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OCTOBER 11, 2011 a Think Tank for DIGITAL INNOVATION

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OCTOBER 11, 2011 a Think Tank for DIGITAL INNOVATION ® Fashion SCOTT GALLOWAY NYU Stern OCTOBER 11, 2011 A THINK TANK for DIGITAL INNOVATION © L2 2011 L2ThinkTank.com November 10, 2011 On November 10, L2 will host its third-annual Innovation Forum in New York City. Presented with NYU Stern School The Morgan Library of Business, the Forum will address innovation in digital marketing and implications for prestige brands in a TED- New York City style event. Speakers include CEOs, Nobel Laureates, and thought leaders from academia and industry. To register, visit: FORUM: http://L2innovationforum2011.eventbrite.com elements: • High-velocity, provocative presentations by thought leaders from industry and academia • Conversations and panels with industry icons and influencers • Just-released Digital IQ Index® research bench- marking prestige brands in fashion, beauty, accessories, and retail • Trends, predictions, and best practices based on a year’s worth of L2 research • Performances by innovators in art, media, music, and technology • Countdown of the seven most innovative programs The largest gathering of in prestige prestige executives in North America To register, visit: http://L2innovationforum2011.eventbrite.com GREG LINDSAY JULIAN TREASURE Author & Journalist TOM PHILLIPS Author | Sound Business Aerotropolis: The Way CEO & Co-Founder Chairman | The Sound hosts: speakers: We’ll Live Next Media6° Agency DUNCAN WATTS SCOTT GALLOWAY New speakers are being added daily. TAMÁS LOCHER VICTORIA RANSOM Principal Research Founder | L2 Visit our event site for the most up-to-date list. Co-Founder & CEO Founder & CEO Scientist Professor of Marketing LOOKK.com Wildfire Yahoo! Research NYU Stern JENNIFER AAKER TIM HWANG THOMAS LOCKWOOD Professor | Stanford Chief Scientist | Pacific Author | Design PAUL ROMER GEOFF WATTS PETER HENRY University Graduate Social Architecting Thinking and Building Professor Co-Founder Dean School of Business Corporation Design Strategy NYU Stern EDITD NYU Stern SONIA MARCIANO DAVID CAREY JOHN JANNUZZI Professor of Mangagement KRISTINE SHINE JOEL WEINGARTEN MICHAEL LAZEROW President Editor & Organizations Vice President CEO & Founder CEO & Founder Buddy Hearst Magazines Lucky Magazine NYU Stern Popsugar Media StyleOwner Media SHERIL KIRSHENBAUM CAPTAIN DAVE GILBOA Research Scientist OREN MICHELS MARC SPEICHERT DAVID WERNER Co-CEO & Co-Founder Webber Energy Group, CEO & Founder Chief Marketing Officer U.S. Navy Office of Warby Parker University of Texas Mashery L’Oréal USA Information MELISA GOLDIE EVP, Chief Creative CATHERINE LEVENE MAUREEN MULLEN JOHN TOMICH GABE ZICHERMANN Officer Co-Founder & CEO Research & Advisory CEO & Co-Founder CEO Calvin Klein, Inc ArtSpace L2 OneStop Gamification Co. DIGITAL IQ INDEX®: Want to know more about your brand’s ranking? Fashion CONTACT US INTRODUCTION fashion forward Digital is fashion’s new skinny jeans From live streams of runway shows to an arms race on social media platforms, Two Ways brands are seeking the halo of innovation that comes from inspired online There are two ways to build shareholder value: increase revenue and/or reduce programming. A recent report by Fondazione Altagamma indicates that site costs. Managers tend to focus on the former when presented with new technol- traffic and online buzz in Fashion exceeds all other luxury categories with the ogy. Sixty-seven percent of EU consumers and half of American consumers 1 exception of Automobiles. The industry has also been among the first to pilot claim they research luxury purchases online before buying, highlighting digital’s marketing initiatives on Foursquare, Tumblr, and photo-filtering and sharing app potential to drive and derive incremental revenue. However, social media’s true Instagram. Some programs could best be described as bleeding edge, includ- promise may lie in the less romantic notion of significantly reducing the costs of, ing Ralph Lauren’s 4D building façade and Ermenegildo Zegna’s virtual store on and addiction to, offline media. the iPad. Brands that establish direct relationships with their customers via social media Trend vs. Commitment platforms have the opportunity to excise the publisher’s tax. Burberry’s specula- However, most fashion brands still approach digital as a series of pet projects tive investment in Facebook has resulted in more than 8.2 million fans—a more rather than presenting a coherent multi-platform strategy. Although 94 percent target rich audience nearly seven times the global circulation of Vogue. of brands in the Index have a presence on Facebook, one in five brands still lacks e-commerce capability. ROI-proven tactics such as email marketing CRM Hubris and search engine marketing are underutilized, and site navigation is still an A lot has changed in our third annual Luxury Digital IQ Index®. Press-darling afterthought—30 percent of brands lack basic site search. Burberry tops the list, buttressing its social legacy with a site relaunch and mobile optimization. Index newcomer Kate Spade demonstrates heritage isn’t 1. “Digital Luxury Experience,” Fondazione Altagamma, September 2011. © L2 2011 L2ThinkTank.com 3 DIGITAL IQ INDEX®: Want to know more about your brand’s ranking? Fashion CONTACT US INTRODUCTION DIGITAL BIRTHS AN ICON Relative Digital IQ Index® Performance of Select Fashion Brands everything, coming out of nowhere to nab the number two spot. (2009, 2010, 2011) And Coach and Gucci held on to their Genius crowns. However, some industry icons continue to slip further behind. Despite % Rank: 100% % Rank: 100% 100% strong social presences, Chanel and Christian Dior both regis- % Rank: 95% tered Average IQs, largely a result of their lack of e-commerce % Rank: 93% capability outside of beauty. Finally, the biggest losers in this % Rank: 93% year’s study are two of icons of fashion: Prada and Hermès, % Rank: 88% which have fallen from Gifted in 2009 to Challenged this year. % Rank: 87% We believe these brands are victims of their own success, believing % Rank: 83% iconic status can be a substitute for innovation and investment % Rank: 80% 75% % Rank: 79% online. This hubris will haunt them, and their shareholders. Digital IQ = Shareholder Value % Rank: 67% % Rank: 64% % Rank: 62% Our thesis is that digital competence is inextricably linked to share- holder value. Key to managing and developing a competence is an actionable metric. This study attempts to quantify the digital competence of 49 global fashion brands. Our aim is to provide Rank Percentile ® 50% a robust tool to diagnose digital strengths and weaknesses and help brands achieve greater return on incremental investment. % Rank: 47% % Rank: 43% Similar to the medium we are assessing, our methodology is Digital IQ Index dynamic and we hope you will reach out to us with comments % Rank: 33% that improve our methodology, investigation, and findings. You % Rank: 29% can reach me at [email protected]. 25% Regards, % Rank: 10% Scott Galloway Founder, L2 Clinical Professor of Marketing, NYU Stern 0% 2009 2010 2011 © L2 2011 L2ThinkTank.com 4 DIGITAL IQ INDEX®: Want to know more about your brand’s ranking? Fashion CONTACT US ABOUT THE RANKINGS METHODOLOGY DIGItal IQ Classes Site: 35% IQ Range IQ Class Effectiveness of brand site 140+ GENIUS FUNCTIONALITY & CONTENT: 75% BRAND TRANSLATION: 25%: Digital innovation is a point of • Technology • Aesthetics differentiation for these brands. Site • Navigation & Product/Site Search • Messaging & Interactivity experience is searchable, share- • Social Media Integration able, and mobile-optimized. Social • Customer Service & Store Locator media is embedded into marketing • Product Display & Content • E-Commerce & Transaction Orientation DNA, and campaigns are integrat- • Account Signup & Functionality ed across multiple digital platforms. • Global E-Commerce • Branded Content 110-139 GIFTED Brands are experimenting and Digital Marketing: 25% innovating across site, mobile, and Search, display, and email marketing efforts social platforms. Digital presence • Search: Traffic, SEM, SEO, Web Authority is consistent with brand image and • Display Advertising & Innovation: Text & Banner Ads, Retargeting, Cross-platform Innovation Initiatives, larger marketing efforts. Emerging Platforms • Blogs & Other User-Generated Content: Mentions, Sentiment 90-109 AVERAGE • Email: Frequency, Language, Content, Social Media Integration, Promotion Digital presence is functional yet Social Media: 25% predictable. Efforts are often siloed across platforms. Brand presence, community size, content, and engagement on major social media platforms • Facebook: Likes, Growth, Post Frequency, Applications, Responsiveness, Content, Global Presence • Twitter: Followers, Growth, Tweet Frequency, Online Voice 70-89 CHALLENGED • YouTube: Views, Number of Uploads, Subscriber Growth, Content, Interactivity Limited or inconsistent adoption of • Tumblr: Post Frequency, Likes, Re-blogs, Social Media Integration & Shareability mobile and social media platforms. Site lacks inspiration and commerce Mobile: 15% orientation. Compatibility, optimization, and marketing on smartphones and other mobile devices • Mobile Site: Compatibility, Functionality, Transaction <70 FEEBLE • iOS Applications (iPhone & iPad): Availability, Popularity, Functionality, iPad Differentiation Investment does not match • Android: Availability, Popularity, Functionality opportunity. • Innovation: SMS, Geolocal, Other Mobile Marketing Innovation © L2 2011 L2ThinkTank.com 5 DIGITAL IQ INDEX®: Want to know more about your brand’s ranking? Fashion CONTACT US DIGITAL IQ RANKING PARENT
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