APPAREL

Gap Inc.'s Done Slipping on Banana Republic's Peel

Three consecutive quarters of declining sales have confirmed Banana Republic isn’t a mall must-visit. But parent company Gap Inc. thinks there’s hope yet for this mid-priced anarchist state to become a stable republic. 

But first, it took a hard look in the dressing room mirror. “Banana Republic has historically been known as a skinny brand,” Gap CEO Art Peck told Bloomberg this week.

That Regina George merchandising strategy hasn’t aged well, so Banana Republic is joining the fashion democracy by... 

• Expanding its women’s size assortment up to size 26. Currently, it offers up to size 16 in stores and size 20 in some styles online.  
• Offering a more expansive range of skin-toned bodysuits and shoes. A company spokesperson said its “True Hues” basics line with more colors exceeded sales expectations "by double digits" after its launch last spring. 
• Giving customers the option to try before they buy. In August, Banana Republic became the first Gap brand to debut clothing rental.

The pressure’s on across Gap brands

Banana Republic’s new strategy is unfolding in the shadow of Gap's continental drift. Old Navy, the most lucrative label in Gap’s portfolio, is currently orchestrating its spin-off into a separate company. Old Navy’s annual revenue is $8 billion; the rest of Gap’s brands bring in $9 billion together. Gap shares have declined about 30% this year.

Without Old Navy to prop up its sales, Gap’s applying new strategies across its labels. First up: It’s franchising its activewear brand, Athleta, and Janie and Jack, the children’s brand it acquired in March, outside of the U.S. 

Beyond Gap...declining sales have forced other companies to consider an inclusive rebrand. See: Retail Brew regular Victoria’s Secret.  

My takeaway: To recreate the halcyon days of the 1990s and early 2000s, Gap is using Old Navy’s strategies across its remaining brands. But with similar styles and wider size ranges already available at other retailers, Banana Republic’s rebrand might not look that distinct.

E-COMM

All the Tea That's Fit to Print

What Instagram giveth, Instagram taketh away—if you’re a Juvéderm-filled influencer. Instagram announced Wednesday that it will start blocking, and in some cases deleting, content promoting diet products and some cosmetic procedures.

The details: Instagram will remove posts that make dramatic weight loss claims or offer incentives for weight loss products. It’ll also block users under the age of 18 from viewing diet products. 

The backstory: Instagram’s 1 billion monthly active users have likely seen a Kardashian or two promoting Fit Tea. Diet shake #partners are a running joke in media circles, but activists have said influencer content can harm young users’ self-esteem. 

In a 2017 study, Instagram was ranked the worst app for U.K. 4–24-year-olds' mental health. By removing discount codes for Flat Tummy Shakes and lip fillers, Instagram’s hoping to lessen the pressure users may feel to change their appearance. 

Zoom out: Other social media platforms are taking an active approach to moderating what they consider harmful content. Last month, Pinterest tightened its search algorithm for terms relating to vaccines to ensure that false information and shady health products wouldn’t reach users.

D2C

Casper's Catching Some CBZzz's

The last time I wrote about a retailer’s foray into CBD, it involved a mall brand’s plot to attract teens. This time, a mattress giant is trying to attract parents losing sleep over those teens. 

Casper, best known for delivering mattresses by snail mail, is partnering with edibles company Plus on a line of sleep-enhancing CBD gummies. Casper’s $35 packs of 14 gummies employ a melatonin-CBD mix to encourage deep R&R. Or, that’s what it says its gummies do: The FDA hasn’t signed off on CBD’s health benefits just yet.

CB Insights reports that the sleep-wellness market (encompassing sheets, pillows, and accessories) will reach $85 billion by 2024—and CBD gummies are Casper’s latest ploy to become “the Nike of sleep.” Casper has also started selling bedside lamps, sheets, and pillows, and has formed sleep wellness advisory groups.

But Casper still isn’t profitable. And it’s got a ways to go to catch up with longtime industry leaders. Casper’s annual revenue in 2018 was over $400 million. But legacy mattress brand and Casper competitor Tempur Sealy recorded $2.7 billion in revenue last year on mattresses alone.

POS

Swipe Right, the Old Fashioned Way

What do Sally Beauty and Walmart have in common, aside from nationwide residency in America’s strip malls? Cold, hard, shiny plastic. 

For beauty fanatics: Sally Beauty struck a deal with Alliance Data to launch its first credit card in Q2 of fiscal 2020. Its free customer rewards program currently has over 15 million active members. 

For everyone else: Walmart debuted two Capital One cards. After an introductory offer, both provide 2% back on Walmart purchases; one offers 1% back on all outside purchases.

Why they want you to swipe: Retailers often use credit incentives as a customer loyalty play, and both Sally Beauty and Walmart execs have said they’ll offer exclusive rewards for credit card program members.

But one cash back purchase now can turn into heavy debt later. Store credit cards have been accused of preying on consumers with low credit scores and high delinquency rates. 

+ While we’re here: Amazon has gone retro with its payment options. In an agreement with Western Union, Amazon customers can now pay cash for their orders at Western Union locations.