Gap Reportedly ‘Pauses’ Ad Business
Gap has paused its GPS Media business and shifted investments to new supply-chain and custom clothing programs that are core to its main retail business.
Taking resources from GPS Media, a Gap spokesperson told Insider that the company will shift support to its GPS Platform that handles logistics and fulfillment services for other retailers including next-day and two-day shipping. Gap has also started GPS Apparel, which customizes apparel for companies.
“I think that a company like Gap faces a few challenges in trying to compete for retail media dollars,” Lindell Bennett, CRO of Cooler Screens, wrote in an email to Search & Performance Marketing Daily. “First, they only sell their own brands. Second, the biggest players in retail media — Amazon, Walmart, Roundel, Kroger — sell across multiple categories and have greater online scale.”
Finally, he asked, what assets does Gap have to differentiate itself in a crowded market? Is it the company’s audience or the data?
“It’s not clear how brands could use Gap to amplify their own brand or data strategies, since Gap is about Gap, not other brands,” Bennett wrote.
During a presentation in 2022, two executives at the time touted Gap’s extensive first-party data and reach across the U.S., and envisioned an opportunity to work with non-retail brands like film studios and entertainment companies.
But Andrew Lipsman, principal analyst at Insider Intelligence, wrote in a post that the growing number of retail ad businesses like Walmart, Sam’s Club, Target and others makes it difficult for retailers to differentiate themselves.
Lipsman also wrote that the Gap disadvantage in retail media because it only sold its own brands. 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.