What: The retailer is designing a delivery fulfilment system based on customer loyalty.

Why is it important: Prioritizing most valuable customers could be a way to manage fulfilment costs.

Under the system, delivery speeds will be tiered as gold, silver and bronze, to "manage fulfilment costs effectively while pleasing our most valuable lifetime value customers," said CEO Sonia Syngal.

As the pandemic shifted shopping from in store to online, retailers have had to figure out how to meet demand and implement processes to best fulfil online orders. With Gap's online sales reaching over USD 6 billion last year — a 54% YoY growth — company leaders said that leaning on its "powerful omni-channel platform" is the reason they've done so well with e-commerce.

The retailer listed elevated airfreight expenses as a factor, with total distribution fulfilment costs at roughly USD 40 million for 2020. The company expects roughly USD 800 million in capital expenditures for 2021, including investments in digital, its customer loyalty program and increasing distribution centre capacity for online.

Gap designs fulfillment system to prioritize 'most valuable' customers