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SCOTT GALLOWAY NYU Stern Sportswear EXceRPT from the 2012 Digital IQ Index®: Sportswear To access the full report, contact [email protected] September 20, 2012 SCOTT GALLOWAY NYU Stern Sportswear © L2 2012 L2ThinkTank.com REPRODUCTIONS PROHIBITED Inquire about your brand’s ranking. Contact us. EXceRPT from the 2012 Digital IQ Index®: Sportswear To access the full report, contact [email protected] The End of the Beginning Once peripheral, e-commerce, digital marketing, and mobile are moving to the core of sportswear brands’ growth strategy and garnering more capital (financial and creative). Brands from Apple to Cartier to adidas and Converse share one strategy: increasing share of sales from owned and operated (i.e., vertical) retail properties to better control the experience and pricing. ith traditional brick-and-mortar retail down or Top players are beginning to beat their traditional retail flat across the U.S. and Western Europe, the partners at their own game. Nike, who runs away with the sportswear category is in an all-out sprint to increase No. 1 spot in our inaugural Digital IQ Index®: Sportswear, the percentage of business driven or derived online. trails only Foot Locker in U.S. online sales. While still a small Robust user reviews, product customization, and loyalty percentage of overall sales, online and other direct-to- programs have rewarded some brands with year-over-year consumer sales will likely be many of the brands’ primary 2 e-commerce growth upward of 30 to 50 percent.1 growth channel. The Echo The value of high-budget TV campaigns and generous athlete endorsement contracts is increasingly recognized through extended engagement online. The Facebook communities and Twitter handles of athletes took center stage in the Olympics when participants were forbidden to promote the brands they endorse on social media. A primary factor in an athlete’s endorsement contract is the size of his or her social media community and the frequency of communication. This is for good reason: our data indicates that athletes generate substantially more social media engagement when posting about brands than brands generate when posting about their endorsers. 1. Select 10ks; Internet Retailer. 2. “Online Sporting Apparel Sales in the U.S.,” IBIS World, March 2012. © L2 2012 L2ThinkTank.com REPRODUCTIONS PROHIBITED 2 Inquire about your brand’s ranking. Contact us. EXceRPT from the 2012 Digital IQ Index®: Sportswear To access the full report, contact [email protected] Plastic, Rubber, Cloth, Zeroes, and Ones Few categories are better leveraging digital technologies to increase the Sportswear Video Click to Play perceived value of the product than sportswear. Innovative systems like Nike+ and miCoach from adidas are worth much more to the consumer than the $149 pricetag on a Nike+ FuelBand or the $70 pricetag on a miCoach Connect Heart Rate Monitor. The accompanying iPhone apps and online dashboards enhance loyalty and give brands access to new streams of consumer data. Digital IQ = Shareholder Value Our thesis is that digital competence is linked to shareholder value. This study attempts to quantify the digital competence of 42 sportswear brands. Our aim is to provide a robust tool to diagnose digital strengths and weaknesses and help brands achieve greater return on incremental investment. Similar to the medium we are assessing, our methodology is dynamic and we hope you will reach out to us with comments that improve our methodology, investigation, and findings. You can reach me at [email protected]. SCOTT Galloway Clinical Professor of Marketing, NYU Stern Founder, L2 © L2 2012 L2ThinkTank.com REPRODUCTIONS PROHIBITED 3 Inquire about your brand’s ranking. Contact us. EXceRPT from the 2012 Digital IQ Index®: Sportswear To access the full report, contact [email protected] ABOUT THE RANKING The Methodology Mobile Site Android • Compatibility • Availability • Functionality • Popularity 35% Site 20% • Transaction • Functionality Effectiveness of brand site Capability Innovation Site Technology Mobile iOS Applications • SMS (both iPhone & iPad) • Geolocal (Foursquare) Site Search & Navigation • Availability • Recent Brand Compatibility, optimization, and Product Pages & Checkout • Popularity Initiatives marketing on smartphones, tablets, • Functionality Customer Service & Store Locator and other mobile devices • iPad Differentiation Account, Product Customization, & Fitness Tracking Brand Translation Aesthetics & Messaging Facebook YouTube • Likes & Growth • Views Search, display, and email marketing efforts • Tabs & Applications • Number of Uploads Search Blogs & Other User-Generated 20% • Content • Subscriber Growth Content • Traffic • Interaction Rate • Viral Videos • SEM • Mentions • F-Commerce • YouTube Search Social Media • SEO • Sentiment • Web Authority Twitter Emerging Platforms 25% Email • Followers • Instagram Brand presence, community size, Display Advertising • Frequency • Growth • Google+ Digital Marketing content, and engagement on social & Innovation • Content • Frequency • Pinterest • Text & Banner Ads • Social Media Integration media platforms • Online Voice • Tumblr • Retargeting • Mobile Optimization • Cross-Platform Innovation Initiatives Digital IQ Classes Genius 140+ Gifted 110–139 Average 90–109 Challenged 70–89 Feeble <70 Digital competence is a point of competitive Brands are experimenting and innovating across Digital presence is functional yet Limited or inconsistent adoption Investment does not differentiation. Brands creatively engineer site, mobile, and social platforms. Digital presence predictable. Uninspired efforts are of mobile and social media match opportunity. commerce and content for a variety supports brand image and larger marketing efforts. often siloed across platforms. platforms. Site lacks inspiration of devices and online environments. and utility. © L2 2012 L2ThinkTank.com REPRODUCTIONS PROHIBITED 4 Inquire about your brand’s ranking. Contact us. EXceRPT from the 2012 Digital IQ Index®: Sportswear To access the full report, contact [email protected] GENIUS Nike DIGITAL IQ RANKING adidas GIFTED The North Face PUMA L.L.Bean Under Armour RANK BRAND DIGITAL IQ RANK BRAND DIGITAL IQ RANK BRAND DIGITAL IQ New Balance Quiksilver Reebok Lacoste GENIUS GIFTED GIFTED Burton 130 9 116 Converse 3 Vans AVERAGE VF Corporation adidas AG Teva Timberland Speedo Columbia Sportswear 1 148 UGG Australia 128 10 115 SKECHERS 4 Merrell Brooks Sports PPR Lacoste S.A. Athleta Patagonia Sperry Top-Sider Volcom Reef 123 11 110 CHALLENGED 5 Eddie Bauer Saucony NIKE, Inc. L.L.Bean, Inc. Burton Corporation Mizuno Mountain Hardwear KEEN Billabong TYR Hurley 6 122 11 110 K-Swiss ASICS Under Armour, Inc. NIKE, Inc. FEEBLE Arc’teryx Marmot Vibram FiveFingers Fila 142 120 110 Danskin 2 7 11 SKINS New Balance Athletic Shoe, Inc. VF Corporation GIFTED 8 118 GENIUS adidas AG GIFTED Quiksilver, Inc. © L2 2012 L2ThinkTank.com REPRODUCTIONS PROHIBITED 5 Inquire about your brand’s ranking. Contact us. EXceRPT from the 2012 Digital IQ Index®: Sportswear To access the full report, contact [email protected] GENIUS Nike DIGITAL IQ RANKING adidas GIFTED The North Face PUMA L.L.Bean RANK BRAND DIGITAL IQ RANK BRAND DIGITAL IQ RANK BRAND DIGITAL IQ RANK BRAND DIGITAL IQ Under Armour New Balance Quiksilver Reebok FEEBLE Lacoste average average 93 14 109 22 30 83 38 60 Burton CHALLENGED Converse Deckers Outdoor Corporation Gap Inc. Columbia Sportswear Co. Jarden Corporation Vans AVERAGE Teva Timberland 108 22 93 31 81 38 60 Speedo 15 Columbia Sportswear UGG Australia Patagonia, Inc. KEEN, Inc. VF Corporation Vibram USA Inc. SKECHERS Merrell Brooks Sports Athleta 107 93 79 57 Patagonia 16 22 32 40 Sperry Top-Sider Volcom Pentland Group plc* Collective Brands, Inc. Billabong International Limited Fila Korea, Ltd. Reef CHALLENGED Eddie Bauer Saucony 17 106 25 91 33 77 41 55 Mizuno Mountain Hardwear Columbia Sportswear Co. PPR Swimwear Anywhere, Inc. Iconix Brand Group, Inc. KEEN Billabong TYR Hurley K-Swiss 18 103 26 90 34 75 42 54 ASICS FEEBLE Deckers Outdoor Corporation VF Corporation NIKE, Inc. FEEBLE SKINS International Trading AG Arc’teryx Marmot Vibram FiveFingers Fila 89 74 Danskin 19 100 27 35 SKINS CHALLENGED SKECHERS USA, INC. Eddie Bauer Holdings Inc. K-Swiss, Inc. 20 99 28 88 36 70 Wolverine Worldwide, Inc. ASICS Corporation Collective Brands, Inc. CHALLENGED 21 96 28 88 37 64 * Pentland Group plc owns Speedo International Ltd.; Speedo USA is manufactured and marketed by The Warnaco Group, Inc. under average Berkshire Hathaway Inc. Mizuno Corporation Amer Sports FEEBLE exclusive license © L2 2012 L2ThinkTank.com REPRODUCTIONS PROHIBITED 6 Inquire about your brand’s ranking. Contact us. EXceRPT from the 2012 Digital IQ Index®: Sportswear To access the full report, contact [email protected] KEY FINDINGS Site Features Site Features Although 71 percent of brands allow product sharing via % of Brands With and Without Facebook, only half allow sharing via email. Customer August 2012 research suggests the latter is more commonly used.4 With Without More advanced Facebook Connect technology, which allows users to log on to a brand’s site through Facebook, 26% 29% 48% 71% is employed by just four brands: New Balance, Nike, SKECHERS, and Speedo. 74% 71% Although 42 percent of all shoppers suggest that they prefer 52% to shop sites that have live chat5 (the statistic significantly over-indexes among affluent males), only 29 percent of 29% sportswear brands offer live chat on their sites. Almost three
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