Dive Brief:
- Gap Inc. increased supply chain productivity by nearly 30% compared with previous years ahead of the 2025 holiday season, CEO and President Richard Dickson said on the company’s fiscal Q3 earnings call.
- The boost was powered by the introduction of new artificial intelligence and automation capabilities across the company’s fulfillment network as well as improved inventory management, according to executives.
- “This enables us to meet peak demand with greater speed, agility and precision,” Dickson said.
Dive Insight:
Gap is entering what may be a challenging holiday season for some retailers and brand manufacturers with confidence built on technology investments and shrewd inventory management.
On the automation front, the company is using robotic unloaders and advanced storage and retrieval systems within its fulfillment centers, Dickson said. Gap has also rolled out new consumer-facing AI tools and applications across design, planning and operations ahead of the holidays, while partnering with Google Cloud to advance its overall technology strategy.
Beyond an improved technology suite, Gap has also focused on improving inventory management this year, according to CFO Katrina O’Connell, particularly in the lead-up to the holiday season. The company has specifically tightened its unit purchasing approach to ensure greater flexibility and responsiveness to shifts in consumer demand.
“Our disciplined inventory management resulted in slightly negative unit inventories, and we believe we ended the quarter with the right inventory composition,” O’Connell said.
Gap reported nearly $2.5 billion in inventory, as of Nov 1, per an earnings release. That was up 5% year over year, according to O’Connell, although she attributed the increase to higher costs related to tariffs.
“As we head into the holiday season, our supply chain continues to power strategic advantages,” Dickson said. “The scale of our global network across sourcing, logistics and fulfillment gives us the flexibility and resilience to operate with confidence.”