A Forrester report points out challenges faced by some business-to-business firms working online.
Broader selection in the U.S. and web expansion to 80 countries will drive e-commerce growth.
It’s already been an expansive year online for Gap Inc. with the retailer’s plans to go big internationally. Now Gap is counting on its European expansion and an earlier acquisition of Athleta to help the chain double its annual web sales to $2 billion by 2014 and use its web channel to generate $500 million in yearly operating income, the company says.
Gap, which last month launched dedicated e-commerce sites for U.K.-based customers of its Gap and Banana Republic apparel brands, expects to be up and running on the web in 10 Europeans nations by the end of the year.
“After crossing the $1 billion threshold in net sales in fiscal 2008, Gap is working to reach $2 billion in annual sales and $500 million in operating income by fiscal 2014,” Gap Inc. Direct President Toby Lenk told Wall Street analysts yesterday in New York at Gap’s annual investors day meeting. “This growth will come from a variety of sources.”
Gap now has an online presence in 80 countries and in 2011 Gap will launch web stores for its Gap, Banana Republic and Old Navy brands in Japan, Lenk told analysts.
To reach $2 billion in annual web sales within three years, up from 2009 web sales of $1.12 billion, the company will continue to grow overseas, leverage its investment in Athleta, an active apparel retailer Gap acquired for $150 million in September 2008, and add new lines of merchandise to PiperLime.com such as more apparel, exclusive collections and men’s fashion. “To gain market share in North America, the company plans to test another Athleta store next year and continue driving the growth of Piperlime,” says Lenk.
International expansion, particularly online, will fuel Gap’s growth over the next five years, CEO Glenn Murphy told analysts. “By fiscal 2013, international and online sales will account for more than a quarter of total net sales,” Murphy said. “Through its stores and online channels, including third-party partnerships, the company will be able to sell products to customers in more than 80 countries by the end of 2010, up from 25 at the start of this fiscal year.
In 2009, Internet Retailer calculates the web accounted for 8% of Gap’s total sales of $14.2 billion.
Gap is No. 23 in the Internet Retailer Top 500 Guide.