The Gap logo story has been playing out for almost a week now. At the time of writing the long term impact on the brand is unknown. What is known is that the reengineering of the Gap logo has cost a lot of money that need not have been spent.
In their book Measuring Brand Communication ROI (1997) Don Schultz and Jeffrey Walters describe how marketing now represents 50% or more of a company’s costs, up from roughly 20% after WWII. At the same time, manufacturing and operations have reduced their costs from 50% in the 1950s to in the region of 30% today.
This is hardly surprising when we witness such disasters. Why is it that costs are coming down in all departments except marketing?
Part of the reason is Brand owners believe that although it makes sense to invest in the most cutting edge technology to improve manufacturing and other processes, when it comes to branding and branding activities such as advertising, marketing, identity and so on, they assume that what worked in the past will work today. So, if creativity and a generous advertising budget was enough to build a brand in the 1970s, then surely it is enough to build a brand in the 2010s?
But of course it isn’t. And there are multiple reasons for this but the most dominant reason is the arrival if the Internet. The Internet has transformed supply chains, processes and the way we communicate and more, but most important of all, it has given consumers a chance to play a part in the evolution of a brand.
Last week, to much (Gap generated) fanfare, Gap unveiled and launched a new logo that it described as “a more contemporary, modern expression”. The new logo was designed by Trey Laird of the design company Laird and Partners. Laird and partners has worked with DeBeers, Tommy Hilfiger, Calvin Klein and others.
Gap spent a fortune, in the mass economy way, creating the new logo, developing an advertising campaign and buying airtime to tell the world about the new logo and what a great and cool company Gap is. A Facebook page was created, essentially to broadcast the same message.
Unfortunately customers, consumers, designers and others universally hated it, expressing their feelings via thousands of tweets and, ironically with Facebook messages on the Gap and other often humourous but always derogatory, Facebook pages.
Under immense consumer and other pressure and in a matter of days, Gap vowed to return to the original logo. But the company has spent a small fortune developing the new identity and as a result the company had little choice but to go ahead with its upcoming advertising campaign. This is probably because the company has already booked and/or bought the airtime. Yet further wastage of valuable marketing resources.
What lessons can aspiring retail or other brands learn from this debacle?
1) Carry out research with customers. Even an established brand must carry out research with customers before making a decision that will impact its relationship with those customers, the people who made the brand what it is. The new logo was tested internally but never externally. Big mistake.
2) Social media is not a fad or to be taken lightly. I get the impression, perhaps wrongly that Gap paid only lip service to Social Media. Social Media CAN effect change so learn to work with it. But remember it is not a soapbox. Simple consumer research at the logo development stage on Facebook and Twitter would have saved the company a lot of money and also improved consumer engagement.
3) Have a strategy for your tactics. Not many new Logos are well received initially. But many of them are now very familiar – Pepsi, Citi, Accenture, Qantas etc. Has Gap done the right thing by giving in to consumer pressure so quickly? It’s too early to tell, but one thing is for sure, they weren’t prepared for the reaction.
4) React quickly and positively. Despite initial fumbling, Gap has reacted well to the situation and is seeking suggestions to improve the logo on Facebook. How they manage the responses and implement any recommendations will have a major impact on the brand going forward.
5) Maintain your stand. Again, Gap has reacted well here. They are letting the initial storm die down whilst making it known that they are seeking recommendations for improvement from customers at the same time. Over the next couple of weeks there will be numerous meetings to review social media chatter. Don’t be surprised if the new logo is retained, perhaps with only minor alterations.
6) Brand identity should not be confused with branding. Gap has had a tough time over the last few years will poor sales and a weak share price only gaining support around US$18. Some industry insiders say the company panicked and thought a quick makeover of the logo, if received positively, could raise the profile of the brand and improve sales. Personally, I don’t believe Gap management is so naive but if its true it may prove to be a costly mistake.
It’s too early to tell what will be the impact of this event on the Gap brand. It hasn’t had much of an impact on the share price, even though the financial cost maybe high.
One thing is for sure, it is only a matter of time before boardrooms and business owners get fed up with the profligate attitude of traditional marketing departments.