Gap Inc. launches online stores for three retailers

Banana Republic, Old Navy and The Gap shoppers will now be able to shop online in Canada; Gap exec Toby Lenk explains why it took 10 years to make it happen.

It’s been 10 years since Gap Inc. launched online stores for its retailers in the US, but Canadian consumers had to wait until yesterday to browse the virtual racks at The Gap, Old Navy and Banana Republic.

The three retailers are celebrating the launch with a free shipping offer to consumers, and the debut will be promoted by guerrilla teams at commuter locations in Toronto, Montreal and Vancouver today.

With marketing handled internally, the new stores will also be promoted with a Yahoo Canada homepage takeover and search engine marketing, explains Toby Lenk, president, Gap Inc. Direct. Lenk, who heads the e-commerce division of the San Francisco-based retailer, was in Toronto yesterday for the Canadian debut.

‘In the US, our online sales, if you divide them into our store sales, are about 10%,’ explains Lenk in regards to how important the online business is south of the border. ‘That’s after building it up for 10 years,’ he tells MiC.

The e-commerce sites will be promoted to consumers through Gap Inc. email blasts and in-store postering, but the websites are marketing mediums unto themselves due to consumers propensity to pre-shop online before going into the stores, Lenk says.

‘Our existing customers want to shop online, and if we don’t provide it they’re shopping from somebody else online,’ he explains. ‘In that sense we’re actually going to be taking share of wallet back from other people who do have online that our customers are already dipping into. But in addition, there are online customers who may not be as familiar or as bonded to our brands because we only have [physical] stores – so we can steal [market share] from competitors.’

The message the company wants to covey with its marketing this fall is the ease of online back-to-school shopping for parents who might be at the cottage or overwhelmed at the end of the summer, explains Tara Wickwire, director, public relations, Gap Canada.

Online shopping in Canada still accounts for just 3% of the overall retail market, according to ‘E-Commerce Channel Report: Canada 2010′ from NPD Group. Lenk says that this number will grow once mainstream retailers like the Gap Inc. brands open up online shops, but the reason it took so long is because the company did not want consumers to have to shell out for shipping from the US.

‘We would have loved to do it a little sooner,’ says Lenk, adding that it took time to be able to finance warehousing and delivery systems for Canada.