likes of Amy Schumer and Julia Louis-Dreyfus.

Gersh said the key for a retailer designed to appeal to a multi-generational demographic is to stay plugged in to the wider cultural zeitgeist. With Caleb, the team recognized the popularity of “Stranger Things” and saw it as a means to capitalize. In recent years, Old Navy has also learned to expand campaign tactics beyond traditional television spots to include wider digital integration.

“We still believe that TV plays a very important role for this brand. But when we talk about TV, we talk about it in the digital sense and TV being watched on desktop,” Gersh said. “So there’s digital video content that’s been made for the digital space only.”

Caleb McLaughlin in an advertisement for Old Navy

Jim Fosina, founder and CEO of Fosina Marketing Group, said Old Navy has been particularly adept at realizing the importance of catering to its younger consumers. Now that the children of the 1990s that grew up wearing Old Navy have matured into adulthood, the brand has managed to retain many of these consumers by recognizing the importance of meeting them on social media.

“Old Navy has done an amazing job of managing the shifting media consumption patterns of their younger audience,” Fosina said. “They understood early the fact that they needed to be out ahead of the media consumption patterns of their audience, and build connections throughout the digital networks and social media.”

Get experimental in-store
As Gap and Banana Republic prepare to close 200 low-performing stores stores, both Old Navy and Athleta will continue to expand their brick-and-mortar presence with a combined 270 stores slated to open in the next few years. In October, Old Navy opened its first store in Times Square, intended to increase visibility to tourists and international visitors.

Beyond expanding the footprint, Gap Inc. is experimenting with in-store technology across its entire portfolio, a move that has already proved advantageous to Old Navy. The company launched “buy online, pickup in store” capabilities at select Old Navy stories and is now rolling out a mobile point-of-sale device to sales associates, which allows them to assist customers on the floor.

Additionally, DiGrande said Gap Inc. is in the process of testing an app that helps associates keep track of product and notifies them of when a display needs to be replenished. “You’d be amazed at how much retail is available, but it’s just sitting in the back room. The ability to rapidly replenish has a tremendous impact.”

Gersch said in-store promotions have also been vital to driving foot traffic. This holiday season, Old Navy launched its “SaturYAY” event series, featuring giveaways and special promotions starting the week before Black Friday and lasting through the New Year. These activations, which include in-store pajama parties and Christmas wish list stations, are designed with the family in mind.

“We’re going after how after the American population embraces fashion. It’s fashion for the people,” she said.