Excellence

Meet Gap’s New CEO: The guy who doesn’t have a desk in his office

Highlighting the excellence from: BuzzFeed News; Sapna Maheshwari

grid-cell-8301-1416359404-21grid-cell-8301-1416359406-24In his first interview since being tapped as Gap Inc.’s new CEO, Art Peck tells BuzzFeed News the company is facing the biggest change in retail since the rush to the suburbs and rise of big-box stores in the 1950s and 60s.

Today, there are nearly 3,600 Gap, Banana Republic and Old Navy stores around the world, and Gap Inc. rakes in upwards of $16 billion in annual sales. More than three-quarters of that still comes from America, where it’s the country’s biggest specialty retailer, meaning it operates more of those mall stores outside of department stores than anyone else.

The company has made it so that you can spend a lifetime in Gap clothes: Get born and play in BabyGap and Gap Kids, and grow up and spend the weekends in regular Gap. Go to work in Banana Republic. Bring the whole family to Old Navy, and save some money at the outlets. Work out in Athleta. Go high-fashion in Intermix and Piperlime. You get the idea.

But American retail has undergone radical changes in the past decade, and Gap knows this better than anyone. It is heavily invested in shopping malls at a time when mall traffic is on the decline and internet sales are booming. It’s known for its denim in an era where, increasingly, women and men are walking around in stretchy leggings and jogger pants instead of jeans. Above all, it’s got a hell of a lot more competition.

Peck, however, is optimistic. He believes the smartphone and e-commerce are responsible for the retail industry’s most radical change since customers moved to suburbs and began shopping at big-box retailers like Target and Walmart in the 1950s and ’60s.

“The most exciting time to be in a business in terms of opportunity is when there’s disruption,” he told BuzzFeed News this week at Gap’s San Francisco headquarters, in his first sit-down since he was announced as CEO last month. “It’s the globalization of the industry in which we are one of the few truly global players, it is the collision of digital and physical that’s going on which is going to really redefine the whole customer experience… and then it’s the continued evolution of how we bring product to market.”

For all the excitement, Peck admits there’s quite a bit of uncharted territory ahead. “Visits to good malls are not down, but the number of store visits inside a mall are down, which says to me that people are planning their store visits as a function of their engagement with the brand, oftentimes expressed on a smartphone,” he says. “I would argue nobody’s figured out what exactly the aspirational, holistic, emotional expression of a brand like a Gap or a Banana Republic or an Old Navy looks like when it shows up on this device right now.”

Peck notes that the last couple of years have been spent “building the foundation for digital innovation and so now we’re at a place where we can start lighting these things up.” Gap has, by now, enabled Wi-Fi in more than 1,100 North American stores, where it has just under 2,700 locations overall. It rolled out Reserve-in-Store for all Gap and Banana Republic U.S. locations. It’s just starting to offer in-store ordering for delivery at 1,000 stores and has been testing a digital loyalty program at Banana Republic.

Peck says the new way to measure a retailer’s traffic is “footsteps across the lease line or unique visitors to our websites.” He added: “The numbers are going in a way where, very quickly, the majority of traffic will be digital as opposed to people walking into our stores.”

According to Liz Dunn, founder and CEO of retail consulting firm Talmage Advisors, it’s that kind of talk that has some in the industry considering Peck as more of a “visionary leader,” as opposed to the operations and team-building approach of outgoing CEO Murphy. He’s fascinated by the evolution of customer behavior, drawing ideas for Gap from how top museums are adapting to the digital age and experiences like a recent meal he ordered and paid for via tablet at a pho restaurant in San Francisco’s East Bay.

He tends to answer questions in the spoken equivalent of bullet points, perhaps a vestige from his management consulting days. He also has something of a Silicon Valley streak, with an office that contains a conference table but no desk.

“The desk, I think, is a residual symbol of power that I don’t feel is really useful in my workplace because it’s a way of putting a barrier between yourself and another person in a lot of respects,” he explains. “They also become places where stuff can collect on them. As you see, I really try to keep paper out of here. And so from that standpoint, I’m just not that into desks.”

To some, the core Gap brand could be doing better. While it accounts for less than 50% of the company’s sales, it’s the heart and soul of Gap Inc. and the barometer by which Wall Street measures the company.

Indeed, when asked what the core Gap brand stands for, Peck offered up three words: “It’s American, clearly, it’s optimistic, and it’s casual.”

“Where we take the brand globally, that is the soul of what the brand is,” he said. “And who, in whatever culture you’re in, doesn’t want to embrace the casual American optimism? It’s sort of, in a way, what this country, especially the West Coast, is all about. I think that’s what it is and what it will always be.”

Categories: Excellence

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