Cutting back on marketing expenses is one tactic retail giant Gap used to help lift earnings up to 40%. Ad spending dropped almost 18% from the year-earlier with a $21 million reduction due to absence of TV spots. While earnings improved, sales showed signs of trouble amid an economic slowdown affecting the whole retail industry. Gap North America sales dropped 7% for the quarter to $976 million while Old Navy’s sales decreased 18% to $1.2 billion. At Banana Republic, sales decreased 4% to $538 million. How can a retailer such as Gap increase sales?

Consumer Desirable Goods

Cost controls can only go so far. In the end, retailers need to offer consumer’s attractive products to achieve sales growth. Does Gap have the clothes consumers want?

Customer Service

During an economic slowdown, retailers such as Gap need to focus on customer service. Store managers should train their employees to sell, sell, & sell. Customers should not leave the store with only one item in their bag.