Business Case Report: Gap's Data Analytics and Sales Strategy

This business case report examines the challenges faced by Gap, a fashion apparel retailer, experiencing a decline in sales due to a lack of data analytics to identify customer trend patterns. The report explores the business problem, focusing on the shift in the retail industry and the impact of social networking on customer preferences. It analyzes the need for data analytics, the potential conflict between creative designers and data-driven insights, and the strategic decisions regarding online distribution. Alternatives such as developing Gap's own online distribution, combining creative designers with big data analytics, and the implications of these choices are discussed. The report highlights the importance of business and IT alignment, the use of data mining, predictive analysis, and the development of product strategies to address the identified problems. The report concludes with recommendations for Gap to enhance sales and adapt to evolving market trends.

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Table of Contents
Introduction................................................................................................................................3
1. The business problem.........................................................................................................3
2. Business and IT alignment.....................................................................................................4
3. Identify alternatives................................................................................................................6
4. Analysis the alternatives........................................................................................................7
5. Best Choice..........................................................................................................................11
6. Project plan.......................................................................................................................11
Conclusion................................................................................................................................12
References................................................................................................................................13

Introduction
Gaps is a fashion apparel shop which is currently facing a decline in the sales rate due to lack
of analytics measure that could identify trend patterns. As a result, there is a rise of decision
making that is taking place to integrate data analytics into the company. Data analytics is
necessary for the company but that will lead to the expulsion of other cost-creating elements
like creative designers, and it is a risky move for a company to take such a step. The study
focuses on the alternatives and the risk associated with such a move.
1. The business problem
The problem faced by Gaps regarding the analysis and understanding of the tastes and
preferences of the customers regarding fashion apparels. In the recent years, there has been a
major shift in the retail industry regarding several marketing trends and change in the trend of
human desire. In the recent periods, it has been identified that there are currently some
sweeping changes in the trends that are taking place due to the exposure of people with the
social networking sites. In the recent periods, customers are getting more informed about the
fashion trends, more varied and refined in their demands, and accordingly there has been a
rise in the demand for varied products in the market (Fernie and Sparks 2014). However, this
has created a major problem for the retail organizations as a whole. In the retail sectors, the
business has created the problem of understanding the changes in the demands of the
customers. Due to this problem, Gap has faced a decline in their sales, which they have
considered to be the result of the same problem. As a result, the company wishes to expand it
analytic sector into the internet, and through the help of data mining, it could create a
predictive analysis and gauge the rising trends of the customers (Nawaz, Salman and Ashiq
2015). For this purpose, Gap is attempting to expand their technical line-up to include such
analytical techniques in their area. However, there is a major issue to address in this case:
whether the prediction of a creative designer could be outperformed by predictive analysis
made by the data analytics? This is a genuine which Gap might choose to address by
combining to the two forces, as the innovation of a creative designer would help in the trend
setting of a specific fashion statement which would not be possible by the Analytics area. The
entire senior management, however, is facing a doubt regarding this case, as it brings up the
disturbance in the general harmonious relationship that exists between creativity and
commercialisation, designers and merchants that exist at most fashion brands (He and
McAuley 2016).

Gap also faces a problem regarding the medium through which it would like to interact or set
up deals with the customers or others in general. In this case, taking into consideration the
recent rise in online e-commerce transactions, Gap needs to change their selling model and
upload their products online. However, for the achievement of this process, the company
needs to put their product under Amazon and for that reason, there will be a middleman
between the organization and the final customers (Lueg, Pedersenand Clemmensen2015).
There is a problem posed in this case, as in that the customer information would not come to
the company who would require it for the data analysis part, but would rather stay with
Amazon, a third party, and hence, would have no help to the company to set up the predictive
analysis part. Hence, for the main aim of Gap, regarding setting up of an analytical part in the
organization to help in the trend setting would become in vain if the company hosts a certain
product in the online platform of someone else.
2. Business and IT alignment
In the case of this specific area of integrating the business with the IT section of analysis,
there is a certain amount of investment that the company has put into to bring about this
major change in the system. However, for this purpose, there has to be a department to be set
up which actually deals with all the specific aspects that are related to the organization or the
trend analysis of all the masses that are involved with the organization (Ott and Longnecker
2015). In general, the company has invested and set up an analytics section and has put
forward certain radical changes in the organization so as to cut costs, and they have done
these changes in a manner so that they would be able to eliminate traditional creative
designers and using other resources, the company wishes to enlarge and create a collective
ecosystem, a kind of a digital field that will help in the increase of the input of data which
requires to be analysed and creating such a situation conducive for data intake and data
analysis. The main points that the company wishes to take part in are:
 Data Mining: Data mining is a way in which certain non-personal data are collected
by the company and with the use of these data, there is a major analysis done on the
collected data. The data used in this case is generally customer choices, links clicked
or visited, websites, frequented, etc., all of which one to understand customer
behaviour and to see a general way in which the trends and general customer needs
are moving towards (Guerciniand Runfola2015). This is generally done through
Google Analytics as Google is one of the most popular website and it is through this

data collected by google that one can make a use of the same to measure customer
likings and behaviour.
 Analysis of own data: Gap has its own database in which the company can in general
store different kinds of data about customers and their preferences and by the use the
same to create a general trend analysis by making sure how the company could select
the next season’s assortment. By the selection of the specific data, the company can
create a general list of the customer preferences and in that manner, the customer can
make sure that they could retain the customer base that they already have and do not
lose any in the midst of the change.
 Predictive Analysis: Once all the different kinds of data has been collated by the
organization, it requires to pass the same data through some kind of predictive
analysis and in that manner, create a prediction of how the trend is going to go
forward and change in the midst of it. There is a necessity for the measurements to be
conducted in this area, through the analysis of the data used, the predictions could be
conducted. It is through the predictive analysis made by the company on the basis of
the analysis of bigdata collection, that there could be a proper of identification of
change in trend or trend spotting and would help the company to prepare for the same.
 Development of alternate online distribution: It is possible for the organization to
create online distribution channels, or to use existing online distribution channels to
expand the reach of the products (Choiand Cheng 2015). As of now, Gap is facing a
decline in sales, and so there would be problem with profit since the company must
expend some amount in the different aspects of marketing. But if the company
chooses to develop different online distribution areas, then it will possible for the
company to reach out, diversify sales, and also, identify different trends processes.
 Product development strategy: Once the company has identified certain trends and
can use it to create certain predictive analysis, it is important for it to start on
development of the product that is demanded by the customers. By starting to work on
specific products, there is a possibility for the company to bring it out and create a
trend that will boost specific and unique sales of the company (Moser2015).
The problem that the company is facing is whether it would be wise to discard the creative
designer in place of the trend analytics, which would have the problem of deleting any form
of innovation from the market. There is also, a problem regarding the online distribution
selection which the company requires to do, in this specific area. The company however,

have already begun to integrate the process of collecting bigdata and analysis and the
discarding the creative designers, and using those resources in a manner to pile up on this
area trend analysis and prediction.
3. Identify alternatives
Since the company is facing a problem in these areas, it is necessary that the company finds
some form of solution in this area so that they could bring about certain changes in their
strategies and by the use of those changes, there could be a proper way in which the
organization could be made to boost the sales of the products (Yandell 2017). Regarding this
area, the company can also choose to not do anything, but wait for the sales to rise
automatically, but since the company is behind times regarding the different analytical
procedures, it would be necessary for it to go for the different alternatives in this area. Some
of the different ways in which the company can choose to go for the boosting of their sales in
the current business industry, that is, of fashion apparel are:
 Own Online Distribution: Since the company has to focus on both the expansion of
sales through online distribution and the collection of big data to identify and predict
change, it would be best of the company to create their own online distribution portal
which they can use to expand the reach of their products. As mentioned by the senior
management, using a third party for the online distribution of products would result in
the data being stored in the storage system of the online third party. As a result, the
main other function of the company, that is to grow along the lines of the changing
trends of the masses and customers becomes in vain and remains out of focus. This
would help the company to grow and though it might boost the sales due to increase
in product reach, it will not be possible for the company to acquire data and to grow
with the trend planning (Schabenberger and Gotway 2017). Hence, this kind of
problem could be avoided if the company has its own online distribution portal
wherein, the different information could be fed into and used by the company for the
different kinds of analytic procedures necessary for the same.
 Combining creative designer and the bigdata analytics for identifying and
creating trends: It would be unusually reductive decision on the company’s part if
they choose to eliminate the entire creative designer section of an organization as a
replacement to the trend setting. It is necessary for a fashion apparel industry to create
innovation and to release the innovations into the market to create a trend. It should
run concurrently with the aspects of making products which should already fit the

running trends on the masses. Hence, for the purpose to serve both the trend setting
part and the trend following part, the company must try to handle both in a manner
that will help them boost sales through innovative products (Assunçãoet al. 2015). For
this purpose, it would be necessary for the company to combine the creative designer
section with that of the bigdata analytics part so that by doing so, the designer could
take the cues from the different ways in which the customer trends are moving, and
using those specific information, the designer could also bring about certain changes
in their design process. The bigdata should be such that it should complement the
designing process and would help the designer to work through it and come up with
new innovative ideas and designs which could be used to create a boost in the sales,
not out of trend conformation, but rather out of innovation (Schultz2016). Similarly,
the data analytics could use their measurements to help the designer in the designing
process and through that way, it could be possible for them to learn how the
innovative products are faring in the market. Therefore, there should be a
complementary relationship between the two.
 Globalization: While diversification process is possible for a company online, it
remains limited to the geographical boundaries of the headquarters country of the
company. Since, Gap happens to be a famous company, it could diversify their market
physically by entering into foreign markets. In this way, it could have a major cost in
the entry of the different area, but such costs will be turned into profits in the long run
(Monroe et al. 2015). Also, the recent stock collection due to the decline in sales
could be sold off to the people in the different other countries. For the diversification
process to be properly created, there will be a need to ensure the presence of the
company in the area. There will be a trend-setting procedure in this case, and since, it
will be solely relying on trend setting there would not be a need to increase any part
on the data analytics sector but rather to rely more on normal survey and the creative
designers’ abilities to create the proper goods, by using innovative design, and hence
creating a general trend toward this area (Jacobs, Chase and Lummus, R.R., 2014).
Now, for the purpose of this kind of step, globalization could not happen all of a
sudden. There has to be a creation of a demand in the host country so that one could
create a smooth entry for the company. As a result, the preliminary step should be the
transfer of present product into the different other countries to create an identity in
that area and for this reason, there will be a boost in the profits due to stock clearance,
there could be a general understanding of the trends of other areas, and a general

diversification of sales reach would help in boosting sales (Beheshti-Kashiet al.
2015).
4. Analysis the alternatives
• Feasibility: The above alternatives have certain feasibility attached to it but the feasibility
attached in on a different level. They also have certain costs, so there needs to be a
calculation of the feasibility in comparison to the costs and thereafter, there could be a certain
amount of way to find in this area.For the release of the companies own internet portal which
they could use for the selling of their products online and thereafter be capable of collecting
different sorts of data from individuals about the shopping habits and trends, it is much more
feasible to build something rather than to use a third-party portal for the same purpose.
However, it is clear that there will be certain costs attached to it (Blázquez 2014). The second
alternative of combining creative design and data analytics would be most feasible in terms of
the fashion industry as it would help the organization to tackle both the innovative side of the
affair and the analytics part (Hammer, 2015). The third alternative however, would be
feasible in the long run only, but it will have a major cost drain in the current period. The
feasibility of the third alternative of globalization depends on many different factors
including the future effects and so, there is a chance that it may not become feasible at all in
the end.
 Benefits: On the basis of feasibility, it is necessary to look at the different benefits
that each kind of alternatives offers. The first alternative has the benefit of being more
capable of providing a secured platform or channel for the company to deliver
products and to get filled with different kinds of information. The second alternative
is also beneficial because it provides the company with two different aspects of the
fashion industry which it needs to follow to survive – one being release of creative
designs and the other being the continuation of serving the existing trend needs of the
people (Van Der Aalst, et al., 2016). The benefits of diversification and globalization
has the mark of expansion and creation of a global identity for the company as well,
yet there needs to be a comparison made in this case, in relation to the amount of costs
which is required to attain this benefit (Scholes, 2015).
 Costs: There are different kinds of costs that shall occur in this case when the
organization is trying to establish the different kinds of ways to distribute products or
collect information or to make an identity. There are web costs, and technical
operating costs that shall come up when the organization is trying to establish an

online identity. There will be technicians employed to look after the matter, and
marketing costs as well, which would result in being recurring costs for the
organization. In the case of the second alternative, there would be a major capital
costs which would be necessary to integrate the data analysis part of the organization
with that of the creative design (Olson. and Wu, 2017). There will be recurring costs
in this case which would be due to the payment to technical analysts and designers.
The capital costs should also include the entire structural change in the organization
which integrate technological data mining into the system, and there would be
contractual prices with Google and other data mining applications. The last one will
have a major cost drain as there would be complete shift of the company into the
global area. It would be transformed into an MNC and there would be requirement of
country based license fee, localization based collection and distribution of fees and
other such aspects in the area of the organization to create proper diversification
process (Rosemann and vom Brocke, 2015).
 Risks:It is necessary to create a risk log for all the alternatives to find out whether any
one of them is suitable in terms of the risk that the alternative entails. The first
alternative entails the risk of loss of personal information, change in the system and
hence there will be a problem regarding change management, and the security
features failures in the matter (Schivinskiand Dabrowski 2016). For the second one,
there will a problem regarding the change management system, and also, regarding
training and facilities to create an integration process in the organization for the
benefit of the groups. The third alternative has the most risk because it will create a
change in the structure thus will be related to change management, it will have an
immense cost associated with it which will have the risk of returns and there is no
surety about the demand formation (Poon, Lam and Moon 2017). These can be
represented in the risk log and risk matrix in the following manner.

From the above risk log, some of
the following factors should be
seen and undertaken
which are:
1. Problems with
Integration:
This has a low problem
can could be tackled with
proper training.
2. Problems with
information
collection: This
is a medium problem
with low impact and IT
based and could be
solved by technicians.
3. Loss of information:
This is a major problem since it will affect the goodwill of the company and should be
solved by security analysts (Diamond, Diamond and Litt2015).
4. Change Management system: Since there will be some major changes in the system,
there is need for change management system initiated by the management for smooth
transitioning.
5. System Failure: This kind of problem could occur when there is a complete system
failure and to remove this problem there would be a need for network analysts
6. Loss on Returns: Since all these cases have some costs, there is the problem of
financial costs wherein there could be losses on the investments made.
Impact
Low Med High
PI=3
Cat: 3=
Problems
related to
taking
information
PI=5
Cat:2
Problems
related to
demand
formation
PI=6
Cat:1 –
Change
Management
System
Lack of
returns on
investment
PI=2
Cat:4
Training
facilities
risks
PI=4
Cat:3
Failure of
security
features
PI=5
Cat:2=
Loss of
personal
information
PI=1
Cat:4
Problems
related to
integration
PI=2
Cat:4
Risks
attached to
system
setups
PI=3
Cat:3 =
System
Failure
Probability
Low Medium High

5. Best Choice
Among all the different kinds of alternatives that have been used in this case, the best
alternative that could be used would be the second alternative, that is, the alternative where
there can be a combination of creative design and big data analysis (Porter and Kramer,
2019). This could be chosen as the best alternative since it has a good feasibility in its respect
and it has the ability to cater to both the specific points where the company is facing a
difficulty. It is in line with the different fashion trends wherein there is a need to be both a
creative trend setter and the trend follower and the customers could be both satisfied and the
company will be able to make their own signature in their line of work (Jordan and Mitchell
2015). This would give the company a major competitive edge and will help to establish an
individual identity of the company among the masses. Also, there is already a plan for the
company to establish a data analytics part, and the creative design section is present, so there
would not be much requirement regarding whole structural changes in this case. While there
will be recurring costs, the initial costs for the integration process will be low and hence, it
will help in an easy transition into the new way of the company (Caroand Martínez-de-
Albéniz 2015).
6. Project plan
To initiate the alternate that has been chosen, the following project plan should be
considered:
Deliverables: In this case, the outcome of the project will be the complete integration of
creative design process and analytics and this could be understood through:
 Successful implementation of change management process
 Performance measures
Timing: The plan should have a timing to each of the processes and this timing should be
supplemented with a Work Breakdown Schedule. The following should be considered:
 Timing of each sub projects
 The total timing
 Limited flexibility in timing
It is better to complete integration with 1 and half years.
Costs: Decisions regarding costs should be made by the management and there should be
budget prepared which will help in the management of the finances put into the project.

Milestone: Each part of the project should carry a certain milestone compared with the
project aim and the timeline along which such an aim is fulfilled. For the purpose of this case,
the milestones should be understood and fulfilled on the basis of a Gantt Chart which will
help in the measurement of the same (Schön, 2017).
Risks and Mitigation: As has been studied before, there will be risks attached to the plan
and this risk would include different financial and other risks and to tackle the same, there
should be a way in which the risk management should be conducted, along with risk
identification and risk mitigation processes (Doppelt, 2017).
Conclusion
Hence from the study it is clear that there is a need for a business plan in this respect. Once
the business aligns itself with the IT conditions of a company, it is necessary to identify and
associate different kinds of alternatives in this area for the company to grow and adopt. The
analysis of the alternatives has shown the company to have certain benefits and feasibility but
each alternative has a risk attached to it. Out of those alternatives, the integration seems to be
the best option and accordingly a high-level project plan has been drawn up to implement it
successfully.

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