Can Social, Mobile Save the Gap & Make it Cool Again?

Gap (s gps) may be best known for selling a lot of khakis to an increasingly aging audience. But more and more, it’s staking its future marketing on social, mobile and local group-buying platforms to make it more relevant and hip with its customers. More than almost any other national brand, the Gap has been on the cutting edge with its marketing trials, working with Facebook, Groupon, Foursquare, Visa (s v), JiWire and others to figure out how to craft its image and its message for a much more social savvy and mobile audience. It’s still unclear how well the combined efforts are faring but this is where the company says it needs to be.

Trying to Be Relevant

“We’re trying to be relevant to millennials, 25-35,” Ryan Kennedy, a senior marketing manager at Gap told me. “They’re on Foursquare, Loopt, Facebook, Groupon; these are all new environments. It’s less about the deals we offer, but it’s about making sure we are top of mind with relevant things that are reaching millennial targets. I see us doing more and more of these going forward.”

Gap, like many retailers, is primarily interested in driving foot traffic into its stores, and so far it has used traditional marketing channels to do this. But increasingly, it’s getting visits from a parade of mobile, social and group-buying companies. Over the last year, Gap has been quick to jump on a number of trials and is increasingly looking at Facebook as its answer for outreach.

Testing All Options

Gap worked with location-based service Loopt last June to offer a 25 percent discount for users who checked in through Loopt Star, an offer program. It also launched a one-day 25-percent off deal with Foursquare in August, allowing people to redeem their discount by checking in. Twitter and Facebook users could also get the discount, but they had to either print out a coupon or produce a discount code.

Groupon last summer also worked with Gap on a popular offer for a $50 credit for members who paid $25, that resulted in 441,000 offers and more than $11 million, split between the two companies. At the time, Gap said the offer could bring in $30 million in total sales. That promotion showed off not only the power of Groupon but also how expensive it can be for retailers, who have to pay half the profits to the daily-deal service.

That didn’t deter Gap from trying other deals, including a well publicized promotion with budding Groupon rival Facebook. Gap gave away 10,000 pair of jeans across the country for people who checked-in through Facebook’s new Deals service. As my colleague Mathew pointed out, there was a lot of confusion around the Gap offer, with the unfamiliar check-in process and the shortage of jeans.

Kennedy said Gap is still very much in learning mode and is trying to understand what works and doesn’t. He said some of the problems early on have been trouble in tracking the redemption rates of certain promotions and tying discounts to a specific platform, which makes measuring efficacy a challenge.

“Our execution hasn’t been ideal in some cases, but our thing is to find the best way to test these platforms,” Kennedy said. “When it comes to the capabilities of speaking to a specific audience, talking to them through geo-fencing and mobile, it’s an opportunity that is just going to get bigger and bigger and we need to be a player in that.”

Targeting by Behavior, Location

Some of the Gap’s more recent efforts showcase how targeted it’s trying to be with consumers. It recently announced a deal with Visa to offer discounts and promotions via text message when users make certain transactions on their Visa card. Gap is able to work with Visa customers who opt in to the program. When these consumers make a purchase with their card, Gap may send them an offer tailored to the person’s shopping history, what time it is or how far they are from a nearby Gap store. Gap can even use the Visa transaction to offer up something complementary. You just bought a pair of jeans at a competitor’s store, so how about coming into Gap for a belt?

The retailer is also looking at targeting users by location. It ran a campaign late last year with local ad network JiWire to promote its 1969 line of jeans using JiWire’s Compass ad platform, which delivers rich media ads that are delivered according to a user’s location. Gap found that consumers spent an average of 62 seconds in the advertisement looking at a video and getting information about local Gap outlets. Kennedy said the click-through rate was three times what it normally sees online with banner ads.

“We definitely saw more engagement with the unit on mobile devices,” Kennedy said. “It’s rare for a customer to spend a minute with our ad unit.”

That’s the promise of the these new social, mobile and local products. They’re engaging users in very sticky ways and they’re hitting them where they are, in their social networks and on the mobile phones, which are always with them. Even as Gap still sorts out the long-term efficacy of these platforms, it’s these early results that keep the company interested.

Is Facebook the Answer?

Kennedy, however, said that the despite the proliferation of options, Gap is increasingly working with Facebook, which is well positioned to be an almost one-stop shop for brands and retailers. He said he sees a lot of different features migrating to Facebook. It’s also home to more than 1.4 million Gap fans, a relationship that the company hopes to expand on.

“I think as new opportunities arise outside of Facebook, Facebook has a way of taking it in and making it better and it has more scale than other newcomers,” said Kennedy.

I’m not convinced that Facebook has it all sewn up and I think there is a lot of room in this market. It’s not just big retailers like Gap but there’s a huge market for local merchants, who are looking to tap these new tools to drive traffic into their establishments. Gap, however, is showing that it’s not going to sit on the sidelines as others figure out what works. The company is actively testing each product to see what makes sense for its brand and its consumers. Maybe this is because the San Francisco-based company is down the street from many of these startups that are knocking on their door. Regardless, Gap is on the cutting edge here. It might not be producing big results yet or making the company cool overnight. But the experience is extremely beneficial and will help the company understand how to best use these new social, mobile and local tools to great effect as more people become familiar with them.