Meanwhile, PayPal acquires mobile payments firm Paydient.
Availability of Gap Inc.`s web sites was spotty for two weeks as the No. 1 apparel retailer on the web made massive changes to all three. "We are laying the groundwork for the future as well. It is a complete soup-to-nuts overhaul," a spokeswoman says.
The buzz of the online retailing world at the end of the summer was "What’s up with The Gap’s web site?"
All three of Gap’s sites-Gap.com, OldNavy.com and BananaRepublic.com-went down Aug. 24 for improvements before the holiday shopping season. The next two weeks were up and down for the sites until they were back online around the clock Sept. 7.
Even when they were back up, however, they still weren’t fully functional. "We are throttling the traffic on Gap and Old Navy, meaning we are letting a set number of customers onto each of the web sites," a spokeswoman says. "This will help us gain valuable learnings while providing a solid and improving experience over the interim. I don’t have an exact day when we think we’ll be there 100%."
The outage was unusual in that it affected all three sites for most of two weeks. The Gap’s web sites are responsible for sales of nearly $10 million a week.
Gap would not comment on whether the two-week outage was intentional.
The challenge, the Gap says, was in the scope of the re-launch. "This is not just a new web site with a few enhancements-this is a whole new way for us to do business," the spokeswoman says. "We are laying the groundwork for the future as well. It is a complete soup-to-nuts overhaul."
She adds that Gap rebuilt
-- Product content management
-- Marketing content management
-- Promotions and pricing management
-- Core e-commerce and web-site
-- Order management
-- Inventory management
-- Customer contact management
-- Fraud management
-- Reporting and analytics management
"If you are just changing a web site interface, it’s possible to have two parallel sites running," she says. "But when you have more than 10 other systems to change out as well, it’s really hard and expensive. Running parallel sites would have required wasted expenditures."
In spite of the length of outage, analysts don’t expect long-term detriment to the brands. "There won’t be any long-term fallout because they have very good customer loyalty," says Robert Antall, CEO of LakeWest Group LLC, a Cleveland retail industry consulting firm. "But they are losing money on the web now and that’s not a good thing."
The timing was particularly bad, analysts note, because it came in the middle of the back-to-school shopping period. "They definitely lost a lot of potential impulse buyers who just clicked elsewhere," says Lauren Freedman, president of Chicago-based consultants The E-Tailing Group Inc.
While it’s difficult for any major retailing site to go offline for an extended period of time and forgo sales, Gap says late August was the best time to implement site upgrades before the holiday shopping season. "There is never an ideal time," the spokesman says.
Gap reports that for the second quarter of its fiscal year, online sales reached $107 million, including $40 million for Gap.com, $52 million for Old Navy.com and $15 million for BananaRepublic.com. In the second quarter of 2004, total web sales were $106 million, including $43 million for Gap.com, $46 million for OldNavy.com and $17 million for BananaRepublic.com.