Gap Inc. Exec on New Platform Services Offering

Gap Inc. FC in Fishkill, NY feature

Gap Inc. fulfillment center in Fishkill, NY, after renovation from a devastating 2016 fire

Last month, Gap Inc. launched its own fulfillment services platform, making the high-tech, automated network it has invested billions in available for other retailers to take advantage of as the in-house/outsourced services trend continues.

GPS Platform Services covers short-term storage, B2B and DTC fulfillment, returns processing and the post-purchase experience. Gap Inc. says it includes two-day and next-day shipping and cross-border ecommerce, while providing self-service API hooks into platforms including Amazon and Shopify.

In addition to fulfillment, Gap’s offering includes GPS Media, an advertising business leveraging its  digital capabilities and consumer insights to connect brands and customers with relevant offers, and GPS Apparel, using its design and sourcing expertise to build custom uniforms and logo-based apparel.

“These new businesses are leveraging our existing, scaled platforms to diversify into more B2B opportunities and generate new revenue streams for Gap Inc.,” said a company spokesperson.

Some early success of GPS would be welcome news to Gap. The company reported a tough second quarter last month that included a withdrawn fiscal 2022 outlook, and this week learned apparel brand partner Kanye West, who apparently goes by the moniker Ye, wants to part ways down the road.

With competitor American Eagle Outfitters’ Quiet Logistics division getting a lot of attention on the fulfillment outsourcing front, we were curious to learn more. Kevin Kuntz, SVP of Global Logistics Fulfillment at Gap Inc., provides some further details about the initiative.

MCM: There seems to be a “moment” now for retailers with the right fulfillment and logistics assets to pursue an outsourcing model, obviously yourselves and AEO, but others as well. In Gap’s case, what was the business rationale? Is it an opportunity to monetize excess capacity?

Kevin Kuntz: As part of our Power Plan strategy, Gap Inc. established the Strategic Growth Office (SGO) to fuel growth and accelerate new capabilities across our portfolio of brands. GPS Platform is a project incubated by the SGO, providing solutions to meet the needs of DTC and B2B companies across the value chain. This includes media network, uniform and promotional apparel, and full supply chain services. GPS Platform Services drives growth and diversification for Gap by leveraging our supply chain network, technical and digital capabilities and customer insights. It is early stages, but we are excited about its prospects.

MCM: When did GPS Platform Services go live, in terms of market availability?

Kevin Kuntz: GPS Platform Services soft-launched through referrals earlier this year and we started marketing in August.

MCM: What can you tell us about interest and/or adoption thus far, and from what kinds of places? What aspects of the suite of offerings are drawing the most attention?

Kevin Kuntz: We can’t share details, but we are pleased with the response to our B2B services and are already working with a mix of brands ranging from small to Fortune 500.

MCM: Is there a dedicated team and/or assets? Is the entire network available to leverage?

Kevin Kuntz: GPS Platform leverages open capacity within our distribution centers and we will be planning into the work to service outside brands and businesses such that there will be no change in capacity and service levels to Gap Inc.’s core brands.

MCM: How do you external vs. internal order flow? Is there any concern about sufficient capacity to handle both?

Kevin Kuntz: We have built plenty of mechanical capacity within our network with the buildouts we have done. We are only selling our excess capacity with a high buffer built in. As we land customers, we will need to ramp up hiring to support the new accounts. Our labor needs will be much lower than a traditional network with the automation suite that we are running.