Gap plans to salvage dismal sales by partnering with e-tailers like Amazon, but the brand should also leverage its own retail footprint.

“To not be considering Amazon and others would be — in my view — delusional,” CEO Art Peck said at the company’s annual investor meeting on Tuesday.

Gap shares have fallen 30% in value this year, and the brand continues closing stores as sales tumble. Meanwhile, Amazon is set to become the largest fashion retailer in the U.S. It looks like Gap could be slashing the very thing that gives it an advantage over Amazon and the competition.

As evidenced by the closure of, being an e-tailer without stores works for few besides Amazon. Even brands that started with e-commerce, like Warby Parker, Bonobos, and Rent the Runway, are adding stores. Likewise, Gap’s retail footprint could be an advantage. Most U.S. consumers still prefer to shop in stores to inspect items before committing to a purchase. Even millennials would rather try on clothing than order it online.

But L2 research suggests that retailers like Gap can better leverage their on-the-ground presence with digital tools. Omnichannel capabilities encourage browsers to visit stores, where they can try on clothing before purchasing. Gap has already rolled out several omnichannel features, such as the ability to reserve items online and collect them in-store – a functionality adopted by only five brands in L2’s Digital IQ Index: Specialty Retail. Yet customers may not be aware of those features. With better promotion of these tools, Gap could attract shoppers who would otherwise buy on Amazon.

Omnichannel investments across time


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