The Gap: System and process errors disrupt shopping experience

As author of the Beyond IT Failures blog, I am no stranger to problems that cause endless hassle to consumers, although usually I describe situations that happen to others. Today, however, I can offer a first-hand account of system errors at clothing retailer, Gap Inc., which owns major brands Gap, Banana Republic, Old Navy, Piperlime, and Athleta.

The facts. Around Black Friday, Gap had a great sale, so I bought pants online; the fit wasn’t right, so I returned them to a local Gap retail store. The store took back the pants and an associate phoned in a replacement order. After a few days, an email informed me that one color was out of stock, and I received an email explaining the order was reduced accordingly.

When the new pants arrived, each was a different size, with none matching what I ordered. Every pair had the correct size label sewn in, but none matched the paper tag attached with a nylon cord. You can see this in the photo below.

I went back to my local Gap retailer, where the store manager apologized and, after jumping through some computer hoops, eventually refunded my money. Or so I thought.

A quick check of the receipt showed a three dollar discrepancy between the amount I paid and what the store refunded. After extensive checking, the manager reported back: the computer said I had already returned one of the pants. Obviously, this was incorrect.

The photo below shows the online order and associated return receipts. For reasons unknown, the online order was split into two transactions. Note the purchase amount ($95.92) does not match the total of the two return transactions ($92.32).

Despite making calls and having internal discussions, the manager was unable to correct the problem and I finally left in frustration.

POSSIBLE EXPLANATIONS

Three independent issues appeared to cause this situation:

1. Running out of stock on items that were ordered
2. Incorrect inventory tagging, since the paper slip attached to the pants did not match the item itself
3. Discrepancies between online and retail systems, because the retail store return transaction did not correspond to the online sales transaction

To learn more about such problems arise, I spoke with Paula Rosenblum, a well-known retail analyst with Retail Systems Research.

Regarding the tagging issue, Rosenblum explained that apparel manufacturing today is generally outsourced to countries such as China. The outsourcing manufacturer applies a tag at the factory during the production process. After manufacturing is complete, the retailer, in this case Gap, conducts a quality control inspection to ensure the item and tags are correct. Rosenblum explains: “Research shows that factory audits in retail are lacking due to cost. It looks like the factory made a mistake and Gap did not check.”

Rosemblum attributes the discrepancy between purchase price and refund price to the broad retail challenge of matching data across multiple channels:

All retailers struggle with the cross-channel dilemma, trying to synchronize systems online and in the physical store. Although they need to make the system easy for associates, consumers have no tolerance for mistakes and errors from the retailer.

Creating customer satisfaction involves a complex chain that includes product design, manufacturing, marketing, selling, and service. In this case, three parts of the chain broke down, creating a highly negative customer experience.

For Gap, this is not an isolated incident. Two years ago, I ran into similar problems, and said this:

The systems that collect, manage, and distribute this data to customers and internal employees are sufficiently complex to make IT success a strategic and competitive advantage for organizations that do it well. Conversely, by creating hassle for customers, IT failure can erode confidence and reduce buyers' willingness to engage and shop.

Oh, and they still owe me three bucks. Company officials did not respond to my request for comment.