Gap's Piperlime Problem: Online To Stores Isn't So Easy

Moving a brick-and-mortar retail chain online is a pretty well understood process at this point. Gap is now facing the opposite problem: how to turn its online-only Piperlime store into a brick-and-mortar business. The verdict so far: This isn't as easy as it was supposed to be.

The irony is that opening new store brands online is easy, once a chain has its E-Commerce presence up and running. Infrastructure can be shared, and the challenge is mainly making the new brand distinctive. But if anything, going the other way is actually harder than opening a completely new physical-store brand from scratch.

The problem for Gap is its Piperlime brand, which the $11.8 billion chain launched in 2006 as an online footwear retailer. Gap is now working to open at least one brick-and-mortar Piperlime store, the way it has with its Athleta athletic-clothing site-turned-into-chain. But when talking to analysts on May 17, Gap CEO Glenn K. Murphy said the process with Piperlime hasn't been straightforward.

"We're taking a little bit of the blueprint from Athleta. Now they're different businesses for sure," Murphy said. "Well, we've taken that blueprint for Piperlime and so it's tough. If we were standing right now in September in SoHo, I could articulate to you how that 4,500-square foot store is going to come across."

That may sound like merely a store-design problem. But in a merged-channel world, it's more than that. Going from bricks to online means a chain has to translate not just the overall design of a store to the site, but also the little personality details that aren't just a logo or color scheme. Customers expect Walmart's site to feel like Walmart and for to match what they expect of the Nordstrom experience. If it doesn't, the store and the site will feel like they don't belong together.

That's a challenge, even after more than a decade of retail translation to online. Much easier is launching a sub-brand that leverages the E-Commerce infrastructure to go after a slightly different customer. Almost anything is possible, because there's only one channel and no translation of an existing experience required.

But going from pure-play E-tail to physical stores is hardest of all. All the questions that never had to be answered online now must be addressed: What's the floor plan? How do the associates look and behave? How much merchandise? What type of POS arrangement? What about lighting? Loss-prevention arrangements? In-store technology? How much of the square footage is stockroom? How fast are shelves replenished? Are you offering customers Wi-Fi? Will their mobile phones work in the store?

A chain that started with stores can steal some of the answers from existing stores, but that's not a perfect answer.A chain that started with stores, then went online and spun off a specialty brand that it now wants to bring back to the physical world, can steal the answers to some of those questions from its existing stores. But that's not a perfect answer. The more generic a store looks and feels, the harder it is for customers to buy the idea that this is the same as the online experience.

A version of that problem has already burned Gap in the past. In 2008 it merged the backends of its four E-Commerce brands (at that time Gap, Banana Republic, Old Navy and Piperlime) and allowed customers to jump easily from one site to another using the same shopping cart. That ended up diluting the online presences of all four brands, and customer satisfaction with the sites actually dropped.

Now Gap is trying to use the clicks-to-bricks success of Athleta as a template for Piperlime, and the chain is a little more aware of the pitfalls. The design goal for the Athleta stores was to satisfy customers who "really wanted the opportunity to physically experience the brand and try that product on because it's so technical," Gap CEO Murphy said. "And the customers, they really love the online experience and were inspired from the catalog, they really wanted a physical manifestation of the brand."

That translated into store layouts that are designed for lots of special events, including a heavy schedule of workout classes and demonstrations at the dozen stores the chain currently has open. And that's obviously not a perfect model for Piperlime, which is intended to be a single showcase store focused on shoes, handbags and apparel.

And whatever design decisions are made for the Piperlime stores may change the personality of the brand—that, in turn, will have to be fed back into the E-Commerce site to keep the personality consistent. The bigger the difference between how the site and the store feel, the more complicated that realignment will have to be.

Yes, there's still a difference between channels, and there are still limits to what E-Commerce people have to worry about. But as brands move back and forth between stores and sites, you'd better expect those limits to get a lot more flexible. Those channels are getting closer all the time.