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Digital luxury: Must try harder says L2… except Burberry

Burberry-Christmas-2015-Ad-Campaign03
Burberry, getting it right

Hey, guess what – e-commerce is becoming really important to the luxury sector but not enough luxury brands quite ‘get it’ yet.

OK, tell us something we don’t know. But cynicism aside, it’s always interesting when someone pulls that kind of information together and puts it into context. And that’s what L2’s latest Digital IQ Index for fashion has done.

I decided not to cover this story when it came out last week as the headline that Burberry’s doing so well in digital didn’t really throw up any surprises. But digging deeper, it stunned me how so many luxury brands are still not thinking truly digital.

Why does it matter? Well, as much as 83% of luxury growth last year came from online sales. A year earlier the figure was just 33%, up from a pretty pathetic 5% from 2010 to 2013 (I say pathetic, of course, because the mass-market had been happily getting online for years before that).

Why is luxury so slow?

Not that it’s such a surprise that luxury has been slow coming to the table. The sector’s $129bn in offline apparel sales are pretty impressive without the relatively tiny $210m in online sales. But with the latter figure set to double in five years and continue soaring after that, and with many consumers increasingly expecting a sophisticated approach to online, luxury can’t continue to bury its head in the sand.

Some brands are getting it right – very right. L2 said that the top 10 brands accounted for less than a quarter of that $129bn in offline sales. But online, they account for 65% of sales – yes, you read that right. On the downside, it also means that plenty of brands are getting it wrong – very wrong!

valentino
Valentino – digitally gifted and Instagram crazy

From genius to feeble – how brands fare

Anyway, the report looks at a large number of luxury brands and how they’ve performed online generally and in e-commerce, taking into account the many features designed to make the user journey easier/more pleasurable.

So, who’s doing well? Yes, Burberry’s out there in front (as it usually is, although it did drop back a little in last year’s list). It beats Kate Spade by one point with both given ‘genius’ status by L2. Burberry stands out for its well-rounded approach to both established platforms and emerging ‘cool kid’ platforms like Periscope and SnapChat, and for its upgraded mobile channel.

Burberry has invested heavily in improving the buying experience on mobile and its mobile penetration tripled after it updated its m-commerce channel.

Cole Haan was also singled out for praise in this area and for reducing mobile checkout from around 15 clicks to one thumbprint by using ApplePay.

Plenty of other brands are getting it right too. Digitally ‘gifted’ brands in L2’s list include Ralph Lauren, Louis Vuitton, Gucci, Michael Kors, Bottega Veneta, Hugo Boss, Jimmy Choo, Diane von Furstenberg and Dolce & Gabbana. Valentino also came into the gifted category, which is great given that it was so slow getting online in the first place. In fact the New York Times said that since arriving on Instagram, the brand has posted more than almost any other. Go Valentino!

But L2 is pretty scathing about some other luxury labels. Chanel, Paul Smith, Balenciaga, Prada, Alexander McQueen, Alexander Wang and Dior may be fashion influencers to you and I, but L2 said they’re digitally ‘average’. It also said Chloé and Pucci are ‘feeble’. And Céline, Jean Paul Gaultier, Givenchy, Kenzo, Miu Miu, Sergio Rossi and Vivienne Westwood are ‘challenged’. Ouch!

celine
Céline may be cool but it’s out of the game digitally

What’s the problem?

Some brands are doing lots of things wrong, it seems. That can include not bothering to find out any extra information about their customers online, apart from their gender and birthday. While face-to-face they’re falling over themselves to find out as much as they can about them in order to improve their in-store shopping experience, online, they just don’t seem to care. Bizarre.

And many aren’t global enough online, even though they are offline. They appear to think their brands are strong enough not to have to speak to potential customers globally in their own languages. Big mistake says L2.

Any more faux pas? Yes plenty. One of the most interesting is that they don’t get that search is key and a social media ad video strategy isn’t enough to make them visible. Paid search is being neglected, which is a major obstacle to growth in an increasingly crowded e-commerce space, L2 said.

There’s more, a whole lot more but I doubt many people would read that far if I reported it all. It does seem strange that such a report full of criticisms could come out as late as 2015. We live in a world in which online just shouldn’t be ignored by so many companies that are so far ahead of the pack in so many other areas.

Can’t wait for next year’s list to see whether the “must try harder” message has got through.

This post first appeared on Trendwalk.net, a style-meets-business blog by journalist, trends specialist and business analyst, Sandra Halliday

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Digital snippets: Ralph Lauren’s connected fitting room, IBM Watson predicts holiday shopping, Burberry customers can star in new campaign

Here’s a round-up of the latest stories to know about surrounding all things fashion and tech…

A Polo Ralph Lauren associate trying out the interactive fitting

  • Ralph Lauren and Oak Labs debut interactive fitting rooms [WWD]
  • IBM Watson trend app predicts hot holiday shopping items [AdAge]
  • Burberry makes customers the star of their own fashion campaign [Brand Republic]
  • Sephora’s new retail stores will take cues from YouTube [Digiday]
  • New Balance will sell 3D-printed shoes in Boston starting next year [Beta Boston]
  • Target’s big digital holiday campaign combines Snapchat, Facebook and Instagram [AdWeek]
  • J Crew and American Girl embrace social commerce ads for the holidays [AdWeek]
  • Andy Dunn’s plans to build a digital native brand empire with Bonobos [Redef]
  • Burberry receives top ranking in L2 digital index [Yahoo]
  • Macy’s imagines the shop of the future in time for Black Friday [PSFK]
  • What’s behind the exodus from Rent the Runway? [Fortune]
  • Amazon touts new drone prototype [WSJ]
  • Brooklyn’s Catbird prioritises digital over brick-and-mortar expansion [Fashionista]
  • Is there still hope for fashion crowdfunding? [BoF]
  • Can artificial intelligence sell shoes? [WSJ]
  • Three ways data is transforming fashion retail [WGSN]
  • Instant messaging will change the way brands talk to customers, says Tictail [Wired]
  • The potential of geolocation for revolutionising retail [HBR]
  • Retail enters third phase of digital evolution [FT]
  • Will social selling work in fashion? [BoF]
  • Hands-on with Facebook’s haphazard shopping feed [TechCrunch]
  • The future of shopping is… Second Life on acid? Imagining a virual reality mega mall [Co.Design]
  • Stitch Fix creates an army of brand advocates, one social share at a time [The Future of Commerce]
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Digital snippets: Jimmy Choo, Uniqlo, Nike, Michael Kors, Dolce & Gabbana, Amazon

Some more great stories from around the web surrounding all things fashion and digital over the past week:

 

  • Digital scorecard: Jimmy Choo 24:7 Stylemakers [BoF]
  • Uniqlo bids you good morning with new social app (as video above) [Co.Create]
  • The New York Times expanding street style coverage [WWD]
  • Dolce & Gabbana presents new eyewear collection with silent short film [Luxury Daily]
  • Amazon leaps into high end of the fashion pool [NY Times]
  • The Bottom Line: Pinterest vs Facebook [BoF]
  • Styku: how Microsoft’s Kinect could replace your tailor [Fast Company]
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Digital snippets: L2 Digital IQ, My-wardrobe.com, Versace and H&M, Olivia Palermo

Some more great stories from around the web surrounding all things fashion and digital over the past week:

  • My-wardrobe.com profile: can Sarah Curran (pictured) compete with Asos? [The Guardian]
  • L2 releases 2011 Fashion Digital IQ study (as below), Burberry take top spot, Kate Spade a newcomer, Hermès and Prada plummet [L2 Think Tank]
  • Olivia Palermo launches own fashion blog, employs five staff and at least 11 contributors [Elle]
  • Vogue among Condé Nast titles to join iPad by early 2012 [Mashable]
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Infographic: L2 Digital IQ Index, specialty retail

I love this summary on how to navigate the future of specialty retail online:

Part of the second annual L2 Digital IQ Index: Specialty Retail report from digital think tank L2 in partnership with Buddy Media, it shows the past, present and future of everything from distribution channels to mobile strategy and visual merchandising.

So how far off from “tomorrow” are we – a vision made up of mobile wallets, geolocal content, video chat customer service and shoppable product videos?

None of those suggestions are of course that new, but by the looks of the results from the L2 study, they remain somewhat elusive to everyday practice in US retail.

Just three retailers secured “genius” status in terms of digital competency in the 2011 report – Macy’s, Victoria’s Secret and Nordstrom – compared with seven last year.

This is said to be due to mobile and social platforms taking on new levels of importance in 2011, which resulted in the likes of A|X Armani Exchange (down 32%) and Coach (down 33%) only achieving “gifted” scores.

In fact, of the 64 retailers assessed, the majority (70%) sit in “gifted” or “average”. This figure is however up from 49% from the inaugural study in 2010, proving the industry’s adoption of digital platforms is accelerating.

The retailers were evaluated across four dimensions: their website (including integration of original blog content, ease of content sharing, and interactivity); digital marketing (covering search engine optimisation, email marketing, and user generated sentiment); social media (Facebook, Twitter and YouTube); and mobile offering (defined by breadth of platform development and app features). Retailers had to score 140 across the categories to score genius.

Joining A|X Armani Exchange and Coach in the gifted category (a score of between 110 and 139) are the likes of Bloomingdales, Urban Outfitters, Net-a-Porter, Neiman Marcus, Saks Fifth Avenue and Ralph Lauren.

Average brands (a score of between 90 and 109) include Barneys New York, Ann Taylor, J. Crew and Lord & Taylor, while those challenged (a score of between 70 and 89) include French Connection and Lucky Brand. The only two with feeble rankings (below 70) are Club Monaco and Tourneau because they are yet to offer e-commerce.

“Historically, specialty retailers have differentiated themselves from low-cost peers by establishing an aspirational environment, edited selection, and top-shelf service, all mixed with traditional media spend. The offline strategy is still the right one, but the tactics and weapons have changed,” said L2 founder Scott Galloway.

“Brands that are thriving are engaging in conversations directly with their customers on social media platforms, creating new and interesting ways to purchase online, and building innovative mobile apps to augment the shopping experience.”

Check out the full report, here.

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Digital snippets: Diesel, Louis Vuitton, Net-a-Porter, L2 Prestige 100 Facebook IQ

I’m back from an incredible trip to Internet Week New York (more posts from that to follow), and just catching up on reading from last week. Here are some of the great stories surrounding all things fashion and digital I found:

 

  • Diesel integrates Facebook sharing with real-life shopping through in store “likes” (see video) [Digital Buzz]
  • Louis Vuitton partners with Chinese checkin service Jiepang [Mashable]
  • John Varvatos promotes new album from rock group Urge Overkill through social media sites [Luxury Daily]

In case you missed it, there were also some interesting thoughts surrounding Burberry’s placement as “average” in said L2 study. These pieces are worth reading:

  • Vanessa Friedman: Burberry’s web-wizardry a disappearing spell? [FT Material World]