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Gap's Old Navy Collaborates With Postmates to Boost Sales

Zacks Equity Research

The Gap, Inc.’s GPS Old Navy is leaving no stone unturned to make the most of the busiest holiday selling period. Recently, Old Navy has teamed up with Postmates to provide same-day free, on-demand delivery to shoppers during the holiday season.

Shoppers using the Old Navy’s Buy Online, Pickup In-Store capability will now enjoy the option of getting goods delivered from stores to their home, on demand. This collaboration allows customers to receive gifts at their doorstep.

Shoppers eligible for on-demand delivery can place orders on OldNavy.com. Customers will get notified once their order is ready for pickup, following which they can select the Postmates option to get the item delivered at their doorstep. Shoppers can also use this on-demand delivery for last-minute gifting, from Dec 21-23, free of cost. However, Postmates’ unlimited members can avail free delivery throughout the season.

We expect Old Navy to benefit from this collaboration and the increasing popularity of Postmates. Apparently, 'Postmate It' includes clothing orders that advanced 60% year over year on Postmates.

Gap’s powerhouse brand, Old Navy, which is focused on creating affordable high-quality fashion for the whole family, remains a significant long-term growth opportunity for the company. Currently, Gap remains confident about Old Navy’s growth potential, courtesy of better execution of its unique value equation and positioning, with style, fit, quality and price, all working in balance. Furthermore, the company remains focused on its growth brands, with more store openings for Athleta, Old Navy and Gap China locations.

Holiday season is a crucial time for retailers as it accounts for a sizeable chunk of yearly revenues and profits. Retailers try to attract customers with early-hour store openings, huge discounts and promotional strategies. Gap had earlier announced its plans to hire 5,000 seasonal workers for providing a great shopping experience to customers during the holiday season.

Notably, the aforesaid kind of partnership amid the busy holiday season minimizes hassles and in turn, boosts shopping experience of the customers. Also, the recent collaboration aims at efficiently catering to shoppers’ demands.

Price Performance & Zacks Rank

In the past three months, shares of Gap have lost 13.3% compared with the industry’s 0.7% decline. Gap currently has a Zacks Rank #5 (Strong Sell).

Stocks to Consider in the Same Space

Boot Barn Holdings, Inc. BOOT has an impressive long-term earnings growth rate of 17%. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Zumiez Inc. ZUMZ, which presently carries a Zacks Rank #1, has an expected long-term earnings growth rate of 12%.

Tilly's, Inc. TLYS, also a Zacks Rank #1 stock, has an expected long-term earnings growth rate of 11%.

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