Gap has pulled an ad image that some found racially insensitive.
Photograph by Justin Sullivan — Getty Images
By Benjamin Snyder
March 23, 2015

New Gap CEO Art Peck wants to make it clear that he’s willing to be innovative to boost his company’s sales, saying in a recent interview that he’s embracing technology like radio-tagged clothing and even the possibility of a vending machine that dispenses clothing.

In an interview with Fast Company, Peck, 59, highlighted Gap’s aim to use technology in what he’s dubbed “Retail 3.0,” or a strategy in which mobile phone use leads the way in shopping. The magazine reports that Peck shrank Gap’s physical U.S. footprint by closing 225 locations “in malls where real estate wasn’t productive.” That’s because he wants mobile to reign supreme.

“I would like to be able to articulate a nice linear path as to what our stores are going to evolve to,” he said in the interview. “But I think it’s going to be a lot messier than that.”

To meet those ambitious plans, Peck said he has developers in Silicon Valley using customer and salesperson feedback to create codes.

“I think that kind of rapid prototyping—typical in a lot of other industries, not so typical in ours—will be critical for figuring out this collision of physical and digital,” Peck said in the interview. “We’ve been doing business the same way for 40 years, and there are very few 40-year-old business models that are successful forever.”

The company is also trying out new showroom formats and mobile registers, among other changes to the stores’ current offerings.

Along with its namesake store, Gap owns Banana Republic and Old Navy. The company has had a rocky few years in terms of sales, with dropping figures at North American locations from 2006 to 2010. In February, the company posted fourth-quarter earnings in February that saw sales rise 3% to $4.71 billion. Old Navy stores saw an 11% increase in sales, while Gap declined by 6%. Banana Republic saw sales rise by 1%.

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