Gap Rolls Out One-Day ‘Name Your Price’ Offer Online

Casual apparel retailer has taken another step to re-engage customers, this time with an innovative adaptation of Web couponing that lets online shoppers negotiate for the price they’re willing to pay for a narrow range of inventory: in this case, men’s khakis.

The time-limited promotion, offered only on March 16, used Gap’s Facebook fan page and Twitter account to lead shoppers to a Web page, GapMyPrice.com.

Users at the site can click on a “Let’s make a deal!” button that takes them to the first of 18 product pages, offering khaki pants in a specific combination of fit, color and style. Each combination appears on its own page, and users can flip through the pages to find the specific item they want. Each page contains a product photo, a bare-bones product description, a suggested retail price for the item, and an invitation to “Make an offer?” by entering a price in a text box.

In most cases, the customer offer was met with a counter-offer from the Gap, for example matching a $30 buy offer for a pair of $49.50 khakis with a $35 sell counteroffer. The shopper could accept that offer or decline it, but no further counteroffer would be made.

If the shopper accepted, clicking a “Get coupon” button would lead to a uniquely coded coupon page. The shopper could either direct that coupon to an email box or click to print a .pdf version of the coupon. Eventually the coupon would have to be printed and presented in store to receive the negotiated sale price. Coupons received on March 16 would remain valid until March 31 and can’t be used at Gap Outlet or Gap Factory stores or online.

Visitors could then choose to share the news of their final rebate to their Facebook wall or Twitter account with a one-button click, sending an automate message to either network. For example, the Twitter share message read, “I just scored a sweet deal on Gap khakis! You can too. Say your price now at www.GapMyPrice.com.”

A “Winners” page scrolls through a listing of the deals already made in the promotion. That list indicates that the retailer was willing to accept lower bids for merchandise early in the day; for example, $35 could buy a coupon for a pair of straight leg casual khakis on the morning of March 16, but by 6 p.m. the price point was up to $40.

The Gap could not be reached for comment on the promotion, but the name-your-price tactic, run on a social-buying engine from Web startup Dealkat, seems designed give the chain more power to target and control discounts. If a customer comes back with a $37 offer on $50 pants, that could ease the pressure to run a 30% in-store rebate on all men’s pants across the board.

The format also adds an element of engaging game play to the promotion as users strive to hit the lowest possible point that would still be an acceptable bid.

While it’s likely that Gap will be analyzing the results of the promotion for some time, one likely drawback to the promotion is that it went out to users who were following the chain on Twitter or checking out its Facebook page. While research suggests that many people friend brands in social media precisely to score deals, those channels also often speak to a brand’s most loyal followers or advocates—some of whom might not need a rebate offer to be prompted to shop at the Gap.

“You’ve got a bunch of marketers who are so enamored of what’s happening online and in social networks that they mistake involvement for loyalty,” says Robert Passikoff, founder and president of brand consultancy Brand Keys, speaking of the “Name Your Price” promotion. “If all you’re looking to do is some level of involvement, then it’s a neat idea. But it’s not real engagement with the brand. Coupons, deals, alerts when the new styles come in—those are the easy answers. But if you rely on price to attract business, you’re only renting your customer.”

On the other hand, daily deal sites and “flash sale” sites offering deep discounts for online shoppers who can respond right away are expected to grow in popularity. A forecast this month by BIA/Kelsey predicts that sales on daily deal sites could reach $1.2 billion this year, up from $870 million in 2010, and might surpass $6 billion annually by 2015.

In any case, it seems likely the Gap will continue to investigate new ways to target rebates on its inventory. In fact, at the same time as the “Name Your Price” promotion was running, the Gap also offered a mobile coupon giving users $25 off an in-store purchase of at least $50. From March 10 through March 16, users who followed the Gap on Twitter were instructed to go to a Web site (no longer running) and enter their mobile phone numbers.

Besides building the Gap’s mobile database, the mobile promotion, run with mobile solution provider Vibes, added a new type of dynamic code into the coupon that made redemptions more minutely trackable. The expectation is that the Gap will be able to use that redemption information to learn more about how quickly mobile coupons are redeemed, by whom and for what purchases.

Last August the Gap ran the first national campaign on the Groupon social coupon platform, offering a daily deal of $25 for a coupon worth $50 in Gap merchandise. The offer was a notable success, selling more than 440,000 coupons for the day, and bring in gross revenue of $11 million for both Groupon and the Gap.

In a separate development, Gap CEO Glenn Murphy announced in a streamed video conference Wednesday that the chain will shutter 200 of its 900 global stores by 2013 and remodel the rest to give them a more contemporary feel, at the same time adding more high-end designer collections to its inventory.