Why Old-School Brands Like Gap Need to Learn New Tricks to Survive in the Digital Age

Being agile is the key to survival

Illustration showing people running while holding papers or coffee
For brands, digital transformation usually centers on optimizing the customer experience.
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On the third floor of Gap Inc. in San Francisco, near the western terminus of the Bay Bridge, a bank of 14 big-screen monitors displays web visits, order volumes, sales funnels and other real-time analytics to a constantly rotating team of employees.

This is Mission Control, the beating heart of Gap’s customer experience group. Here, producers, front-end developers, UX designers, data scientists and employees with Swiss Army knife business skills from across all six Gap brands gather to define and refine the customer journey.

Depending on the time of year, between 15 and 50 employees are at Mission Control, helping the 49-year-old company operate at internet speeds, says Noam Paransky, svp of digital at Gap Inc.

Paransky began assembling the team last June, giving it time to ramp up for the peak holiday-shopping season.

White smartphone showing a beach scene in the Marriott app
20 million guests have checked into their rooms using the hotel chain’s mobile app; some even can open their doors and order towels with a few taps.

“We’re focused on getting into the guts of the experience, doing a lot of optimization and deep user research, and continuing to drive our business forward working hand in hand with our tech operation center,” he says. “By having an interdisciplinary team physically located and working together, and then connecting in with the rest of our broader organization and centers of excellence, we’re able to have a pulse on the business in a way that we didn’t have before.”

Mission Control is just one sign the $15.5 billion apparel retailer is taking transformation seriously. Over the last six months, Gap has rolled out subscription box services for babyGap and Old Navy customers, introduced curated product recommendations and is testing low-barrier loyalty programs customers can sign up for via SMS.

That’s because old-school brands like Gap know that new tools and terabytes of data aren’t enough; to survive in this brave new digital jungle, they need to reinvent how they do business.

Digital now, transformation later

When it comes to digital transformation, most brands have the digital side down. They’re using Adobe or Salesforce marketing cloud, Sprout or Sprinklr for social engagement, RedPoint Global or Segment to manage customer data, and so on.

It’s the transformation that’s the hard part. Because it’s not just about having the right tools, it’s about having the right kind of organization, operating model, talent and mindset, says Jason Heller, partner and global lead for digital marketing operations and technology at McKinsey & Co.

“Most companies are technology rich but insight and execution poor,” he says. “They have the technology, they just aren’t using it properly.”

For brands, digital transformation usually centers on optimizing the customer experience. Smart organizations are creating cross-functional, co-located teams (or pods) that can generate ideas, test and launch them in less time than it takes most organizations to set up an initial planning meeting, says Heller.

“You can have a pod that comes up with an idea on Monday, executes it on Wednesday, and has enough data by the following Monday to make a call and roll out a new experience,” he says. “When companies put this kind of team together and take all the business-as-usual responsibilities off their plate, 100 percent of the time it leads to a broader agile marketing transformation.”

According to Gartner, by 2020 more than one in five marketers will restructure their organizations to focus on the customer experience.

“Modern marketing organizations are starting to operate more like agencies, where talent is dynamically assigned to projects,” says Christopher Ross, research director at Gartner’s digital marketing group. “It’s not based on where a person sits inside the organization but on the talent they need for a particular project. The common denominator is a much more agile way of working.”

Font farewells

Few companies have gone through a more dramatic digital shift than Monotype. The Woburn, Mass.-based firm started selling hot lead typesetting machines to publishers in 1887. After selling off the typesetting business, Monotype then went on to become a font-licensing firm, owning the intellectual property behind classic typefaces like Helvetica and Times New Roman.

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This story first appeared in the Feb. 26, 2018, issue of Adweek magazine. Click here to subscribe.

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