Global chief marketing officer, Gap, Inc.
Things looked bleak for the iconic fashion retailer Gap circa early 2011. Same-store sales were plunging — along with the company’s stock price. The company hadn’t delivered a breakthrough product since baby boomers embraced a khaki revolution in the 1990s. Over the next decade, Gap had lost its ability to inspire those boomers, and fared no better at capturing the imaginations of the generations that came next, including the trend-setting urban millennials. Many experts considered this a marketing problem, and the company hired Seth Farbman as its first global CMO to help right the ship. We caught up with Farbman to see how his newly centralized, data-driven department is working to more quickly respond to shifting tastes around the globe.
What were the company’s expectations for you when you joined as global CMO?
Glenn Murphy, our CEO, recognized two years ago that he needed to make some fairly significant changes, certainly in marketing, but really in the company’s approach to growth. One of the shifts was to truly become a global brand. We started to see that nearly half of the company’s revenue would soon come from outside the United States. That growth had already started to change the shape of the company. It was a shift from a North American model to a global model.
What was the big challenge for marketing at the time?
We’d become highly, highly decentralized and we needed to go to a centralized model. The brand was showing up very differently in all of our markets, in the product, in the store environment and in communications. Obviously, as the world becomes more connected, whether through travel or through social networks, that approach falls apart pretty quickly. You have to create one seamless, connected experience.
How did you do that?
We decided to take marketing, which had been in San Francisco since our founders came up with the idea of calling the store The Gap, and moved it to New York. We sat marketing next to our design team because in our business, design is product development. I came in at the first trigger point in New York. I built a marketing team alongside design. I’ve been very, very deliberate in creating a department of global citizens, people from around the world who represent our customer globally. This immediately changes the way that you think about the brand and deliver the customer promise. We appointed a single global president of Gap brand and a single P&L under that person. We have operational functions and the creative functions in New York. Marketing and design are the two leads. This is not insignificant culturally for a company that’s as passionate about its heritage as we are.
Does marketing actually collaborate with design?
What we’re doing happens well before anyone picks up a sketchbook. We’re looking at the shifts in the way people live, in lifestyles, in population, in attitudes and behaviors. We’re looking at data that comes mostly straight off of social media to give the design team a sense of where the customer’s going to be a year from now, and not just in fashion, but in lifestyle.
What sorts of trends are you seeing?
As an example, we’re seeing that people are starting to buy fewer things, but each with greater durability, sustainability and quality. Customers now expect their purchases to serve more functions and more purposes. That sort of observation can be fed into the way that we design a product line. We may choose to increase quality and increase price to reflect the customer’s desires. This is our new production line. From a marketing standpoint, we may also use this type of information to adjust how we’re spending our marketing dollars. We may adjust the channels, the markets, the types of conversations we’re having online and the content that we create. It’s just a much more fluid and connected way of bringing a product to market. It may seem commonplace for a technology company, but this is all new for a company like ours.
What have you learned about presenting insights that are generated from data?
You need to have an instinct and a point of view. Creative people—creators, designers, marketers, inventors, technologists—the best ones all have an instinct for where the market is going. But you also have to understand that there are many different types of data. There’s an awful lot of data in the way you experience the world. First, you have to be well-informed and instinctual and come at a situation with a clear point of view. Then you use data to fine-tune or validate that point of view and make adjustments. We rely heavily on social listening in this way. We can place ideas in social media and generate real-time feedback. It helps us refine our ideas and gives us more confidence.
Can you give an example of social analytics informing a business decision?
We’re constantly scrubbing the Web for keywords and sentiment, but our frontline employees are possibly our best source of information, so we deployed something a few years ago called Chatter, which is essentially a closed social network that allowed employees to share their own comments, customer comments and questions in somewhat real time. That way, when we have a new product come in, we know when we have something that’s going to take off in a big way. That allows us to adjust orders and change the delivery schedule or the locations. Chatter gives us greater quality control at the store level. But more than anything, it’s that early indicator.
Why is that important?
Last year we did our first collaboration with DVF, Diane von Furstenberg. We had Diane develop a line of product for girls and for toddlers. We weren’t sure whether this would be a big idea or a small idea. We discovered that, in a way, it was both. It was huge in the large metropolitan markets like Los Angeles, New York and Chicago. As soon as the product hit, Chatter just blew up. A couple of days later, through Chatter, we recognized that we had to move product all around the country. Scarcity is a good marketing strategy at times, but we were disappointing too many customers in places like New York, while there was too much product sitting around in other markets. The employees knew it right away. They began to talk through Chatter back and forth: ‘We have plenty of that here. Why don’t we send it to there?’ Suddenly, employees become part of the inventory management system. This is a much better approach than waiting to analyze sales data and then trying to determine the appropriate action.
Do you use data to inform how and where you spend your marketing dollars?
In the digital, and especially social, space, data analytics has allowed us to react quite a bit to trends and to change the flow of communications. Generally speaking, it allows us to make informed choices more quickly. You know, do we lean into the Gap Kids brand or Baby Gap or adult or denim? When we see and feel momentum in one area, we can change the messaging as appropriate.
It sounds like you rely pretty heavily on technological tools. What’s your relationship like with the IT department?
It’s been a little bit of groping around in the dark. But we’re working together now, and the new connection looks something like this: I present our IT with some kind of problem and they provide the solution. IT departments suffer from an incomplete feedback loop. They push out all of these upgrades, and they have tools, but they’re not getting great feedback. And so it’s actually quite enjoyable, I think, when someone like me says, “I need a dashboard.” I’m not just getting the data, I’m telling them, “This is how I want to experience it.” So we get to work together on what you would consider a very creative project. From IT’s perspective, this is a big change.