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Pdf specialty retaildigitaliq2011


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Очень интересное исследование, которое относится, правда, к сфере В2С... Оригинал исследования можно взять здесь -, но для просмотра требуется регистрация...

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Pdf specialty retaildigitaliq2011

  1. 1. ® Specialty SCOTT GALLOWAY NYU Stern Retail A U G U S T 2 3 , 2 0 11 A Think TAnk for DiGiTAL innOVATiOn© L2 2011
  2. 2. DiGiTAL iQ Index ®: Specialty Retail Want to know more about your brand’s ranking? COnTACT US inTRODUCTiOninfluenceDigital platforms continue to garner greater influence over commerce, on and offline.More than 97 percent of consumers report that social media affects at least some of their purchasing decisions.1Seventy-nine percent of smartphone owners use their devices while shopping, and 70 percent of consumers look atproduct reviews before making a purchase. C h A n G e i n 2 0 1 0 & 2 0 1 1 D i G i TA L i q v s . Furthermore, Google reports that the average consumer is ChAnGe in 2009 & 2010 FiSCAL ReVenUeS discernibly influenced by 10.4 discrete pieces of information, (N=35) up from 5.3 sources just a year ago.2 The implications are significant as retailers confront an increasingly crowded, 40% and dynamic consideration set. Threat 20% To date, the digital strategy for most retailers has been selec- 2009-2010 Revenue Growth tion, convenience, and lower prices. This strategy favors scale, and one firm, Amazon, is a giant whose expansion has starved any retailer in its path. In the first quarter of 2011, Amazon grew three times faster than other retail e-commerce sites and nearly -40% -20% 0% 20% 40% five times the rate of overall retail. Constituting one-third of the U.S. e-commerce market, the digital native is a threat to retail- ers ranging from Wal-Mart to Williams-Sonoma.3 Amazonian -20% infrastructure investments, made possible by an exceptionally low cost of capital, bring new meaning to the term “disruptive.” Source: Corporate 10ks, -40% Annual Reports. 1. “In Hot Pursuit: What makes people want to follow a brand?,” Andy Wibbels, Get Satisfaction, June 29, 2011. 2. “ZMOT: Winning the Zero Moment of Trust,,” Jim Lecinski, May 24, 2011. Change in Digital IQ 3. “ The Hidden Empire,“ Stéphane Distinguin, faberNovel, May 2011. (Percentile Rank) © L2 2011 2
  3. 3. DiGiTAL iQ Index ®:Specialty Retail Want to know more about your brand’s ranking? COnTACT USinTRODUCTiOnWhat to Do?Historically, specialty retailers have differentiated themselves from R e L AT i O n S h i p b e T w e e n 2 0 1 1 D i G i TA L i q & R O i Clow-cost peers by establishing an aspirational environment, edited (N=29)selection, and top-shelf service, all mixed with traditional mediaspend. The offline strategy is still the right one, but the tactics and 80%weapons have changed. Brands that are thriving are engaging inconversations directly with their customers on social media platforms,creating new and interesting ways to purchase online, and building 60%innovative mobile apps to augment the shopping experience.Change 40%In our second annual Digital IQ Index®: Specialty Retail, mobile andsocial platforms took on a new level of importance. As a result, none 20%of the companies ranked Genius in 2010 maintained their status. 2010 ROIC (%)The dynamic nature of the medium rewards risk-takers and pun-ishes complacency as evidenced by several brands ascending or 0%falling dramatically in this year’s study. 40 60 80 100 120 140 160Digital iQ = Shareholder Value -20%Our thesis is that shareholder value is inextricably linked to digitalcompetence. In the 2010 Study we speculated that Digital IQ “may bea forward-looking indicator of revenue growth.” Brands’ total reported -40%revenues in 2010 confirm our thesis. In addition, there is evidence ofa positive relationship between Digital IQ and return on invested capi-tal (ROIC). We hope this study continues to help managers prioritize -60%efforts and allocate capital to generate the greatest return. Pleasecontact me at with questions or comments. -80%Regards, 2011 Digital IQ Source: Corporate 10ks, Annual Reports.SCOTT GALLOwAyFounder, L2 | Clinical Professor of Marketing, NYU Stern© L2 2011 3
  4. 4. DiGiTAL iQ Index ®: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 Site - 30%: C AT e G O R i e S Effectiveness of brand site. FunCTiOnALiTY & COnTenT - 75%: 140+ Genius • Technology Digital competence is a point of differen- • navigation & product/Site Search tiation for these retailers. Site content is • Social Media integration searchable, shareable, and mobile-opti- • Customer Service & Store Locator (when applicable) mized. Social media efforts complement • product page wider digital strategy. Virtual storefront • Checkout seamlessly extends to mobile. • Account BRAnD TRAnSLATiOn - 25%: 110-139 Gifted • Aesthetics • Messaging & Visuals Brands are experimenting and innovating across site, mobile, and social platforms. Digital presence is consistent with brand Digital Marketing - 30%: image and larger marketing efforts. Marketing efforts, off-site brand presence, and visibility on search engines. • Search: Traffic, SEM, SEO, Web Authority 90-109 Average • Advertising & innovation: Display, Retargeting, Recent Brand Initiatives, Presence on Tumblr • blog & Other User-Generated Content: Mentions, Sentiment Digital presence is functional yet predict- • email: Frequency, Content, Social Media Integration, Promotion able. Efforts are often siloed across platforms. Social Media - 20%: Brand presence, community size, content, and influence on major social media platforms. 70-89 Challenged • Facebook: Likes, Growth, Tabs & Applications, Responsiveness, Interaction Rate Inconsistent adoption of mobile and social • Twitter: Followers, Growth, Frequency, Online Voice media platforms. Site lacks inspiration. • youTube: Views, Number of Uploads, Subscriber Growth, Viral Videos <70 Feeble Mobile - 20%: Investment does not match opportunity. Compatibility and marketing on smartphones and other mobile devices. • Mobile Site: Compatibility, Functionality, Transaction Capability • iOS Applications (both iphone & ipad): Availability, Popularity, Functionality, iPad Differentiation • Other platforms (Andriod, blackberry): Availability, Popularity, Functionality • innovation: SMS, Geolocal, Recent Brand Initiatives© L2 2011 4
  5. 5. DiGiTAL iQ Index ®: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 Accessories Apparel Beauty Department E-tailer Flash Sale Home Watches & Skincare Store Furnishings & Jewelry Rank Retailer Category Digital iQ Class Description Strong social media and the “Magic of Macy’s” mobile site crowns the venerable department 1 MACYS Department Store 150 Genius store #1 2 ViCTORiAS SeCReT Apparel 145 Genius A Facebook community 14 million strong and growing Uber responsive Twitter account and robust mobile site stand out; site redesign embraced risk— 3 nORDSTROM Department Store 143 Genius and it paid off 4 SePHORA Beauty & Skincare 136 Gifted Content-rich digital platform caters to beauty-loving customer base 4 uRBAn OuTFiTTeRS Apparel 136 Gifted A slick and dynamic digital platform bolsters efforts of this hip retailer 6 THReADLeSS.COM e-tailer 133 Gifted More than 1.6 million Twitter followers are base of new retail model Closet Confession: Email-gated sales and responsive customer service feed our fashion 7 BLueFLY e-tailer 132 Gifted obsession 8 BLOOMinGDALeS Department Store 131 Gifted Little (digital) brown bag delivers 8 GiLT GROuPe Flash Sale 131 Gifted Gold standard in flash sales 8 neT-A-PORTeR e-tailer 131 Gifted Interactive “live” map allows fashionistas to monitor peers’ shopping bags across the globe 8 POTTeRY BARn Home Furnishings 131 Gifted Video-rich site brings home décor to life 12 neiMAn MARCuS Department Store 130 Gifted Robust email marketing; fans rave over photo albums 13 SAKS FiFTH AVenue Department Store 124 Gifted Rich product pages coupled with a newly active Twitter feed bolster IQ© L2 2011 5
  6. 6. DiGiTAL iQ Index ®: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 Accessories Apparel Beauty Department E-tailer Flash Sale Home Watches & Skincare Store Furnishings & Jewelry Rank Retailer Category Digital iQ Class Description 14 iKeA Home Furnishings 123 Gifted More than 500,000 unique visitors monthly 14 RALPH LAuRen Apparel 123 Gifted Digital legacy is bolstered by brand’s 3.5 million + Facebook fans Strong customer service and store locators, but a comprehensive video experience would bring 16 CRATe & BARReL Home Furnishings 121 Gifted it all home 17 BROOKS BROTHeRS Apparel 119 Gifted Rewards loyal followers with premium branded content 17 WiLLiAMS-SOnOMA Home Furnishings 119 Gifted Immersive site, growing mobile footprint, and active email marketing 19 AnTHROPOLOGie Apparel 118 Gifted Craftily curated content is indigenous to this brand’s beautiful site 19 TiFFAnY & CO. Watches & Jewelry 118 Gifted A jewel of a mobile app and smart digital cross promotion 21 Rue LA LA Flash Sale 117 Gifted Android app pays dividends 22 A|X ARMAni eXCHAnGe Apparel 116 Gifted Branded content seamlessly integrated into social media provides an everyday getaway 22 BeRGDORF GOODMAn Department Store 116 Gifted “Faces of 5F” was a hit, but needs to improve mobile 22 COACH Accessories 116 Gifted Meets standard on every platform, but needs to innovate to return to Genius class 25 BATH & BODY WORKS Beauty & Skincare 115 Gifted Two million Facebook fans, but dated site disappoints 25 DieSeL Apparel 115 Gifted Strong premium content, mobile site, and digital marketing© L2 2011 6
  7. 7. DiGiTAL iQ Index ®: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 Accessories Apparel Beauty Department E-tailer Flash Sale Home Watches & Skincare Store Furnishings & Jewelry Rank Retailer Category Digital iQ Class Description 27 LOCCiTAne Beauty & Skincare 112 Gifted Provençal charm should extend to mobile 28 BAnAnA RePuBLiC Apparel 108 Average Admirable foray into F-commerce 28 BARneYS neW YORK Department Store 108 Average The Window provides welcome glimpse into the world of Barneys 28 CHiCOS Apparel 108 Average Solid effort, but still in search of a Twitter strategy 31 BeBe Apparel 106 Average VaVaVoom contest was sexy, confident, and cool 31 JuiCY COuTuRe Apparel 106 Average Static site brings the brand down 33 SHOPBOP e-tailer 104 Average We don’t <3 absence of a mobile experience 34 LuLuLeMOn ATHLeTiCA Apparel 103 Average Hyperlocal social media strategy works; needs to bring the experience to mobile 34 WeST eLM Home Furnishings 103 Average “Simple products for modern living” and an outdated digital footprint 36 HAuTeLOOK Flash Sale 102 Average Average 37 Ann TAYLOR Apparel 101 Average Three Tumblrs and photocentric Twitter handle create tailored social footprint 38 7 FOR ALL MAnKinD Apparel 98 Average Twitter followers grew 55 percent in June alone 38 BLue niLe e-tailer 98 Average Dated site for a child of the medium© L2 2011 7
  8. 8. DiGiTAL iQ Index ®: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 Accessories Apparel Beauty Department E-tailer Flash Sale Home Watches & Skincare Store Furnishings & Jewelry Rank Retailer Category Digital iQ Class Description 38 J. CReW Apparel 98 Average A digital experience in need of a more colorful social media voice 41 ABeRCROMBie & FiTCH Apparel 97 Average Cannot rely on models alone; Twitter reactivation would be fitting 41 LORD & TAYLOR Department Store 97 Average F-commerce is a positive first step for the nation’s oldest department store 43 CARTieR Watches & Jewelry 96 Average Good-looking, but faulty site mechanics WHiTe HOuSe | 44 Apparel 95 Average Uninspired BLACK MARKeT 45 iDeeLi Flash Sale 94 Average Flash sale brand should have a mobile site 45 SWAROVSKi Watches & Jewelry 94 Average Social media properties shimmer, but site has lost its sparkle 47 LuSH Beauty & Skincare 92 Average Strong site, but limited mobile presence 47 SWATCH Watches & Jewelry 92 Average Multi-site e-commerce navigation lacks intuition 49 FRenCH COnneCTiOn Apparel 89 Challenged YouTube channel is trés formidable! 50 TALBOTS Apparel 87 Challenged Infrequent tweeting weakens IQ Facebook growth fueled by exclusive offers is a bright spot amid an otherwise unimpressive 51 ReSTORATiOn HARDWARe Home Furnishings 85 Challenged showing 52 ZALeS Watches & Jewelry 83 Challenged Enhancing mobile and YouTube offering would help© L2 2011 8
  9. 9. DiGiTAL iQ Index ®: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 Accessories Apparel Beauty Department E-tailer Flash Sale Home Watches & Skincare Store Furnishings & Jewelry Rank Retailer Category Digital iQ Class Description The Poets Club hit a mark, but not enough to compensate for an otherwise static digital 52 RuGBY Apparel 83 Challenged experience 54 One KinGS LAne Flash Sale 82 Challenged Fixer-upper: Curated showcases could use more interactive material 55 THe BODY SHOP Beauty & Skincare 81 Challenged More vocal Twitter handle could provide a stronger voice for cause-marketing efforts 56 COLe HAAn Accessories 79 Challenged Sporadic tweeting and limited social sharing feel manufactured 56 GYMBORee Apparel 79 Challenged Digital marketing efforts are childlike 58 eTHAn ALLen Home Furnishings 76 Challenged Small but mighty Facebook page signals potential 58 TuMi Accessories 76 Challenged Mobile is a must-have 60 STuART WeiTZMAn Accessories 73 Challenged Product videos won’t stop well-heeled clientele from moving to competitors’ sites 61 inTeRMiX Department Store 72 Challenged Beyond Best Dressed…in the wrong direction 61 LuCKY BRAnD Apparel 72 Challenged An unfortunate digital presence 63 CLuB MOnACO Apparel 61 Feeble Still not e-commerce enabled 64 TOuRneAu Watches & Jewelry 43 Feeble Clock is ticking before getting completely left behind© L2 2011 9
  10. 10. DiGiTAL iQ Index ®: Specialty Retail Want to know more about your brand’s ranking? COnTACT US key 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 Class in the Company of Genius Only three brands , Macy’s, Victoria’s Secret, and Nordstrom , GeniuS Macy’s DiGiTAL iQ Victoria’s Secret achieved Genius status in this year’s Index. Genius brands bal- >140 Nordstrom 5% ance digital investments across platforms including strong mo- Sephora Brooks Brothers bile offerings, integrated social media, and robust e-commerce Urban Outfitters Williams- GiFTeD Sonoma marketing tactics. These investments pay dividends, as Genius Anthropologie Bluefly brands demonstrate greater average time on site by users and Bloomingdales Tiffany & Co. increased repeat visitors. Gilt Groupe Rue La La NET-A-PORTER A|X Armani DiGiTAL iQ In this year’s Index, 70 percent of retailers fell within the Gifted Exchange 37% Pottery Barn Bergdorf 110-139 or Average categories. In contrast, in the 2010 Index seven Neiman Marcus Goodman Saks Fifth Coach brands notched Genius status, but less than half (49 percent) Avenue Bath & Body were categorized as Gifted or Average. As this shift indicates, IKEA Works sophisticated multi-platform presence has become more Ralph Lauren Diesel Banana Blue Nile Crate & Barrel L’Occitane Republic J. Crew commonplace, making it increasingly difficult for brands in the AVeRAGe Barneys New Abercrombie & Specialty Retail sector to utilize digital as a point of competitive York Fitch Chico’s differentiation. Lord & Taylor bebe Cartier The only Feeble brands, Tourneau and Club Monaco, have yet Juicy Couture White House | DiGiTAL iQ to embrace e-commerce. 33% Shopbop Black Market 90-109 Lululemon ideeli Athletica Swarovski west elm LUSH AVeRAGe TiMe On SiTe & SiTe ViSiTS HauteLookOn average, Swatch p e R U S e R by D i G i TA L i q C L A S Susers spend Ann Taylormore time on, (N=64) 7 For All French The Body Shopand visit more Connection Cole Haan CHALLenGeD Mankindfrequently, sites Digital iQ Class Avg. Time on Site Site Visits per user Talbot’s Gymboreewith higher (minutes) (visits) RestorationDigital IQs Ethan Allen DiGiTAL iQ GeniuS 6:54 9.1 Hardware Tumi 22% Zales 70-89 GiFTeD 4:48 6.9 Stuart Rugby Weitzman One Kings Lane Intermix AVeRAGe 4:36 6.5 Lucky Brand CHALLenGeD 4.30 7.1 FeeBLe DiGiTAL iQ Club Monaco FeeBLe 2:30 3.5 <70 Tourneau 3% Source: Alexa. © L2 2011 10
  11. 11. DiGiTAL iQ Index ®:Specialty Retail Want to know more about your brand’s ranking? COnTACT USkey FinDinGS in the Company of Genius Macy’s: Responsive Twitter handle balances premium content, customer service, and QR marketing to attract followers Macy’s: Engaging and innovative Facebook tabs make the Macy’s page a social destination Macy’s: Apps enable crossplatform m-commerce while retaining brand consistency© L2 2011 11
  12. 12. DiGiTAL iQ Index ®:Specialty Retail Want to know more about your brand’s ranking? COnTACT USkey FinDinGS in the Company of Genius well-Managed Digital Footprint: Interactive style sheets with curated e-commerce, slick premium content, videos, and Facebook sharing Victoria’s Secret: F-commerce opportunity creates a storefront visible to over 700 million Facebook Victoria’s Secret: iPad app provides the mobile portal for dynamic branded content© L2 2011 12
  13. 13. DiGiTAL iQ Index ®:Specialty Retail Want to know more about your brand’s ranking? COnTACT USkey FinDinGSThe Department Store Strikes Back A V e R A G e D i G i TA L i q S C O R e by C AT e G O R y 2010 vs. 2011The average Digital IQ of the Department Store categoryjumped 14 points from 2010, closely trailing that of digitally 170native E-tailers for the highest Digital IQ. Digital strides mirrorthe revitalization in the category as, for the first time in more Geniusthan a decade, Department Stores grew retail market share.4The Watches & Jewelry and Accessories categories continue 140to be the worst performers, averaging Digital IQs of 88 and86, respectively. However, both categories vastly improved as 2011 AVG. IQ Giftedbrands began making investments in social media. 2011 AVG. IQ 120 119 2010 AVG. IQ 2010 AVG. IQ 112 2011 AVG. IQ 110 2011 AVG. IQ 117 107 105 2011 AVG. IQ 2011 AVG. IQ 103 Average 2010 AVG. IQ 108 105 2010 AVG. IQ 2011 AVG. IQ 90 88 2010 AVG. IQ 2011 AVG. IQ 94 2010 AVG. IQ 96 86 91 Challenged 70 2010 AVG. IQ 69 2010 AVG. IQ Feeble 56 30 E-tailer Department Home Beauty Flash Sale Apparel Watches Accessories Store Furnishings & Skincare & Jewelry4. “Dowdy Department Stores Start Looking Cool Again,” Elizabeth Holmes and Ann Zimmerman, Wall Street Journal, August 4, 2011.© L2 2011 13
  14. 14. DiGiTAL iQ Index ®:Specialty Retail Want to know more about your brand’s ranking? COnTACT USkey FinDinGS T O p F i V e : G R e AT e S T y e A R - O V e R -y e A R G A i n O R LO S S 2010 vs. 2011 Digital iq percentile Rank L’Occitane A|X Armani exchange ChALLenGeD GiFTeD -32% GeniUS GiFTeD Concentrated investment in engaging social media programs and premium branded content push this brand to Gifted. +28% While still digitally-apt, returning to Genius will require a heightened focus on digital marketing efforts to push innovation. Gilt Groupe Coach AVeRAGe GiFTeD -33% GeniUS GiFTeD Consistent incremental investments in mobile (across devices and platforms) and social media growth help Flash Sale giant differentiate itself. +24% Still strong, but air is thin in Genius class. Maintaining pace means falling behind. Bloomingdale’s J.Crew AVeRAGe GiFTeD -38% GiFTeD AVeRAGe Continued focus on delivering a unique mobile experience bolstered brand’s ranking. +22% Strong e-commerce retailer needs greater cross-channel innovation to return to Gifted. Chico’s LuSH ChALLenGeD AVeRAGe -40% AVeRAGe AVeRAGe Introduction of a mobile site and growth in Facebook community helped bring this retailer in line with its peers. +19% Still-genius e-commerce site isn’t enough to help brand retain rank on a balanced digital scorecard. Brooks Brothers The Body Shop AVeRAGe GiFTeD -55% GiFTeD ChALLenGeD Fighting across multiple fronts. Launches of mobile site, app, YouTube channel, Twitter handle, and blog catapult brand from Average to Gifted. +19% One of 2010’s social media leaders now posts average scores across platforms. Has yet to invest in mobile.© L2 2011 14
  15. 15. DiGiTAL iQ Index ®:Specialty Retail Want to know more about your brand’s ranking? COnTACT US S i T e F e AT U R e A D O p T i O nkey FinDinGS % of Sites with the Following Tools 2010 vs. 2011 (June 2011)Social Sites 52% 48%Adoption of social features such as product sharing, user 44%reviews, and live chat functionality has increased significantlysince 2010. Although most specialty retailers continue to evolve 37% Feature Adoption (%)their site experience, there is still a clear disparity between the 32% 31% 28%sites of brands classified as Genius and Gifted and those oflower IQ classes. Specifically, product videos, video shareability, 23%and Facebook Connect offer opportunities for differentiation.Sites that featured social sharing for products experienced 3.6 = 2011percent growth in site traffic, versus 0.3 percent for those that = 2010have yet to adopt this feature. 0% Product Tweet Product Like User Reviews Live Chat i M pA C T O F S i T e F e AT U R e A D O p T i O n “ Smart brands should be conducting research as to who are their most profitable customers. Hint: They’re Three-Month Growth for Sites with & without the Following Features: not always the ones with the most Facebook friends (July 2011) or Twitter followers. Take a look at how social sharing is driving commerce. Almost all brands have social sharing on their websites 3.8% Site Traffic Growth (%) 3.6% to drive traffic and commerce, but very few, if any, know exactly how social sharing is leading to these conversions—and which customers = SITES WITH or visitors are driving the most conversion. ” = SITES WITHOUT —Michael Lazerow | CEO, Buddy Media 1.1% 0.3% 0% Source: Alexa. Social Sharing User Reviews© L2 2011 15
  16. 16. DiGiTAL iQ Index ®:Specialty Retail Want to know more about your brand’s ranking? COnTACT USkey FinDinGSemail: Alive & KickingAlthough the time consumers spent on email in general w e e k Ly e M A i L F R e q U e n C y by C AT e G O R ydeclined nine percent year-over-year,5 every category with the 2010 vs. 2011exceptions of Watches & Jewelry and Apparel increased itsfrequency of weekly emails, suggesting that the medium is stillone of the strongest call-to-action marketing tactics. As was the Flash Sale 8.0case last year, Flash Sales, Department Stores, and E-tailers 7.6register the highest email frequency, respectively, possibly as aresult of their high inventory turnover rates. = 2011 Department 5.3 Store = 2010 4.5 4.8 E-tailer 3.1 Home 3.1 Furnishings 2.1 2.2 Apparel 2.7 Beauty & 2.1 Skincare 1.7 0.9 Accessories 0.7 Watches & 0.7 Jewelry 1.0 0 1 2 3 4 5 6 7 85. “Email Evolution: Web-based Email Shows Signs of Decline While Mobile Email Usage on the Rise,” comScore, January 20, 2011.© L2 2011 16
  17. 17. DiGiTAL iQ Index ®:Specialty Retail Want to know more about your brand’s ranking? COnTACT USkey FinDinGS R e F e R R A L & D e S T i n AT i O n S i T e S F O R S p e C i A LT y R e TA i L S i T e S Upstream and Downstream Traffic to and from Facebook, Competitor, e-Commerce, & Sister SitesHere Comes everyone (June 2011)Apart from search engines, Facebook is the leading source of Upstream Traffic Downstream Traffic To Brand Site From Brand Siteboth upstream and downstream traffic to and from nearly everyretailer’s site.6 In our study, Facebook accounted for a whop-ping 41 percent of upstream traffic to 100% 98% 95%Competitor and sister sites had a nearly identical share of = FACEBOOKupstream and downstream traffic. Third-party e-commerce sites = COMPETITOR SITEaccounted for a larger percentage of downstream traffic than = THIRD-PARTYupstream, suggesting that shoppers often find products on 80% E-COMMERCE SITEbrand sites and go elsewhere to compare prices. = SISTER SITE 60% 59% 58% 59% 50% 40% “ We are in the midst of a massive shift online from a search and intent-based world to a social, people- based world. The last three years were about the consumer side of social platforms, as we watched Facebook, Zynga 23% 23% and Twitter grow exponentially. The next three years will be about the 20% enterprise side of social, and how companies engage and grow their 14% businesses by tapping into these massive platforms. ” 11% —Michael Lazerow | CEO, Buddy Media 6% 7% 3% 4% 3% 2% 0% % of Brands % of Upstream Traffic % of Brands % of Downstream Traffic for whom the following to brand sites for whom the following from brand sites are a top eight source originating from the are a top eight source to the following of upstream traffic following sources of downstream traffic destinations© L2 2011 17
  18. 18. DiGiTAL iQ Index ®:Specialty Retail Want to know more about your brand’s ranking? COnTACT USkey FinDinGSSize vs. engagementOur data indicates that Facebook interaction rates were nega- 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 Stively correlated with the size of a brand’s Facebook page, Facebook ‘Likes,’ excluding brands with < 2000 Fanssuggesting that retailers have yet to identify how to maintain an (N=63; July 2011)engaged—and growing—Facebook community.Smaller pages typically attain higher interaction rates, but only FAMILIES TRIBESto a point. Among the 64 brands in this study, engagementdeclined sharply for those above a threshold of 50,000 fans.However, there appears to be an emerging benchmark amongmature Facebook pages, as on average 0.07 percent of the KeY:community responded to brand posts (by “liking”). No brand = BRANDS WITH THE BEST CHANCE OF BUILDING “TRIBES” ONwith more than 400,000 likes was able to maintain an interac- FACEBOOKtion rate above 0.16 percent. by Increasing Fan Base, Engagement, or BothA|X Armani Exchange and Tiffany & Co. are best positioned toreach the sweet-spot between scale and interaction. Tiffany & Co. A V e R A G e ‘ L i k e ’ i n T e R A C T i O n R AT e by Fan page Size A|X Armani Exchange (June-July 2011) Fan Page Size: LeVeL OF enGAGeMenT 50k–100k 0.07% Fan Page Size: Fan Page Size: 0.32% <20k 100k–500k 0.08% Fan Page Size: 500k–1MM 0.07% COHORTS CROWDS 0.26% Fan Page Size: Fan Page Size: 20k–50k SiZe OF COMMUniTy 1MM+ 0.07% note: Horizontal axis (Size of Community) is graphed on a logarithmic scale.© L2 2011 18
  19. 19. DiGiTAL iQ Index ®:Specialty Retail Want to know more about your brand’s ranking? COnTACT USkey FinDinGSFacebook: Product-CentricExamination of retailers’ Facebook walls reveals that fans are A V e R A G e ‘ L i k e S ’ : i n T e R A C T i O n R AT e by p O S T T y p emost receptive to product-related messaging. Brands’ Face- (July 2011)book posts that highlight and/or promote products garneredthe highest interaction rate among fans at 0.14 percent, com-pared to 0.09 percent for contests, 0.08 percent for sales, or0.06 percent for style commentary and advice. p R O D U C T hi Gh L iG hT S 0.14%While contests, giveaways and promotions are good tactics toacquire fans, they don’t appear to generate consistent engage-ment or stickiness on Facebook walls. COnTeST nOTi FiCATiOn 0.09% p R & b R AnD i nF O 0.08% G e n eR AL C O M Me nT 0.13% S TyL e Ti p S & e Ve nT 0.13% A DVi C e 0.06% S A Le O R p R O M O Ti On 0.08%© L2 2011 19
  20. 20. DiGiTAL iQ Index ®:Specialty Retail Want to know more about your brand’s ranking? COnTACT USkey 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 S T e S T- G R O w i n G FA C e b O O k pA G e S (July 2011) (June-July 2011) 14,456,049 Victoria’s Ethan Allen 83% Secret Abercrombie 5,069,672 Zales 41% & Fitch Cole Haan Ralph Lauren 3,444,327 38% 7 For All 28% Coach 2,129,084 Mankind Bath & Body 2,056,996 Rue La La 22% Works One Kings Macy’s 1,956,104 Lane 21% Sephora 1,576,609 L’Occitane 21% bebe 1,430,262 Ann Taylor 18% 1,296,675 Bergdorf Swarovski 16% Goodman Juicy Williams- 1,142,014 16% Couture Sonoma 0 20% 40% 60% 80% on on on on 0 on illi illi illi illi illi m m m m m 1 2 3 4 5© L2 2011 20
  21. 21. DiGiTAL iQ Index ®:Specialty Retail Want to know more about your brand’s ranking? COnTACT USkey FinDinGS F - C O M M e R C e S O p h i S T i C AT i O nF-Commerce: The next, next Thing % of brands employing the Following Tools on Facebook:In the 2010 Index we reported that Brooks Brothers, Victoria’s (July 2011)Secret, and Coach were experimenting with selling merchandisedirectly off their Facebook walls. The path to innovation is notalways linear: Brooks Brothers and Coach have since pulled Full F-Commercetheir F-commerce platforms, while Victoria’s Secret has limited 8% (Primarily Gift Cards)Facebook checkout to gift cards only.At the time of data collection, with the exception of Sephora F-Commerce,(which allows checkout on Facebook for both gift cards and 6% no Checkoutselected gift products) all other F-commerce offerings werelimited to gift cards. Bath & Body Works, Lord & Taylor, andThe Body Shop all boast gift card apps similar to that of Victo- FACebOOk COMMeRCe SOphiSTiCATiOn Facebook Pageria’s Secret. Banana Republic, Barneys, Bluefly, and Thread- 13% As interactive Product Catalogless provide an F-commerce experience that offers everythingbut checkout through the Facebook page. After data collec-tion ended, Gilt Groupe and 7 For All Mankind developed fullF-commerce storefronts, further demonstrating the dynamismwithin this space.Thirteen percent of brands are on the cusp of breaking intoF-commerce, offering heavily curated product catalogs with Product Links 59%live links to product pages on their e-commerce site. Fifty-ninepercent of brands have links to their e-commerce sites on theirwalls, photos, or tabs. Surprisingly, 14 percent of brands still lackan e-commerce redirect from their Facebook pages.Additionally, we found a relationship between a brand’s up-stream traffic from Facebook and the sophistication of itsF-commerce offering. 14% no Product Links© L2 2011 21
  22. 22. DiGiTAL iQ Index ®:Specialty Retail Want to know more about your brand’s ranking? COnTACT USkey FinDinGS i n n O V AT i V e b R A n D S A R e e x T e n D i n G T h e i R S T O R e F R O n T S T O FA C e b O O k : “ Industry research shows that a majority of consumers today are not on Facebook to shop. It’s important for brands to think about bringing social to their online store (where 100% people are going to shop) in addition to bringing their online store to social (where only a small percentage are going implicitly to shop). ” —Michael Lazerow | CEO, Buddy Media F-Commerce, no Checkout AVG.% OF UpSTReAM SiTe TRAFFiC F-Commerce F R O M FA C e b O O k % o f Tr a f f i c t o b r a n d S i t e s v i a F - C o m m e r c e (July 2011) Upstream to brand Site product Links 14% Full F-Commerce (Primarily Gift Cards) F-COMMeRCe SOphiSTiCATiOn 16% F-Commerce, no Checkout 15% Facebook page As interactive product Catalogue 13% product Links Facebook As interactive 9% product Catalog no product Links© L2 2011 22