Gap, American Eagle Begin Offering Logistics Services

In an era where supply chain logjams have underlined the value of delivery speed, clothing retailers Gap and American Eagle are banking on their expertise in logistics to drive revenue.

The companies want other businesses — their competitors included — to take advantage of their distribution networks and warehouses, The Wall Street Journal (WSJ) reported Friday (Sept. 2),

But these retailers could have an uphill battle ahead of them, according to the report, which cited supply chain experts. Some customers might have concerns over data privacy. And these brands could be sacrificing a competitive advantage they’ve gained by running their own logistics operations.

“The customer fulfillment activities are so core to any retailer — any company, but a retailer in particular,” said Michael Dominy, vice president of supply chain research at research company Gartner, in the report, noting that “you’re delivering that customer experience. So, turning that over to somebody else is always challenging.”

Gap last month entered the logistics space with the debut of GPS Platform Services, while American Eagle launched its Quiet Platforms — born out of the acquisition of Quiet Logistics and AirTerra in 2021 — to offer fulfillment, logistics and transportation services to other brands, the report stated.

These launches come at a time when ideas about how to control logistics operations have become more crucial due to pandemic-fueled supply chain slowdowns, which have put inventories in limbo and led to lost sales.

As PYMNTS reported in May, the past year has seen retailers double down on the use of artificial intelligence (AI), robotics and advanced technologies to find savings amid soaring supply chain and logistical costs.

Read more: Retailers Seek New Supply Chain Efficiencies to Offset Soaring Diesel

“The need for accuracy and speed in the supply chain has never been more visible,” David Guggina, senior vice president of innovation and automation at Walmart U.S. said when the retailer announced its expanded use of its AI-driven, robotic warehouse automation pact with Symbotic.

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