You could forgive Old Navy for trying new things. After all, The Gap Inc. (GPS) - Get Free Report, the brand's parent company, is a hot mess right now. Sales are down, profit margins are dissipating, and the apparel retailer still has no permanent CEO since the last one stepped down nearly a year ago.
But Old Navy's latest promotional stunt is a kind of head scratcher. On Monday, June 26 and Thursday, June 29, the brand is giving away free $50 gas cards at select RaceTrac stores in Orlando, Atlanta, Dallas, Nashville, and New Orleans.
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The giveaway is timed to busy travel periods for the Fourth of July weekend.
Everyone loves free gas, especially during a time when inflation has drained Americans' purchasing power. But what exactly does Old Navy have to do with gas?
"As an iconic American family brand, Old Navy aims to aid families traveling for Independence Day, making it easier to hit the open road to celebrate the nation's birthday," the press release said.
Promotions normally try to get consumers to perform a specific action, like sign up for a loyalty program, visit a store, or buy certain items. But other than invoking patriotism, Old Navy's effort seems rather vague and aimless.
Since energy prices started to soar following Russia's invasion of Ukraine last year, companies have dangled the prospect of cheaper gas to connect with consumers.
For example, big box retailers like Walmart Stores Inc (WMT) - Get Free Report, Costco Wholesale Corporation (COST) - Get Free Report, and BJ's Wholesale Club Holdings (BJ) - Get Free Report, offered gas discounts for consumers who belong to their membership programs. And Advance Auto Parts last year launched its Speed Perks Gas Rewards, which lets new members save 25 cents per gallon on their first fill-up at Shell gas stations.
Notice how all of these retailers either directly sell gas or offer products related to automobiles. Old Navy does neither of those things: it sells t-shirts, shorts and sandals.
And even if consumers get the sudden urge to buy Old Navy clothes because of the gas card, where will they do it? Like most gas stations, RaceTrac sells food and grocery items.
So consumers will either purchase something on their mobile devices or wait until they eventually find a mall to express their loyalty to Old Navy? Seems like a stretch.
The brand could use all of the sales it can get. In the first quarter, overall. sales actually fell 1% to $1.8 billion and comparable sales declined 1%. And Old Navy was actually Gap's best performing brand that period.