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L2 European retail digital

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L2′s first Index of European Specialty Retail brands assesses and ranks the digital aptitude of 55 brands across the five E.U. markets in Western Europe and the United States. …

L2′s first Index of European Specialty Retail brands assesses and ranks the digital aptitude of 55 brands across the five E.U. markets in Western Europe and the United States.

Brands were measured on 350 data points across four dimensions: Site, Digital Marketing, Social Media, and Mobile and assigned a Digital IQ and a corresponding class of Genius, Gifted, Average, Challenged, or Feeble.

The IQ distribution reveals a significant bifurcation in digital competence, as nearly half of the brands were categorized as Challenged or Feeble. Retailers with lower average price points performed better, suggesting high-end retailers are still hesitant to embrace digital channels.

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  • 1. ® EurOpEAn SCOTT GALLOWAY Specialty retail NYU Stern D e c e m b e r 1 5 , 2 0 11 A Think TAnk for DiGiTAL innOVATiOn© L2 2011 L2ThinkTank.com
  • 2. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USinTrODUcTiOn A Tale of Two ContinentsWeakened consumer confidence has sent European retail sales down 2.3 percent year over year.1 The silver lining:E-commerce. In the big three markets—the U.K., Germany, and France—business-to-consumer e-commerce salesare projected to increase at a compound annual growth rate of 12.2 percent, exploding from $93.5 billion in2011 to an estimated $148.3 billion by 2015.2 In the eight weeks leading to Christmas, online sales are expectedto increase nearly 20 percent from a year ago.3 Furthermore, more consumers in the U.K. and Germany made apurchase online as a percentage of the internet population in 2011 than in e-commerce’s birthplace, the U.S.4What Happens Online Does not Winners & LosersStay Online In our first-ever Digital IQ Index® measuring the digital effortsDigital provides a greater opportunity than just generating online of European specialty retailers, a bifurcation appears to besales. More than 65 percent of consumers in major European emerging. Genius retailers including online-only players ASOSmarkets use their smartphones while in brick-and-mortar stores. and NEt-A-POrtEr, and juggernauts H&M and Sephora, areIn addition, two-thirds of EU consumers indicate that they developing robust, multi-platform e-commerce experiences,conduct research online before heading in store, highlighting aggressively building engaged communities on social media,digital’s potential to drive and derive incremental revenue. and signaling innovation through experimentation on emerging platforms. Meanwhile, other retailers dim their growth prospects with anemic sites and social media programs.1. “Outlook for the Retail and Consumer Products Sector in Asia,” PWC, 2011.2. “Western Europe B2C Ecommerce,” eMarketer, July 2011.3. “Europeans will spend nearly $70 billion online for the holidays,” Allison Enright, Internet Retailer, November 23, 2011.4. Ibid, eMarketer, July 2011.© L2 2011 L2ThinkTank.com 2
  • 3. DiGiTAL iQ inDEx ®:european Specialty retail Want to know more about your brand’s ranking? cOnTAcT USinTrODUcTiOnEuropean Disunion A V e r A G e D i G i TA L i q by c O U n T r y O f h e A D q U A r T e r SDigital competence varies by country of origin. retailers head-quartered in the U.K., where 12 percent of all retail takes place U.K.online, boast average IQs of 112. their counterparts in France (n=15)and Italy, however, average just 87 and 76, respectively. 112Digital iQ = Shareholder Value Other* (n=5)Our thesis is that digital competence is inextricably linked toshareholder value. Key to managing and developing a compe- 80tence is an actionable metric. this study attempts to quantifythe digital competence of 55 European specialty retailers. theranking reflects brands’ efforts across the big five markets inWestern Europe and the U.S. Our aim is to provide a robust toolto diagnose digital strengths and weaknesses and help brandsachieve greater return on incremental investment. Like the France (n=24)medium we are assessing, our methodology is dynamic, and we Italyhope you will reach out to us with comments that improve our 87 (n=5)methodology, investigation, and findings. You can reach meat scott@stern.nyu.edu. 76regards, Spain (n=6)ScOTT GALLOwAyFounder, L2 104Clinical Professor of Marketing, NYU Stern * Sweden, Germany, & Switzerland© L2 2011 L2ThinkTank.com 3
  • 4. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? CONTACT USAbOUT The rAnkinGS m e T h O D O LO G y D i G i TA L i q c L A S S e S Site: 35% IQ Range IQ Class Effectiveness of brand site 140+ GeniUS FunCTiOnALiTY & COnTEnT: 75% BrAnD TrAnSLATiOn: 25% Digital competence is a point • Site Technology • Site Aesthetics of differentiation for these retailers. • navigation, Product & Site Search • messaging & imagery Site content is searchable, • Social media integration shareable, and mobile optimized. • customer Service & Store Locator Social media efforts complement • Product Page broader digital strategy. • checkout • Account • international customization: Language, 110–139 GifTeD Currency, Consistency, Shipping retailers are experimenting and innovating across site, mobile, and Digital Marketing: 30% social platforms. Digital presence Search, display, and email marketing efforts is consistent with brand image and larger marketing efforts. • Search: traffic, SEM, SEO, Web Authority • Advertising & innovation: Display, retargeting, recent Brand Initiatives, Presence on tumblr • blog & Other User-Generated content: Mentions, Sentiment 90–109 AVerAGe • email: Frequency, Content, Social Media Integration, tactics Digital presence is functional yet predictable. Efforts are often siloed Social Media: 20% across platforms. Brand presence, community size, content, and engagement on major social media platforms • facebook: Likes, Growth, tabs & Applications, responsiveness, Engagement 70–89 chALLenGeD • Twitter: Followers, Growth, tweet Frequency, Online Voice • youTube: Views, Number of Uploads, Subscriber Growth, Viral Videos Limited or inconsistent adoption of mobile and social media platforms. Mobile: 15% Site lacks inspiration and utility. Compatibility, optimization, and marketing on smartphones and other mobile devices <70 feebLe • mobile Site: Compatibility, Functionality, transaction Capability • iOS Applications (iPhone & iPad): Availability, Popularity, Functionality, iPad Differentiation Investment does not match • Other Platforms (Android & blackberry): Availability, Popularity, Functionality opportunity.© L2 2011 L2ThinkTank.com 4
  • 5. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? CONTACT USD i G i TA L i q r A n k i n G HEADQuArTErS: U.K. SPAIN FRANCE OthER ItAlY rank Brand Headquarters Digital iQ Class Comments A digital leader across all platforms, delivers unmatched programming and top-notch 1 ASOS u.K. 156 Genius customer service 2 H&M Sweden 148 Genius Social media giant also boasts strong site with interactive product pages Seamless e-commerce experience; “Fashion’s Night Out” campaign bridges 2 nET-A-pOrTEr u.K. 148 Genius off- and online Mobile leader drives e-commerce with robust content and a plethora 4 SEpHOrA France 142 Genius of product reviews Fastest-growing twitter following and a site experience that wows across 5 MArKS & SpEnCEr u.K. 130 Gifted every dimension Eau de Lacoste L.12.12 launch demonstrates digital mastery; brand integrates social 6 LACOSTE France 127 Gifted media across every major platform 7 DiESEL italy 126 Gifted Site offers a wealth of content, but mobile offering doesn’t enthrall 8 L’OCCiTAnE France 124 Gifted Brand boasts three of the top 10 fastest-growing pages on Facebook 9 MAnGO Spain 121 Gifted Mobile savant hosts m-commerce across every major operating system 10 HOuSE OF FrASEr u.K. 120 Gifted Excellent e-commerce experience provides localized buy-and-collect option 11 HArrODS u.K. 119 Gifted Digital efforts reinforce brand’s heritage and reputation Highest scoring m-commerce experience, but buggy site hampers traditional 11 nExT u.K. 119 Gifted desktop experience 13 FrEnCH COnnECTiOn u.K. 118 Gifted Seamless e-commerce experience and impressive blogs Site excels across every dimension except aesthetics; quick to adopt 14 LA rEDOuTE France 114 Gifted Google +1 button© L2 2011 L2ThinkTank.com 5
  • 6. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? CONTACT USD i G i TA L i q r A n k i n G HEADQuArTErS: U.K. SPAIN FRANCE OthER ItAlY rank Brand Headquarters Digital iQ Class Comments 15 TOpSHOp u.K. 113 Gifted robust social media programming and huge follower base, but limited mobile offering Facebook leader with more than 10.5 million “likes”; user-generated style campaign 15 ZArA Spain 113 Gifted and contest entertain 17 nEW LOOK u.K. 111 Gifted Efficient e- and m-commerce could be enhanced with stronger design 18 3 SuiSSES France 110 Gifted Interactive catalogs and multimedia blog stand out; Google+ sharing Cross-platform corporate social responsibility efforts complement digital strategy; 19 SELFriDGES u.K. 108 Average mobile investments lag 20 SArEnZA France 107 Average Best asset is site functionality, but lacks aesthetic flair Brick-and-mortar behemoth has created an equally overwhelming digital offering— 21 EL COrTE inGLéS Spain 106 Average quantity over quality 22 CAMpEr Spain 105 Average Nimble site that balances aesthetics and functionality 23 BOOTS u.K. 103 Average Wins on functionality, loses on visual appeal 23 YVES rOCHEr France 103 Average Strong tutorial content gets lost due to feeble navigation 25 GALEriES LAFAYETTE France 98 Average Facebook page benefits from innovative features such as custom Instagram tab 26 BrAnDALLEY France 97 Average Le Lab engages customers by giving them a role in choosing the featured design 26 DESiGuAL Spain 97 Average Site reflects brand personality, but interactivity is relegated to microsites 28 THE BODY SHOp u.K. 95 Average Competent e-commerce offering, but no mobile presence© L2 2011 L2ThinkTank.com 6
  • 7. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? CONTACT USD i G i TA L i q r A n k i n G HEADQuArTErS: U.K. SPAIN FRANCE OthER ItAlY rank Brand Headquarters Digital iQ Class Comments uniTED COLOrS OF 28 BEnETTOn italy 95 Average No e-commerce 30 VEnTE-priVéE France 92 Average Investment in Android and iOS platforms, but lackluster site 31 ESpriT Germany 87 Challenged Celebrates the holidays with the “Make Your Wish” offline/online campaign 31 MATALAn u.K. 87 Challenged Virtual fitting room and sophisticated Facebook page are strongest assets 33 KOOKAi France 82 Challenged Blog delights; site is functional but dry 33 prinTEMpS France 82 Challenged No e-commerce, but shareable content delivers 35 MASSiMO DuTTi Spain 79 Challenged Branded content dominates site; e-commerce upgrades sorely needed 36 TriuMpH u.K. 78 Challenged Site navigation lacks sophistication and detracts from brand’s image 37 ETAM France 77 Challenged Facebook functionality is more sophisticated than site 37 MAriOnnAuD France 77 Challenged Strong social media integration on Facebook, but site design needs a refresh 37 AGnèS B. France 77 Challenged Aesthetic appeal fails to mask poor functionality 40 COMpTOir DES COTOnniErS France 76 Challenged Interactive e-catalogs are the only bright spots 41 AnDré France 75 Challenged Facebook Connect redeems an otherwise static site 42 MAjE France 74 Challenged Digital work-in-progress© L2 2011 L2ThinkTank.com 7
  • 8. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? CONTACT USD i G i TA L i q r A n k i n G HEADQuArTErS: U.K. SPAIN FRANCE OthER ItAlY rank Brand Headquarters Digital iQ Class Comments 43 MOLTOn BrOWn u.K. 71 Challenged Brand equity does not translate online 43 SAnDrO France 71 Challenged Site design pleases despite nascent digital footprint 45 MinELLi France 68 Feeble E-commerce enabled site is simple but sleek 46 LE BOn MArCHé France 67 Feeble Site design is confusing 47 KADEWE Germany 64 Feeble No frills e-commerce 48 inTiMiSSiMi italy 63 Feeble Beautiful photography, but lacks essentials such as store locator 48 GEOx italy 63 Feeble Still working out e-commerce kinks 50 GLOBuS Switzerland 57 Feeble No social media presence Strong site and Facebook foundation; waiting for more content and 51 pAuLE KA France 55 Feeble stronger navigation 52 GErArD DArEL France 51 Feeble transactions and not much else 53 jELMOLi Switzerland 46 Feeble Site functions best as an online magazine 54 OrCAnTA France 42 Feeble No engagement, interactivity, or shareability 55 LA rinASCEnTE italy 35 Feeble Site is a relic© L2 2011 L2ThinkTank.com 8
  • 9. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USkey finDinGS D i G i TA L i q D i S T r i b U T i O n * % of brands per Digital iq classStrength Begets StrengthFour brands, ASOS, H&M, NEt-A-POrtEr, and Sephora, GEniuS ASOS DiGiTAL iQ h&Machieved Genius status in the inaugural L2 Digital IQ Index®: 7% NEt-A-PORtER >140European Specialty Retail study. All four have established a Sephorarobust e-commerce channel, strong programming on socialmedia platforms, mobile compatibility, and display a willingness Marks & Spencer Next GiFTEDto innovate on emerging platforms. the overall IQ distribution lacoste French Connectionreveals a significant bifurcation: Only 22 percent of brands are Diesel la Redoute DiGiTAL iQclassified as having Average IQs, while the majority are at the l’Occitane topshop 25% Mango Zara 110–139poles as either competent (Genius and Gifted) or incompetent house of Fraser New look(Challenged and Feeble). harrods 3 Suissesresults of our Digital IQ Index®: Specialty Retail study, whichranked U.S. retailers, revealed 2011 as the year of the American AVErAGE Selfridges BrandAlleydepartment store. Both Macy’s and Nordstrom achieved Genius Sarenza Desigualrankings, and the category itself boasted an average Digital El Corte Inglés the Body Shop DiGiTAL iQIQ of 118, just behind the digitally native e-tailers. In contrast, 22% Camper United Colors of 90–109 Boots BenettonEuropean department stores posted an average Digital IQ of Vente-Privée Yves Rocher86, with 42 percent residing in the Feeble class. the category’s Galeries lafayetteperformance is not surprising: One-third of European departmentstores are not e-commerce enabled, 58 percent have no mobile Esprit Marionnaud CHALLEnGEDpresence, and 17 percent do not engage in email marketing. Matalan Agnès b. Kookai Comptoir des Cotonniers DiGiTAL iQ Printemps André 25% Massimo Dutti 70–89 Maje triumph Sandro Etam Molton Brown FEEBLE Minelli Paule Ka le Bon Marché Gerard Darel DiGiTAL iQ KaDeWe Jelmoli 20% <70 Intimissimi Orcanta Geox la Rinascente Globus* Numbers do not add up to 100% due to rounding© L2 2011 L2ThinkTank.com 9
  • 10. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? CONTACT USkey finDinGS youTube channel has well-integrated links to site, ASOS marketplace, in the Company of Genius and blogs ASOS Skype partnership provides one- on-one style advice to customers on november 23 ASOS hosts a consumer- to-consumer marketplace for reselling clothing, shoes, and accessories mobile site allows shoppers to customize currency and checkout via PayPal The retailer launched f-commerce on its facebook page allowing users to shop without leaving the platform© L2 2011 L2ThinkTank.com 10
  • 11. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? CONTACT USkey finDinGS in the Company of Genius h&m h&m has the most robust Google Plus page in the index The retailer nabbed both the highest number of Twitter followers and youTube brand channel Virtual dressing room allows upload views visitors to style a model of their choice© L2 2011 L2ThinkTank.com 11
  • 12. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? CONTACT USkey finDinGS in the Company of Genius neT-A-POrTer LiVe neT-A-POrTer monitors real-time purchases across the globe fashion fix, features brand news and product highlights, press coverage, and a live Twitter feed instagram serves as the platform to update followers on the #shoeoftheday© L2 2011 L2ThinkTank.com 12
  • 13. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? CONTACT USkey finDinGS in the Company of Genius Sephora boasts SePhOrA best-in-class iOS applications The retailer’s mobile site is fully e-commerce enabled; reviews are housed on a separate mobile site, which is designed for in-store use Sephora’s “beauty Talk” forum allows customers to give each other beauty tips and ask for expert advice Sephora TV houses its how-to and style advice videos© L2 2011 L2ThinkTank.com 13
  • 14. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT US A V e r A G e D i G i TA L i q by c O U n T r y O f O r i G i nkey finDinGS V S . S h A r e O f O n L i n e r e TA i L (December 2011) 112The Queen (of Digital) Gifted 110retailers headquartered in the U.K. boast an average IQ of 112, 104eight points higher than Spanish peers and significantly higher Averagethan those in France and Italy. 87the U.K.’s IQ supremacy mirrors macro trends: Britain’s online 90 80share of all retail sales leads Europe at 12 percent, with the Challenged 76nation’s e-commerce shoppers spending almost $3,000 onlineannually.5 Additionally, 44 percent of U.K. specialty retailershave a mobile-optimized site, all are present on Facebook and UK Spain France Italy Other (n=15) (n=6) (n=24) (n=5) (n=5)twitter and are e-commerce enabled. Spain’s average IQ gets a Online Retailboost from retail giants Mango and Zara, both Gifted. Share of n/a 12% 3.5% 7.3% 3.9%Children of the MediumOnline-only retailers boast significantly higher Digital IQ scoresthan their brick-and-mortar peers, suggesting traditionalretailers are still playing catch-up in Europe. For those brandswith a store retail strategy, there is also a relationship between A V e r A G e D i G i TA L i q by n U m b e r O f S T O r e Sthe number of retail locations and Digital IQ, indicating that (December 2011)terrestrial retailers with a larger offline footprint are also more 120competent online. Gifted 110 110 106 Average 90 87 Challenged 79 76 >1,000 500–1,000 250– 500 100–250 <100 Online Only5. “Western Europe B2C Ecommerce,” Karin Von Abrams, eMarketer, August 2011.© L2 2011 L2ThinkTank.com 14
  • 15. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USkey finDinGSLuxury Comes up Shortretailers with a lower average price point register an averageDigital IQ 20 points above their higher priced peers, indicating PA r e n T c O m PA n y r e V e n U e S V S . D i G i TA L i qhigh-end brands have still not found their footing online. this (December 2011)disparity suggests a missed opportunity, as affluent consumersare more likely to own a smartphone and tablet, spend more timeonline, and are the largest contributors to e-commerce growth. GeniusLeveling the playing Field 140Among the 20 retailers with publicly available financials, thereis no relationship between the size of the business (in annualrevenue) and Digital IQ, suggesting that digital provides a Giftedmedium for smaller brands to punch above their weight class. A V e r A G e D i G i TA L i q by P r i c e P O i n T 110 (November 2011) Average Gifted 111 110 90 Challenged Average 70 92 Feeble 90 90 Challenged 0 5 10 15 20 25 30 35 2011 Fiscal Year Revenues (in $ billions) $ $$ $$$© L2 2011 L2ThinkTank.com 15
  • 16. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USkey finDinGS A D O P T i O n A c r O S S P L AT f O r m SMultichannel % of brands with the followingEuropean specialty retailers are present across most digital (November 2011)channels. All but one maintain a presence on Facebook andmore than 85 percent are e-commerce enabled. On the next 98% 93% 87% 85%retail battleground, mobile, nearly 60 percent of retailers have 80%launched a mobile site and/or an application. 67% 58%Emerging platforms offer more opportunity for differentiation.While 38 percent have a presence on Google+, only 16 percent 38%of the retailers have established official Instagram accounts and 16%just five percent have a tumblr blog. H&M leads on Google+, 5%with more than 15,000 subscribers, versus the Index average of808. In addition, NEt-A-POrtEr photos are followed by morethan 14,000 Instagram subscribers. During data collection, onlyone brand, Kookai, was present on all three new media channels. Facebook Email E-Commerce Twitter YouTube Blogs Mobile Google+ Instagram Tumblr Emerging PlatformsLow-Hanging FruitEighty-seven percent of the retailers’ sites are e-commerce 83% S i T e f e AT U r e A D O P T i O n 76%enabled, but most lack some of the most basic features, such (November 2011)as user reviews and product ratings. though the majority, 83 WIthpercent, include videos, it is their shareability that drives visits: WIthOUtSites with interactive and shareable videos experienced a 19 30% 26%percent increase in traffic over a one-month period, versus just 15%five percent for those without. Similarly, retailer sites with blogs 4%experienced an 18 percent increase in traffic over the same period. Videos Store Locator User Reviews/ Product Quickview Product Videos Live Chat Ratings 17% 24% 70% 74% 85% 96%© L2 2011 L2ThinkTank.com 16
  • 17. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USkey finDinGS emAiL mArkeTinG ADOPTiOnEmpty inbox (September–November 2011)While 90 percent of European specialty retailers offer email EMAIl RECEIVEDsignup, almost half did not send an email marketing message NO EMAIl RECEIVEDwithin 10 weeks. Email privacy laws are more restrictive inEurope than in the U.S., but the medium still provides oneof the most effective call-to-action marketing vehicles. Emailpenetration across Europe is 67 percent, and every segment, 45% 55%with the exception of the 15–24 demographic, has registeredemail adoption growth—most in the double digits.6Online retailers such as Vente-Privée, NEt-A-POrtEr, andBrandAlley lead the pack in email frequency and sophisticationbecause of their high inventory turnover, sending upwards ofthree emails per week versus the Index average of 0.9. e m A i L f e AT U r e A D O P T i O n % of brands with the following 63% (November 2011) 52% 44% 44% 33% 26% 7% Welcome Viewable Email Links to Replicated Send to Social Sharing6. “State of the Internet—Australia,” ComScore, February 18, 2011. Email on Mobile Consistency Social Media Web Nav Friend© L2 2011 L2ThinkTank.com 17
  • 18. Digital iQ inDex ®: European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT US key finDinGS T O P 1 0 b r A n D S : fA c e b O O k ‘ L i k e S ’ T O P 1 0 : fA c e b O O k fA n PA G e G r O w T h (November 2011) excluding Pages with < 2,000 fans (September – November 2011) Zara 10,517,459 Jelmoli 228% L’Occitane H&M 8,668,408 101% (USA) Vente-Privée Lacoste 6,676,576 85% (Germany) Mango 2,706,273 Sarenza 73% (Italy) Sephora 2,059,363 L’Occitane 72% (Global) (Germany) Topshop 1,706,324 El Corte Inglés 72% 1,363,750 Vente-Privée ASOS 69% (Spain) L’OccitaneNew Look Retail 1,129,652 65% (France) 1,077,385 Vente-Privée Diesel 55% (Italy) United Colors 852,375 House of Fraser 47% of Benetton 0% % 0% 0% 0% % 0 0 0 0 0 00 00 00 00 00 50 0 ,0 10 15 20 25 0, 0, 0, 0, 00 00 00 00 00 ,0 2, 4, 6, 8, 10 © L2 2011 L2ThinkTank.com 18
  • 19. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USkey finDinGSSize vs. EngagementWinning on Facebook is no longer just about page size, it’s also fA c e b O O k c O m m U n i T y S i Z e v s . e n G A G e m e n T r AT e Sabout engagement. European specialty retail brands have made excluding Pages with < 2,000 fanshuge investments in fan growth and average more than 460,000 (November 2011)“likes” on Facebook. However, no retailer has achieved the elu-sive “tribe” status, balancing an above-average community sizewith above-average fan interaction. Marks & Spencer, FAMILIES TRIBESDiesel, and United Colors of Benetton are best positioned to The Body Shopreach this sweet spot combining scale and interaction. Yves Rocher ItalyFacebook heavyweights Zara, H&M, and Lacoste—all with Yves Rocher US KEY:communities of more than six million—had some of the lowestFacebook engagement rates at approximately 0.02%. = BRANDS NARROWING IN ON “tRIBES” CAtEGORIZAtION benetton’s product post garners a “like” Intimissimi interaction rate United Colors of .69% of Benetton Diesel Lacoste Marks Zara & Spencer H&M LeVeL Of enGAGemenT A store opening COHORTS CROWDS event post of photos has a SiZe Of cOmmUniTy “like” interaction rate of .12% note: Horizontal axis (Size of Community) is graphed on a logarithmic scale.© L2 2011 L2ThinkTank.com 19
  • 20. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USkey finDinGSThe in Crowd fA c e b O O k c O m m e r c e i n n O V AT i O nWhile there is increasing pressure to demonstrate rOI in % of brands employing the following:Facebook, only four brands in the Index—ASOS, Sephora,L’Occitane, and the Body Shop (USA)—leverage the platform tosell products. ASOS is particularly sophisticated, enabling usersto send shopping invitations to friends and providing currency 7% Full F-Commercepersonalization and product sharing. Zara and Marionnaud offerinteractive lookbooks and product catalogs on Facebook, buttransactions are consumated on the brands’ sites. 4% partial F-Commerce fAcebOOk cOmmerce SOPhiSTicATiOn 54% product Links 35% Links to E-Commerce page L’Occitane, Sephora, and The body Shop are experimenting with f-commerce© L2 2011 L2ThinkTank.com 20
  • 21. Digital iQ inDex ®: European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT US key finDinGS T O P 1 0 b r A n D S : m O S T D A i Ly T w e e T S b e S T i n T w e e T: T O P 1 0 T w i T T e r f O L LO w e r S T O P 1 0 b r A n D S : f O L LO w e r S A D D e D P e r D Ay (September–November 2011) (November 2011) (September–November 2011)Marks & Spencer 32 @hm 578,213 @hm 1,775 L’Occitane 24 @LACOSTE 357,802 @ASOS 752 Harrods 19 @Sephora 244,513 @Sephora 586 Topshop 14 @ASOS 231,269 @marksandspencer 569 Yves Rocher 14 @Topshop 227,687 @NETAPORTER 407 BrandAlley 13 @NETAPORTER 201,715 @Topshop 381House of Fraser 12 @LaRedouteFr 123,217 @LaRedouteFr 305 NET-A-PORTER 12 @HarrodsofLondon 65,353 @HarrodsofLondon 178 ASOS 11 @Selfridges 58,510 @hmunitedkingdom 129 Desigual 11 @hmusa 58,400 @Selfridges 122 0 0 0 0 0 0 0 5 10 15 20 25 0 0 0 0 0 20 40 60 80 00 00 00 00 00 1, 0, 0, 0, 0, 10 20 30 40 © L2 2011 L2ThinkTank.com 21
  • 22. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USkey finDinGS % O f b r A n D S U S i n G T h e f O L LO w i n G T w i T T e r TA c T i c SCustomer Service (September 2011)Eighty-five percent of European specialty retail brands maintain 63% 63%at least one twitter account. Although they largely use twitter 51%to converse with followers about retail news (product, store, 48%or general information), more than a third also use twitter as avehicle for customer service.Brands including House of Fraser, Marks & Spencer, and NEt- 24%A-POrtEr use their official twitter channels to respond to cus-tomer inquiries and complaints, while ASOS and Sephora havedeveloped customer service-specific accounts that scan officialpages for questions and comments. responding to customerservice inquiries appears to pay off—twitter handles that ad-dress these requests yield average followings of almost 60,000,compared with 16,000 for accounts that do not. @Replies Links to Social Media Retweets Pictures Videos in Tweet Stream ASOS and Sephoras A V e r A G e n U m b e r O f f O L LO w e r S by c O n T e n T T y P e dedicated customer service Twitter accounts (September–November 2011) USING 58,267 56,412 NOt USING 47,227 34,074 24,745 25,545 16,159 17,477 Contests Customer Service Events Deals/Offers© L2 2011 L2ThinkTank.com 22
  • 23. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USkey finDinGSiretailMore retailers have developed iPhone and iPad applicationsthan have created mobile-optimized sites, one of the most ba- m O b i L e A D O P T i O n by P L AT f O r msic and cost-effective mobile investments. Additionally, just one (November 2011)in five brands have established an app for the rapidly proliferat-ing Android platform.While iOS dominates, app sophistication lags. Only 39 percent 24% 20% 31%of iPhone and iPad apps are mobile-commerce enabled, and 47%less than half (46 percent) include a store locator. More surpris-ing, only 16 percent offer customer service information throughtheir iOS apps.Among the 24 percent of retailers with mobile-optimized sites,sophistication is high—the majority host a retail locator, aree-commerce enabled, and offer mobile site search. iPhone iPad Mobile-Optimized Android Site m O b i L e S i T e f e AT U r e S m O b i L e S i T e S O P h i S T i c AT i O n % of mobile-Optimized retailers employing the following: (November 2011) (November 2011) Retail Location Finder 80% M-Commerce 75% 9% Will not load 67% not Mobile-Optimized 24% Mobile-Optimized Mobile Site Search 75%© L2 2011 L2ThinkTank.com 23
  • 24. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USD i G i TA L P r O J e c T i O n S today tomorrow L2’s roadmap for navigating the past, present, and future of Yesterday European Specialty retail online marks & Spencer Topshop • French Connection Videos on site are embedded with scrolling Blogs well integrated into sites featuring product and twitter feeds harrods Brand Content Strong lookbooks, but lacking social-sharing shareable interactive content capability ASOS • L’Occitane • Sephora • Zara • Marionnaud The body Shop Shoppable lookbooks and product catalogs F-commerce Globus on Facebook, but directs to site to Facebook Monetization complete transaction No Facebook page ASOS Lacoste Personal styling advice via Skype Gerard Darel • Intimissimi • Live chat and scheduling for customer Customer Service service calls Sandro Only phone and email neT-A-POrTer In addition to e-commerce-enabled app, New Look • BrandAlley launched a Fashion’s Night Out specific app Sephora E-commerce-enabled iPhone apps; no to give customers a storefront experience iOS Experience Best-in-class iOS apps in the U.S. market, but presence on iPad yet not customized for, or available, in Europe h&m kookai Largest twitter and Youtube followings; most Small brand, but present on Facebook, twitter, sophisticated Google+ Social Media Presence Globus Youtube, Google+, tumblr, and Instagram None h&m La redoute Virtual dressing room allows shoppers to Cross-sells on product pages based on design custom looks Triumph editorial and client recommendations Product Presentation Static product pages© L2 2011 L2ThinkTank.com 24
  • 25. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USfLASh Of GeniUS The virtual dressing room lets shoppers design a custom lookVirtual Fitting roomthe Swedish retailer’s e-commerce enabled site features aninteractive virtual dressing room coupled with sophisticatednavigation. the dressing room allows shoppers to style amodel of their choice from head to toe, including shoes andaccessories. the model’s hairstyle, pose, and background arealso customizable, and the final look can be saved or sharedon Facebook, twitter, email, and blogs.this focus on product persists outside of the fitting room.H&M’s site features interactive and video-enhanced lookbooksfor its collection, as well as product pages equipped with Product sectionsadvanced filtering and sorting. are easily filtered and sorted The site features sophisticated interactive lookbooks of new collections© L2 2011 L2ThinkTank.com 25
  • 26. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USfLASh Of GeniUS Zara customers are invited to submit photos featuring at least two items from the currentuser-Generated ‘pEOpLE!’ Campaign collection for the chance to win €300Zara’s integrated Facebook and site campaign ‘PEOPLE!’invites brand enthusiasts worldwide to submit photos ofthemselves wearing at least two items from the retailer’s currentcollection. Several photos are chosen each week and featuredon the brand site and a dedicated Facebook tab, and the self-styled models in each selected shot receive €300. the photosare shareable via twitter and Facebook, and users can add theproducts featured directly to their shopping carts.the campaign has helped fuel Zaras impressive Facebook fangrowth: thirty percent over the past six months, an average ofalmost 12,000 new fans per day. Looks are shoppable directly from the photos The campaign’s custom facebook tab features photos of the week and past photo selections© L2 2011 L2ThinkTank.com 26
  • 27. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USfLASh Of GeniUSBespoke E-CommerceMarks & Spencer allows customers to create bespoke itemsof clothing from its men’s and women’s collections online. marks & SpencerMen can self-tailor jeans, chinos, and shirts, while women can allows shopperscustomize jeans, black dresses, and black formal trousers. to customize six products onlinethe men’s “made-to-measure shirts” feature is by far the mostcomprehensive, allowing shoppers to select fabrics, as well asnine different design elements including collar and cuff styles.Women’s black dresses can be customized by style, sleeve, andhem length.In addition M&S tV houses a vast collection of shareable videos.A shoppable scrolling feed displays the products featured in avideo as it plays, and a pop-up shows a complete product list atthe end. Christmas videos are also embedded with a scrollingtwitter feed of Marks & Spencer holiday-related mentions. The m&S TV library houses videos with sophisticated features such as shoppable product lists and Twitter feeds© L2 2011 L2ThinkTank.com 27
  • 28. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USfLASh Of GeniUS The Selfridges “Project Ocean” facebook pageproject OceanIn May, Selfridges launched “Project Ocean,” an activistinitiative to raise awareness of overfishing. the campaignsuccessfully integrates offline and online elements with adedicated Facebook page, twitter handle, and microsite. In thespring, Selfridges turned the windows of its Oxford Street storein London into an interactive touch-screen display of the ocean.For every donation, another fish was added to the sea, andshoppers could interact with the installation by clicking the fishto view the species and the name of the donor.A similar interactive ocean feature is housed on the micrositeto display campaign donations. the online content is shareablevia Facebook and twitter, and donations can also be madeusing SMS; to date, £120,279 has been raised. The interactive online ocean displays a fish for every donation© L2 2011 L2ThinkTank.com 28
  • 29. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USfLASh Of GeniUS Visitors to the http://lamachinel1212. com/ microsite were invited to custom design a video showing the virtual transformation of the L.12.12 polo shirt into a fragranceL.12.12 Launchto celebrate the launch of its flagship men’s scent collection,EAU DE LACOStE L.12.12, Lacoste commissioned a lightinstallation from design agency tronic that was displayed inNew York’s Grand Central terminal from September 19 to 27. Adedicated microsite solicited user-generated video sequencesthat animated a virtual transformation of the classic L.12.12polo shirt into a fragrance bottle.Visitors to the microsite could customize their video sequencewith their name, location, a background theme, and color oftheir choosing. the 20-second videos were projected onto theGrand Central terminal installation and streamed live on themicrosite. Video contributors were emailed their projection timeso they could visit Grand Central to view them in person or tunein via the live stream.During the campaign, 35,000 user-generated videos wereprojected. Lacoste promoted the project on Facebook byholding a fan-exclusive contest to win a trip to the La MachineL.12.12 launch party in Grand Central terminal. Thirty-five thousand user-generated video sequences were displayed on the La machine L.12.12 light installation© L2 2011 L2ThinkTank.com 29
  • 30. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USfLASh Of GeniUS‘Arrive Half naked— Leave Fully Dressed’In June, Desigual held a promotion that aptly reflected itsunconventional style. the retailer held identical events at theDesigual stores in London, Stockholm, Berlin, Madrid, Prague,and New York during which the first 100 people to line up intheir underwear before the store opened could choose one topand one bottom for free. Everyone else received 50 percentoff the summer collection as a consolation prize. the retailerencouraged participants to take photos on Instagram and tagthem #desigualevents. Videos promoting and covering the Desigual encouragedundressed are the most viewed on desigual’s Youtube channel. participants to tag instagram photos with #desigualevents Videos covering the “Arrive half naked— leave fully dressed” campaign are the most viewed on Desigual’s official youTube channel© L2 2011 L2ThinkTank.com 30
  • 31. Digital iQ inDex ®:European Specialty Retail Want to know more about your brand’s ranking? cOnTAcT USTeAmScOTT GALLOwAy Before joining L2, Maureen was with triage Consulting Group and magazine, and Zagat. Danielle has a B.S. in Systems Engineer-clinical Professor of marketing, nyU Stern led managed care payment review and payment benchmarking ing from the University of Virginia and an M.B.A. from NYU Stern.founder, L2 projects for hospitals, including UCLA Medical Center, UCSF, and HCA. Maureen has a B.A. in Human Biology from Stanford Univer- chriSTine PATTOnScott is a Clinical Professor at the NYU Stern School of Business sity and an M.B.A. from NYU Stern. creative Director, L2where he teaches brand strategy and luxury marketing and is thefounder of L2, a think tank for prestige brands. Scott is also the Christine is a brand and marketing consultant with more thanfounder of Firebrand Partners, an operational activist firm that freD brOwn 15 years of experience creating brand identities and marketinghas invested more than $1 billion in U.S. consumer and media brand Translation expert, Last exit communications for aspirational and luxury brands. As creativecompanies. In 1997, he founded red Envelope, an Internet- director of L2, she leads the translation of the L2 brand across Fred is managing director of Last Exit’s London office where hebased branded consumer gift retailer. In 1992, Scott founded all touchpoints, with a particular focus on the visual packag- leads web, social media, mobile, SEO, and eDM projects forProphet, a brand strategy consultancy that employs more than ing of L2’s research. She began her career at Cosí, where she clients, including Belvedere, MediaCom, F&F, and numerous120 professionals in the United States, Europe, and Asia. Scott developed the brand and oversaw its evolution from concept medical, aerospace, and logistics brands. He began his careerwas elected to the World Economic Forum’s “Global Leaders of through growth to 100 restaurants. Since then she has provided as an industrial designer, working on such projects as the Airbustomorrow,” which recognizes 100 individuals under the age of 40 creative direction for a wide array of clients, including the launch A380, Panasonic cell phones, and Polaroid cameras. In 1999,“whose accomplishments have had impact on a global level.” of Kidville and CosmoGIrL! magazine. Christine received a B.A. Fred launched award-winning new media agency Deepend’s firstScott has served on the boards of directors of Eddie Bauer North American office in New York with fellow Last Exit partner in Economics and Journalism from the University of Connecticut(Nasdaq: EBHI), the New York times Company (NYSE: NYt), Nuri Djavit. together, they led digital projects for clients, including and an M.B.A from NYU Stern.Gateway Computer, eco-America, and UC Berkeley’s Haas School FIt, Kenneth Cole, and Salomon Smith Barney. He has a Firstof Business. He received a B.A. from UCLA and an M.B.A. from Class Honours Degree from London South Bank University and JeSSicA brAGAUC Berkeley. has served on the board of British Design Innovation. L2 Fred was assisted in the study by Daniel Saxton, a Senior Jessica, a freelance art director, specializes in identity, iconog-VérOniqUe VALcU Creative at Last Exit experienced in multi channel pan-European raphy, event graphics, and invitations. She began her careerL2 digital work for brands in the fashion and retail sectors. in fashion, designing textiles and prints at Elie tahari’s studioVéronique began her career in Deloitte Consulting’s Strategy & in New York City, and then focused on the Elie tahari brandOperations practice where she worked with some of the world’s emiLy hALLqUiST aesthetic and consistency in design across its many developinglargest corporations in retail, manufacturing, and pharma. L2 disciplines. Desiring to explore other facets of design, she wentWhile there, she conducted extensive social media analyses of on to become the art director of a small, prestigious design firm Emily is a research associate at L2 where she works with the in Chelsea, where she focused on event graphics, digital andconsumer-facing brands and contributed to the firm’s growing research team on the Digital IQ Index® reports. Her background print collateral, and brand aesthetics for companies both largeinterest in the space. Post Deloitte, she moved to the Winterberry is in international relations, and she interned last year with Inter- and small. Jessica holds a B.F.A. in Graphic Design, and anGroup where she performed strategic consulting for advertising national Business-Government Counsellors (IBC) in Washington, A.A.S. in Illustration from rochester Institute of technology.and marketing services companies. At L2, Véronique serves as D.C.. At IBC, she assisted on client engagements pertaining tothe Specialty retail and European research lead. their global operations. Emily received a B.A. in Public Policy withShe received her B.A. in Communications from the University minors in Earth and Ocean Sciences and Political Science from AArOn bUnGeof Pennsylvania. Duke University. L2 Aaron is a freelance graphic designer who specializes in printmAUreen mULLen r. DAnieLLe bAiLey design, branding and identity, packaging, and web design. HisL2 L2 approach is both aesthetic and functional, characterized by clear, intelligent design appropriate to the project at hand. He beganMaureen leads L2’s research and advisory practice where she Danielle began her career at the Home Depot, Inc., where she his career tailoring projects for the Chinese, Australian, andhelped develop the Digital IQ Index®. She has benchmarked the led a variety of internal consulting engagements focused on U.S. markets across multiple design disciplines and in multipledigital marketing, e-commerce, and social media efforts of more supply chain, merchandising, and in-store process improvement. languages. Aaron has a B.F.A. in Graphic Design from Iowa Statethan 300 brands across pharma, auto, luxury, specialty retail, She went on to manage the implementation of award-winning University.beauty, and the public sector. Maureen also has led digital strategy mobile initiatives for several large media clients, including theconsulting engagements for a variety of Fortune 1000 clients. New York times Company, NBC Universal, Disney/ABC, Maxim© L2 2011 L2ThinkTank.com 31
  • 32. upCOMinG EVEnTS L2 clinic MobileL2 is a think tank for digital innovation. 01.19.12 new york cityWe are a membership organization that brings together thought leadership 01.24.12 Parisfrom academia and industry to drive digital marketing innovation. L2 Lunch Identifying Facebook Super FansrE S E Ar C H 02.23.12 new york cityDigital iq index®: the definitive benchmark for online competence, Digital IQ Index® reports scorebrands against peers on more than 350 quantitative and qualitative data points, diagnosing their L2 clinic Mobile in APACdigital strengths and weaknesses. 03.02.12 ShanghaiEVEnT Sforums: Big-picture thinking and game-changing innovations meet education and entertainment. L2 Lunch Google+ vs. Facebookthe largest gatherings of prestige executives in North America. 03.06.12 Paris300+ attendeesclinics: Executive education in a classroom setting with a balance of theory, tactics, andcase studies.120 –150 attendees upCOMinG rESEArCHworking Lunches: Members-only lunches led by digital thought leaders and academics. DiGiTAL iq inDex® reports: PreSTiGe 100® reports:topic immersion in a relaxed environment that encourages open discussion. Hospitality Mobile IQ40 – 60 attendees Broadcast Media Brazil, Russia, India Magazines Facebook IQmbA mashups: Access and introduction to digital marketing talent from top business schools.COn SuLT inG upCOMinG MEMBEr BEnEFiTSAdvisory Services: L2 works with brands to garner greater return on investment in digital initiatives.Advisory work includes Digital roadmaps, Social Media Strategy, and Site Optimization engagements. Members Site: in the first quarter L2 will launch real-time tracking of digitalME MB E r S Hip metrics (vs. peers).for membership info and inquiries: membership@L2ThinkTank.com
  • 33. A Think TAnk for DiGiTAL innOVATiOn 51 East 12th Street, 2nd Floor New York, NY 10003 w: L2ThinkTank.com e: info@L2ThinkTank.com© L2 2011 L2ThinkTank.com