Gap shut down its media program after just a year

Last year, clothing brand Gap launched GPS Media, a program where the retailer would sell ads so brands could target shoppers on its e-commerce site. Roughly a year later, Gap has “paused” GPS Media and shifted its investments to new supply chain and custom clothing programs that are core to its main retail business.

Instead of GPS Media, Gap is devoting resources to support GPS Platform, which handles logistics and fulfilment services for other retailers including next-day and two-day shipping. Gap has also started GPS Apparel, which customises apparel for companies.

This comes at a struggling period for Gap who has reported weak sales during the fourth quarter, usually the busiest time of year, and it is still looking for a permanent CEO after previous chief Sonia Syngal stepped down in July.

One on hand,  retail media as an industry is projected to be worth $45 billion in 2023. However, retail Gap’s dissolution of GPS Media underscores the challenge of building and supporting a fledgling ad business, especially as other retailers court advertisers with competitive pitches.

Furthermore, competition in the retail media business makes it hard for retailers to differentiate themselves. Giants like Amazon and Walmart have the traffic and scale to win advertisers. And niche retailers that dominate specific verticals like Home Depot in home improvement and Kroger in grocery can also win advertising dollars. But for other retailers that don’t have big pools of data or e-commerce shoppers it’s an open question to what extent these businesses will be worth their while. 

Another disadvantage is that Gap’s media retail only sold its own brand so it wouldn’t be able to sell ads from other apparel and fashion brands that would buy search ads on other platforms like Amazon, Walmart, and Target. 

Large brands in general are struggling to use TikTok to their advantage. TikTok taps into a very fresh audience giving lagre brands a great opportunity to rebrand from scratch without having to acknowledge their past reputations to a certain extent. Many marketed argue that the issue is adding TikTok to a company’s Instagram Team’s to do list and this simply won’t work as the very different app requires a very different strategy in order to succeed. 

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