In June 2020, the Gap announced that it was partnering with Kanye West to launch a new sub-line called Yeezy. It was a major, but more so, desperately needed initiative from an iconic American retail brand who’s fallen from grace.
Gap launched in 1969 in San Francisco and quickly became a hit among the younger generation at the time with its casual, yet refined apparel. The brand eventually reached pop-culture phenomena status in the 1990s, being found at every shopping mall, mentioned in popular media, and worn by influential celebrities.
But things took a turn for Gap in the mid 2000s. Sales started to consistently decline, as consumers shifted towards online shopping. Gap and its owned-brands (Old Navy, Banana Republic) were overly invested in physical stores, which hurt its P&L because in-store sales failed to match operating costs. Shoppers also gravitated to fast casual names like Zara and H&M who were churning out trendy looks at affordable prices, while Gap’s basic clothes were considered “boring”. Since 2018, Gap’s sales have declined each quarter. The company needed a major strategic revamp, which ultimately led to its announced collaboration with Kanye West.
On June 8, 2021, almost a year after the initial announcement and on Kanye’s actual 44th birthday, the first item from the Yeezy line was available for pre-order on Gap’s website: a electric blue Round jacket made out of recycled nylon and priced at $200. Unsurprisingly, it sold out in a couple hours.
If Gap didn’t pursue anything drastic to turn its business around, it probably would’ve been acquired or closed shop within a few years (it’s actually in the process closing several hundred stores within the next few years). The collaboration with Kanye West is the dynamite needed to blow up and rebuild the Gap brand for a few reasons.
- Reach a younger customer base: Gap holds little affinity with Millennial and Gen Z consumers. It’s ironic because Gap used to be seen as the clothing choice of the younger generation. If it relies too heavily on an older customer base, Gap’s sales will dry up when this cohort cuts back clothing spend or eventually dies out. Fashion is a continuously changing industry based on trends usually set by the younger generation. For Gap to improve its sales, it needs a younger core to buy its clothes.
- Capture a level of cool: A reason why Gap isn’t appealing to younger customers is because it lacks coolness. Gap used to have commercials with cultural figures like Madonna, Missy Elliot, and LL Cool J, but lost its lust over the years. Gap has become the jeans and khakis that your parents wear. The brand has collaborated with rising designers in the past for capsule collections, but those were short burst tactics. Gap could feasibly produce more trendier or in-fashion looks, but there would be little demand due to the lack of cool. It would be like an old guy trying to fit in with a group of teens.
- Infiltrate conversations: To be a sustain growth and success as a brand, Gap needs to be part of mainstream discussions. It needs kids to be excited to wear their new Gap clothes to school. It needs influential fashion figures to talk about its latest designs. It needs people to frequently check out its stores for the latest releases. This helps brands proliferate without the need to spend so much on marketing and advertising.
Ironically, Gap was the brand that it needs to be now. It’s a testament to the importance of constant product innovation and customer engagement.
The partnership with Kanye West is a great move for Gap to turn the ship back towards the glory days. Though Kanye is “old” in terms of his place in the current music ecosystem, his influence with the youth is one of the strongest amongst any celebrity. His Yeezy sneakers with adidas generated over $1.3 billion in sales in 2019 and continues to sell well. Even with all his controversial political and social commentary, Kanye hasn’t been canceled by the masses, which proves his staying power. Lastly, Kanye has been one of the most talked about people of the last decade. There is no boring moment for the outspoken West, as he understands how to control his public narrative to promote this work or products. It also didn’t hurt to also be formerly married into the Kardashian drama machine.
A more hype driven/ guerilla marketing approach was taken for the Round Jacket pre-order. In the week leading up the launch, Kanye was spotted in Los Angeles wearing the electric blue jacket, even in warm June temperatures. Additionally, projections of the Round Jacket were displayed on buildings across New York City, Los Angeles, and Chicago, a similar tactic West used in 2013 to promote his Yeezus album. Gap also deleted every single photo on its Instagram page, except for one lone image of the Yeezy jacket.
Kicking off the Yeezy launch with only the jacket is an impactful decision. It funnels awareness and attention to solely one product, which amplifies marketing value. If it was an entire apparel collection, the impact would be diminished because it would be spread across multiple products. From a digital aspect, Gap required customers to enter their name, email, phone number and sizing information, which collects valuable data for CRM retargeting efforts. Lastly, making it an online-only reservation drives major traffic to gap.com and potentially drive ancillary sales while people are on the website.
Gap’s partnership with West is supposed to be a 10 year deal, with the rapper collecting royalties and possibly equity based on how much the Yeezy product sell. This should motivate West to not only produce intriguing products for Gap, but also serve as a vocal ambassador for the brand, which helps achieve the three “why” reasons listed above. Gap expects the Yeezy line to break $150 million in sales in its first full year in 2022, and eventually becoming a billion-dollar revenue generating brand within eight years. The partnership started to pay off immediately with Gap Inc.’s (Gap’s parent company) market value increasing by $700 million after beinging publicly announced.
According to GAP’s CEO Sonia Syngal, there’s still no official launch date for the Yeezy line, but the sold out pre-launch of the Round Jacket is a sign of positive consumer interest in the collaboration. Let’s see if Kanye can replicate what he did with adidas for Gap. You can access the Round Jacket product page here.