Sportwear company Athleta built its reputation on yoga wear and gym apparel. Customers found the company online, and soon the fledgling firm had a strong following. Strong enough, in fact, to attract the attention of the Gap. Gap purchased the Athleta brand in 2008, hoping to become more competitive in a field they once dominated.
From all indicators, it appears to have been a good decision. The Athleta line has performed well for Gap, who saw sales in the relevant division increase $100 million dollars the following year. Athleta clothing was only available online and via catalog. Now Gap is taking the brand into the brick and mortar environment, opening a store in San Francisco in January.
This is a move that’s counter to a lot of the prevailing wisdom in retailing, which advocates leaving physical stores behind entirely. The Athleta brand has been doing well already, which leaves the question to be asked: What went into the decision to commit the time, energy, and resources into opening a brick and mortar store for this brand? What makes the leadership at Gap confident that the risk is worth the reward?
Brand Modeling as a Decision Making Tool
The leadership at the Gap are no more capable of seeing into the future than the rest of us are. They don’t know, with absolute certainty, that making the investment in a brick and mortar storefront (especially in pricey San Francisco!) will pay off. But they’re not making the gamble blindly, either.
The Problem of Uncertainty
The largest problem business leaders have is the lack of certainty that confronts us each and every day. There are very few decisions that we can make with absolute confidence. We don’t know the outcome of any decision until we make and implement the decision.
Consider the Gap’s position: there are so many factors that go into the success or failure of a brick and mortar store—and that’s before you factor in the impact of an established brand. While the success or failure of any one storefront may have very little impact on the Gap organization as a whole, it matters to the Athleta brand. It’s critical to give the new venture the best chance for success. The trick is knowing exactly what “the best chance” consists of.
Brand Modeling Identifies The Criteria For Success
At its essence, Brand Modeling is the systematic examination of what your best customers value most about your organization and understanding how to deliver more of that experience. Additionally, you need to know what your best customers value in general, and in your category.
Gap is confident that they know what female apparel shoppers want. Toby Lenk, president of Gap Direct, Inc, which oversees the Athleta brand, said, “With this type of product, women’s active athletic product, it is really important to be able to feel it, touch it, try it on.”
Is the ability to engage tangibly with a company’s offerings enough of a draw to bring customers into the store? Is the point of a brick and mortar store to provide another sales outlet—or to drive more sales in an existing venue? Lenk reports customers spending four dollars on apparel in the brick and mortar setting for every dollar they spend online. It’s compelling information.
Brand Modeling allows us to take compelling information and determine the best way to make use of it. The Brand Modeling process delivers quantifiable, objective data that can be used to examine that conclusion and determine its validity. The richer and more complete the understanding of our best customer’s behavior and motivations is, the more we can introduce a number of variables into our engagement with them and project, with reasonable confidence, how our best, most profitable customers will react. That’s a powerful tool to have, especially when you’re trying to decide whether to open your next location in San Francisco, San Diego, or in “the real world” at all.