L2 Digital IQ Index®: European Specialty Retail (2011) by L2

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

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IN T R O D U C T I O N

A Tale of Two Continents

Weakened 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 sales are projected to increase at a compound annual growth rate of 12.2 percent, exploding from $93.5 billion in 2011 to an estimated $148.3 billion by 2015.2 In the eight weeks leading to Christmas, online sales are expected to increase nearly 20 percent from a year ago.3 Furthermore, more consumers in the U.K. and Germany made a purchase online as a percentage of the internet population in 2011 than in e-commerce’s birthplace, the U.S.4

What Happens Online Does Not Stay Online

Winners & Losers

Digital provides a greater opportunity than just generating online

of European specialty retailers, a bifurcation appears to be

sales. More than 65 percent of consumers in major European

emerging. Genius retailers including online-only players ASOS

markets use their smartphones while in brick-and-mortar stores.

and Net-a-Porter, and juggernauts H&M and Sephora, are

In 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

In our first-ever Digital IQ Index® measuring the digital efforts

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.

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IN T R O D U C T I O N European Disunion

av e r ag e d i g i tal i q by c ou n t r y o f h e ad q ua r t e r s

Digital competence varies by country of origin. Retailers headquartered in the U.K., where 12 percent of all retail takes place online, boast average IQs of 112. Their counterparts in France

U.K.

(n=15)

and Italy, however, average just 87 and 76, respectively.

Digital IQ = Shareholder Value

112 Other* (n=5)

Our thesis is that digital competence is inextricably linked to

shareholder value. Key to managing and developing a competence is an actionable metric. This study attempts to quantify the digital competence of 55 European specialty retailers. The ranking reflects brands’ efforts across the big five markets in Western Europe and the U.S. Our aim is to provide a robust tool to diagnose digital strengths and weaknesses and help brands achieve greater return on incremental investment. Like the

France (n=24)

medium we are assessing, our methodology is dynamic, and we hope you will reach out to us with comments that improve our methodology, investigation, and findings. You can reach me

Italy

(n=5)

at scott@stern.nyu.edu. Regards, Spain (n=6)

Scott Galloway

104

Founder, L2 Clinical Professor of Marketing, NYU Stern

* Sweden, Germany, & Switzerland

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A B O U T T HE R A NKIN G S D i g i tal IQ Class e s

ME T H O D O LO G Y

Site: 35%

IQ Range

Effectiveness of brand site

Functionality & Content: 75%

BRAND TRANSLATION: 25%

• Site Technology

• Site Aesthetics

• Navigation, Product & Site Search

• Messaging & Imagery

140+

IQ Class

GENIUS Digital competence is a point of differentiation for these retailers. Site content is searchable, shareable, and mobile optimized. Social media efforts complement broader digital strategy.

• Social Media Integration • Customer Service & Store Locator • Product Page • Checkout • Account • International Customization: Language, Currency, Consistency, Shipping

110–139

GIFTED Retailers are experimenting and innovating across site, mobile, and social platforms. Digital presence is consistent with brand image and larger marketing efforts.

Digital Marketing: 30% Search, display, and email 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 • Email: Frequency, Content, Social Media Integration, Tactics

90–109

Digital presence is functional yet predictable. Efforts are often siloed across platforms.

Social Media: 20% Brand presence, community size, content, and engagement on major social media platforms • Facebook: Likes, Growth, Tabs & Applications, Responsiveness, Engagement • Twitter: Followers, Growth, Tweet Frequency, Online Voice

70–89

Mobile: 15% • Mobile Site: Compatibility, Functionality, Transaction Capability • iOS Applications (iPhone & iPad): Availability, Popularity, Functionality, iPad Differentiation • Other Platforms (Android & Blackberry): Availability, Popularity, Functionality

CHALLENGED Limited or inconsistent adoption of mobile and social media platforms. Site lacks inspiration and utility.

• YouTube: Views, Number of Uploads, Subscriber Growth, Viral Videos

Compatibility, optimization, and marketing on smartphones and other mobile devices

AVERAGE

<70

FEEBLE Investment does not match opportunity.

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D I G I T A L IQ R A NKIN G

headquarters: U.K.

Spain

France

Other

Italy

Rank

Brand

Headquarters

ASOS

U.K.

156 Genius

A digital leader across all platforms, delivers unmatched programming and top-notch customer service

H&M

Sweden

148 Genius

Social media giant also boasts strong site with interactive product pages

NET-A-PORTER

U.K.

148 Genius

Seamless e-commerce experience; “Fashion’s Night Out” campaign bridges off- and online

Sephora

France

142 Genius

Mobile leader drives e-commerce with robust content and a plethora of product reviews

Marks & Spencer

U.K.

130 Gifted

Fastest-growing Twitter following and a site experience that wows across every dimension

Lacoste

France

127 Gifted

Eau de Lacoste L.12.12 launch demonstrates digital mastery; brand integrates social media across every major platform

Diesel

Italy

126 Gifted

Site offers a wealth of content, but mobile offering doesn’t enthrall

L’Occitane

France

124 Gifted

Brand boasts three of the top 10 fastest-growing pages on Facebook

Mango

Spain

121 Gifted

Mobile savant hosts m-commerce across every major operating system

House of Fraser

U.K.

120 Gifted

Excellent e-commerce experience provides localized buy-and-collect option

Harrods

U.K.

119 Gifted

Digital efforts reinforce brand’s heritage and reputation

U.K.

119 Gifted

Highest scoring m-commerce experience, but buggy site hampers traditional desktop experience

French Connection

U.K.

118 Gifted

Seamless e-commerce experience and impressive blogs

La Redoute

France

114 Gifted

Site excels across every dimension except aesthetics; quick to adopt Google +1 button

Digital IQ Class

Comments

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D I G I T A L IQ R A NKIN G

headquarters: U.K.

Spain

France

Other

Italy

Rank

Brand

Headquarters

Topshop

U.K.

113 Gifted

Robust social media programming and huge follower base, but limited mobile offering

Zara

Spain

113 Gifted

Facebook leader with more than 10.5 million “likes”; user-generated style campaign and contest entertain

New Look

U.K.

111 Gifted

Efficient e- and m-commerce could be enhanced with stronger design

3 Suisses

France

110 Gifted

Interactive catalogs and multimedia blog stand out; Google+ sharing

Selfridges

U.K.

108 Average

Cross-platform corporate social responsibility efforts complement digital strategy; mobile investments lag

Sarenza

France

107 Average

Best asset is site functionality, but lacks aesthetic flair

El Corte Inglés

Spain

106 Average

Brick-and-mortar behemoth has created an equally overwhelming digital offering— quantity over quality

Camper

Spain

105 Average

Nimble site that balances aesthetics and functionality

Boots

U.K.

103 Average

Wins on functionality, loses on visual appeal

Yves Rocher

France

103 Average

Strong tutorial content gets lost due to feeble navigation

Galeries Lafayette

France

98 Average

Facebook page benefits from innovative features such as custom Instagram tab

Brandalley

France

97 Average

Le Lab engages customers by giving them a role in choosing the featured design

Desigual

Spain

97 Average

Site reflects brand personality, but interactivity is relegated to microsites

The Body Shop

U.K.

95 Average

Competent e-commerce offering, but no mobile presence

Digital IQ Class

Comments

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D I G I T A L IQ R A NKIN G

headquarters: U.K.

Spain

France

Other

Italy

Rank

Brand

Headquarters

United Colors of Benetton

Italy

95 Average

No e-commerce

Vente-PrivÉe

France

92 Average

Investment in Android and iOS platforms, but lackluster site

Esprit

Germany

87 Challenged

Celebrates the holidays with the “Make Your Wish” offline/online campaign

Matalan

U.K.

87 Challenged

Virtual fitting room and sophisticated Facebook page are strongest assets

Kookai

France

82 Challenged

Blog delights; site is functional but dry

Printemps

France

82 Challenged

No e-commerce, but shareable content delivers

Massimo Dutti

Spain

79 Challenged

Branded content dominates site; e-commerce upgrades sorely needed

Triumph

U.K.

78 Challenged

Site navigation lacks sophistication and detracts from brand’s image

Etam

France

77 Challenged

Facebook functionality is more sophisticated than site

Marionnaud

France

77 Challenged

Strong social media integration on Facebook, but site design needs a refresh

agnès b.

France

77 Challenged

Aesthetic appeal fails to mask poor functionality

Comptoir des Cotonniers

France

76 Challenged

Interactive e-catalogs are the only bright spots

André

France

75 Challenged

Facebook Connect redeems an otherwise static site

Maje

France

74 Challenged

Digital work-in-progress

Digital IQ Class

Comments

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D I G I T A L IQ R A NKIN G

headquarters: U.K.

Spain

France

Other

Italy

Rank

Brand

Headquarters

Molton Brown

U.K.

71 Challenged

Brand equity does not translate online

Sandro

France

71 Challenged

Site design pleases despite nascent digital footprint

Minelli

France

68 Feeble

E-commerce enabled site is simple but sleek

Le Bon Marché

France

67 Feeble

Site design is confusing

KaDeWe

Germany

64 Feeble

No frills e-commerce

Intimissimi

Italy

63 Feeble

Beautiful photography, but lacks essentials such as store locator

Geox

Italy

63 Feeble

Still working out e-commerce kinks

Globus

Switzerland

57 Feeble

No social media presence

Paule Ka

France

55 Feeble

Strong site and Facebook foundation; waiting for more content and stronger navigation

Gerard Darel

France

51 Feeble

Transactions and not much else

Jelmoli

Switzerland

46 Feeble

Site functions best as an online magazine

Orcanta

France

42 Feeble

No engagement, interactivity, or shareability

La Rinascente

Italy

35 Feeble

Site is a relic

Digital IQ Class

Comments

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KEY FIN D IN G S

D I G I TA L IQ D I S T RIB U T I O N * % of Brands per Digital IQ Class

Strength Begets Strength GENIUS

Four brands, ASOS, H&M, NET-A-PORTER, and Sephora, achieved Genius status in the inaugural L2 Digital IQ Index®:

European Specialty Retail study. All four have established a

to innovate on emerging platforms. The overall IQ distribution reveals a significant bifurcation: Only 22 percent of brands are classified as having Average IQs, while the majority are at the poles as either competent (Genius and Gifted) or incompetent (Challenged and Feeble).

>140

H&M NET-A-PORTER Sephora

robust e-commerce channel, strong programming on social media platforms, mobile compatibility, and display a willingness

ASOS Digital IQ

Marks & Spencer

Lacoste

French Connection

Diesel

La Redoute

L’Occitane

Topshop

Mango

Zara

House of Fraser

New Look

Harrods

3 Suisses

GIFTED Digital IQ

110–139

25%

Results of our Digital IQ Index®: Specialty Retail study, which

AVERAGE

ranked U.S. retailers, revealed 2011 as the year of the American

Selfridges

BrandAlley

department store. Both Macy’s and Nordstrom achieved Genius

Sarenza

Desigual

rankings, and the category itself boasted an average Digital

El Corte Inglés

The Body Shop

Camper

United Colors of Benetton

22%

IQ of 118, just behind the digitally native e-tailers. In contrast, European department stores posted an average Digital IQ of

Digital IQ

90–109

Yves Rocher

86, with 42 percent residing in the Feeble class. The category’s

presence, and 17 percent do not engage in email marketing.

Vente-Privée

Galeries Lafayette

performance is not surprising: One-third of European department stores are not e-commerce enabled, 58 percent have no mobile

Boots

Esprit

Marionnaud

Matalan

Agnès b.

Kookai

Comptoir des Cotonniers

Printemps Massimo Dutti Triumph Etam

André Maje

CHALLENGED Digital IQ

70–89

25%

Sandro Molton Brown

FEEBLE 20%

Digital IQ

<70

Minelli

Paule Ka

Le Bon Marché

Gerard Darel

KaDeWe

Jelmoli

Intimissimi

Orcanta

Geox

La Rinascente

Globus * Numbers do not add up to 100% due to rounding

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KEY FIN D IN G S

YouTube channel has well-integrated links to site, ASOS marketplace, and blogs

In the Company of Genius asos Skype partnership provides oneon-one style advice to customers on November 23

ASOS hosts a consumerto-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

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KEY FIN D IN G S In the Company of Genius h&m

H&M has the most robust Google Plus page in the Index

Virtual dressing room allows visitors to style a model of their choice

The retailer nabbed both the highest number of Twitter followers and YouTube brand channel upload views

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KEY FIN D IN G S In the Company of Genius net-a-porter

NET-A-PORTER LIVE 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

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KEY FIN D IN G S In the Company of Genius sephora

Sephora boasts 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

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KEY FIN D IN G S

V S . S H A RE O F O N L INE RE TA I L (December 2011) Gifted

The Queen (of Digital)

110

than those in France and Italy. The U.K.’s IQ supremacy mirrors macro trends: Britain’s online nation’s e-commerce shoppers spending almost $3,000 online annually.5 Additionally, 44 percent of U.K. specialty retailers

Children of the Medium

Share of Online Retail

boost from retail giants Mango and Zara, both Gifted.

80 76

have a mobile-optimized site, all are present on Facebook and Twitter and are e-commerce enabled. Spain’s average IQ gets a

90 Challenged

share of all retail sales leads Europe at 12 percent, with the

104

Average

Retailers headquartered in the U.K. boast an average IQ of 112, eight points higher than Spanish peers and significantly higher

112

Spain

France

Italy

Other

(n=15)

(n=6)

(n=24)

(n=5)

12%

3.5%

7.3%

3.9%

n/a

Online-only retailers boast significantly higher Digital IQ scores than their brick-and-mortar peers, suggesting traditional retailers are still playing catch-up in Europe. For those brands with a store retail strategy, there is also a relationship between

A V ER A G E D I G I TA L IQ BY N U MBER O F S T O RE S

the number of retail locations and Digital IQ, indicating that

(December 2011)

120

competent online.

Gifted

terrestrial retailers with a larger offline footprint are also more

110

106

Average

110

Challenged

>1,000

500–1,000

250– 500

100–250

76 <100

Online Only

5. “Western Europe B2C Ecommerce,” Karin Von Abrams, eMarketer, August 2011.

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KEY FIN D IN G S Luxury Comes Up Short Retailers with a lower average price point register an average Digital IQ 20 points above their higher priced peers, indicating

PA REN T C O M PA NY RE V EN U E S V S . D I G I TA L IQ

high-end brands have still not found their footing online. This

(December 2011)

disparity suggests a missed opportunity, as affluent consumers online, and are the largest contributors to e-commerce growth.

Genius

are more likely to own a smartphone and tablet, spend more time

Leveling the Playing Field

140

Among the 20 retailers with publicly available financials, there revenue) and Digital IQ, suggesting that digital provides a medium for smaller brands to punch above their weight class.

Gifted

is no relationship between the size of the business (in annual

A V ER A G E D I G I TA L IQ BY P RICE P O IN T

110 Average

Gifted

(November 2011)

111 110

Average

Challenged

Feeble

2011 Fiscal Year Revenues (in $ billions) $

$$$

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KEY FIN D IN G S A D O P T I O N A CR O S S P L AT F O RM S

Multichannel

% of Brands With the Following

European specialty retailers are present across most digital

(November 2011)

channels. All but one maintain a presence on Facebook and more than 85 percent are e-commerce enabled. On the next

98%

93%

retail battleground, mobile, nearly 60 percent of retailers have

87%

85%

80%

launched a mobile site and/or an application.

67% 58%

Emerging platforms offer more opportunity for differentiation.

38%

While 38 percent have a presence on Google+, only 16 percent of the retailers have established official Instagram accounts and

16%

just five percent have a Tumblr blog. H&M leads on Google+,

with more than 15,000 subscribers, versus the Index average of 808. In addition, NET-A-PORTER photos are followed by more than 14,000 Instagram subscribers. During data collection, only one brand, Kookai, was present on all three new media channels.

Facebook

E-Commerce

Twitter

YouTube

Blogs

Mobile

Google+

Tumblr

Emerging Platforms

Low-Hanging Fruit Eighty-seven percent of the retailers’ sites are e-commerce

Instagram

83%

enabled, but most lack some of the most basic features, such

S I T E FE AT U RE A D O P T I O N 76%

(November 2011)

as user reviews and product ratings. Though the majority, 83

With

percent, include videos, it is their shareability that drives visits:

Without

Sites with interactive and shareable videos experienced a 19

30%

percent increase in traffic over a one-month period, versus just

26% 15%

five percent for those without. Similarly, retailer sites with blogs

experienced an 18 percent increase in traffic over the same period. Videos 17%

Store Locator

User Reviews/ Ratings

Product Quickview

Product Videos

Live Chat

24%

70%

74% 85%

96%

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KEY FIN D IN G S e m a i l m a r k e t i n g adopt i o n

Empty Inbox

(September–November 2011)

While 90 percent of European specialty retailers offer email

email received

signup, almost half did not send an email marketing message

no email received

within 10 weeks. Email privacy laws are more restrictive in Europe than in the U.S., but the medium still provides one of the most effective call-to-action marketing vehicles. Email

45%

penetration across Europe is 67 percent, and every segment,

55%

with the exception of the 15–24 demographic, has registered email adoption growth—most in the double digits.6 Online retailers such as Vente-Privée, NET-A-PORTER, and BrandAlley lead the pack in email frequency and sophistication because of their high inventory turnover, sending upwards of three emails per week versus the Index average of 0.9.

e m a i l f e atu r e adopt i o n % of Brands With the Following

63%

(November 2011) 52% 44%

44%

33% 26%

6. “State of the Internet—Australia,” ComScore, February 18, 2011.

Welcome Email

Viewable on Mobile

Email Consistency

Links to Social Media

Replicated Web Nav

Send to Friend

Social Sharing

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KEY FIN D IN G S

top 1 0 b r a n ds : fa c e b oo k ‘ l i k e s ’

top 1 0 : fa c e b oo k fa n pag e g r o w t h

(November 2011)

Excluding Pages With < 2,000 Fans (September – November 2011)

El Corte Inglés

72%

Vente-Privée (Spain)

69%

65%

1,129,652

L’Occitane (France)

Diesel

1,077,385

Vente-Privée (Italy)

,0 10

47%

0 8,

0 6,

0 0, 00 4,

0, 00 2,

House of Fraser

852,375

United Colors of Benetton

55%

New Look Retail

1,363,750

ASOS

72%

20 0%

1,706,324

L’Occitane (Germany)

2,059,363

Topshop

73%

Sarenza (Italy)

Sephora (Global)

85%

2,706,273

Mango

101%

Vente-Privée (Germany)

6,676,576

Lacoste

L’Occitane (USA)

8,668,408

H&M

228%

Jelmoli

10,517,459

Zara

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KEY FIN D IN G S Size vs. Engagement Winning on Facebook is no longer just about page size, it’s also

FA CEB O O K Co m m u n i t y s i z e v s . e n gag e m e n t r at e s

about engagement. European specialty retail brands have made

Excluding Pages With < 2,000 Fans

huge investments in fan growth and average more than 460,000

(November 2011)

“likes” on Facebook. However, no retailer has achieved the elusive “Tribe” status, balancing an above-average community size

FAMILIES

with above-average fan interaction. Marks & Spencer, Diesel, and United Colors of Benetton are best positioned to

TRIBES

The Body Shop

reach this sweet spot combining scale and interaction.

Yves Rocher Italy

Facebook heavyweights Zara, H&M, and Lacoste—all with

Yves Rocher US

communities of more than six million—had some of the lowest

KEY:

Facebook engagement rates at approximately 0.02%.

= BRANDS Narrowing IN on “tribes” categorization

Benetton’s product post garners a “like” interaction rate of .69%

Intimissimi

United Colors of Benetton Diesel

A store opening event post of photos has a “like” interaction rate of .12%

LEVEL OF ENGAGEMENT

Marks & Spencer

Lacoste Zara H&M

COHORTS

CROWDS

SIZE OF COMMUNITY Note: Horizontal axis (Size of Community) is graphed on a logarithmic scale.

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KEY FIN D IN G S The In Crowd

FA CEB O O K C O MMERCE INN O V AT I O N % of Brands Employing the Following:

While there is increasing pressure to demonstrate ROI in Facebook, only four brands in the Index—ASOS, Sephora, L’Occitane, and The Body Shop (USA)—leverage the platform to sell products. ASOS is particularly sophisticated, enabling users to send shopping invitations to friends and providing currency personalization and product sharing. Zara and Marionnaud offer

Full F-Commerce

Partial F-Commerce

interactive lookbooks and product catalogs on Facebook, but

FACEBOOK COMMERCE sophistication

transactions are consumated on the brands’ sites.

54%

Product Links

35%

Links to E-Commerce Page

L’Occitane, Sephora, and The Body Shop are experimenting with f-commerce

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KEY FIN D IN G S

top 1 0 b r a n ds : m ost da i ly t w e e ts

b e st i n t w e e t: top 1 0 t w i tt e r f ollo w e r s

top 1 0 b r a n ds : F O L LO WER S A D D E D P ER D AY

(September–November 2011)

(November 2011)

(September–November 2011)

227,687

@NETAPORTER

305

@LaRedouteFr

123,217

@LaRedouteFr

381

@Topshop

201,715

@NETAPORTER

407

178

@hmunitedkingdom

129

Desigual

@hmusa

58,400

@Selfridges

122

0 20

0 00 40 0,

0 00 30 0,

0, 00 0 20

0, 00 0

@HarrodsofLondon

65,353

58,510

@Selfridges

ASOS

@HarrodsofLondon

NET-A-PORTER

@Topshop

569

House of Fraser

@marksandspencer

231,269

BrandAlley

@ASOS

Yves Rocher

586

@Sephora

Topshop

244,513

@Sephora

752

@ASOS

Harrods

357,802

@LACOSTE

1,775

@hm

L’Occitane

578,213

@hm

Marks & Spencer

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k e y f i n d i n gs % o f b r a n ds us i n g t h e f ollo w i n g T w i tt e r ta c t i c s

Customer Service

(September 2011)

Eighty-five percent of European specialty retail brands maintain

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 a vehicle for customer service. Brands including House of Fraser, Marks & Spencer, and NET-

24%

A-PORTER use their official Twitter channels to respond to customer inquiries and complaints, while ASOS and Sephora have developed customer service-specific accounts that scan official pages for questions and comments. Responding to customer service inquiries appears to pay off—Twitter handles that address these requests yield average followings of almost 60,000, compared with 16,000 for accounts that do not.

@Replies

ASOS and Sephora's dedicated customer service Twitter accounts

Links to Social Media in Tweet Stream

Retweets

Pictures

Videos

av e r ag e n u m b e r o f f ollo w e r s by c o n t e n t t y p e (September–November 2011)

56,412

using

58,267

not using 47,227

34,074 25,545

24,745 16,159

Customer Service

17,477

Events

Deals/Offers

Digital IQ Index ®:

European Specialty Retail

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KEY FIN D IN G S iRetail More retailers have developed iPhone and iPad applications than have created mobile-optimized sites, one of the most ba-

M O BI L E A D O P T I O N BY P L AT F O RM

sic and cost-effective mobile investments. Additionally, just one

(November 2011)

in five brands have established an app for the rapidly proliferating Android platform. While iOS dominates, app sophistication lags. Only 39 percent

20%

24%

31%

of iPhone and iPad apps are mobile-commerce enabled, and

47%

less than half (46 percent) include a store locator. More surprising, only 16 percent offer customer service information through their iOS apps. Among the 24 percent of retailers with mobile-optimized sites, sophistication is high—the majority host a retail locator, are e-commerce enabled, and offer mobile site search.

iPhone

iPad

M O BI L E S I T E FE AT U RE S

(November 2011)

M-Commerce

Mobile Site Search

Android

M O BI L E S I T E S O P HI S tIC AT I O N

% of Mobile-Optimized Retailers Employing the Following:

Retail Location Finder

Mobile-Optimized Site

80% 75%

9% Will not load

67% Not Mobile-Optimized

24% Mobile-Optimized

75%

Digital IQ Index ®:

European Specialty Retail

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D I G I T A L P R O J EC T I O N S

Today

Yesterday

L2’s roadmap for navigating the past, present, and future of European Specialty Retail online

Topshop • French Connection

Brand Content

Harrods Strong lookbooks, but lacking social-sharing capability

Blogs well integrated into sites featuring shareable interactive content

Zara • Marionnaud

Facebook Monetization

Customer Service

Globus No Facebook page

Gerard Darel • Intimissimi • Sandro

Shoppable lookbooks and product catalogs on Facebook, but directs to site to complete transaction

Lacoste Live chat and scheduling for customer service calls

Tomorrow Marks & Spencer Videos on site are embedded with scrolling product and Twitter feeds

ASOS • L’Occitane • Sephora • The Body Shop F-commerce

ASOS Personal styling advice via Skype

Only phone and email

NET-A-PORTER New Look • BrandAlley

iOS Experience

Sephora Best-in-class iOS apps in the U.S. market, but not customized for, or available, in Europe

E-commerce-enabled iPhone apps; no presence on iPad yet

Kookai

Social Media Presence

Globus None

Small brand, but present on Facebook, Twitter, YouTube, Google+, Tumblr, and Instagram

In addition to e-commerce-enabled app, launched a Fashion’s Night Out specific app to give customers a storefront experience

H&M Largest Twitter and YouTube followings; most sophisticated Google+

H&M La Redoute

Product Presentation

Triumph Static product pages

Cross-sells on product pages based on editorial and client recommendations

Virtual dressing room allows shoppers to design custom looks

Digital IQ Index ®:

European Specialty Retail

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f las h o f g e n i us The virtual dressing room lets shoppers design a custom look

Virtual Fitting Room The Swedish retailer’s e-commerce enabled site features an interactive virtual dressing room coupled with sophisticated navigation. The dressing room allows shoppers to style a model of their choice from head to toe, including shoes and accessories. The model’s hairstyle, pose, and background are also customizable, and the final look can be saved or shared on Facebook, Twitter, email, and blogs. This focus on product persists outside of the fitting room. H&M’s site features interactive and video-enhanced lookbooks for its collection, as well as product pages equipped with advanced filtering and sorting.

Product sections are easily filtered and sorted

The site features sophisticated interactive lookbooks of new collections

Digital IQ Index ®:

European Specialty Retail

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f las h o f g e n i us Zara customers are invited to submit photos featuring at least two items from the current collection for the chance to win €300

User-Generated ‘PEOPLE!’ Campaign Zara’s integrated Facebook and site campaign ‘PEOPLE!’ invites brand enthusiasts worldwide to submit photos of themselves wearing at least two items from the retailer’s current collection. Several photos are chosen each week and featured on the brand site and a dedicated Facebook tab, and the selfstyled models in each selected shot receive €300. The photos are shareable via Twitter and Facebook, and users can add the products featured directly to their shopping carts. The campaign has helped fuel Zara's impressive Facebook fan growth: Thirty percent over the past six months, an average of almost 12,000 new fans per day.

Looks are shoppable directly from the photos

Digital IQ Index ®:

European Specialty Retail

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f las h o f g e n i us

Bespoke E-Commerce Marks & Spencer allows customers to create bespoke items of clothing from its men’s and women’s collections online. Men can self-tailor jeans, chinos, and shirts, while women can customize jeans, black dresses, and black formal trousers. The men’s “made-to-measure shirts” feature is by far the most

Marks & Spencer allows shoppers to customize six products online

comprehensive, allowing shoppers to select fabrics, as well as nine different design elements including collar and cuff styles. Women’s black dresses can be customized by style, sleeve, and hem length. In addition M&S TV houses a vast collection of shareable videos. A shoppable scrolling feed displays the products featured in a video as it plays, and a pop-up shows a complete product list at the end. Christmas videos are also embedded with a scrolling Twitter 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

Digital IQ Index ®:

European Specialty Retail

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f las h o f g e n i us The Selfridges “Project Ocean” Facebook page

Project Ocean In May, Selfridges launched “Project Ocean,” an activist initiative to raise awareness of overfishing. The campaign successfully integrates offline and online elements with a dedicated Facebook page, Twitter handle, and microsite. In the spring, Selfridges turned the windows of its Oxford Street store in London into an interactive touch-screen display of the ocean. For every donation, another fish was added to the sea, and shoppers could interact with the installation by clicking the fish to view the species and the name of the donor. A similar interactive ocean feature is housed on the microsite to display campaign donations. The online content is shareable via Facebook and Twitter, and donations can also be made using SMS; To date, £120,279 has been raised.

The interactive online ocean displays a fish for every donation

Digital IQ Index ®:

European Specialty Retail

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f las h o f g e n i us 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 fragrance

L.12.12 Launch To celebrate the launch of its flagship men’s scent collection, EAU DE LACOSTE L.12.12, Lacoste commissioned a light installation from design agency Tronic that was displayed in New York’s Grand Central Terminal from September 19 to 27. A dedicated microsite solicited user-generated video sequences that animated a virtual transformation of the classic L.12.12 polo shirt into a fragrance bottle. Visitors to the microsite could customize their video sequence with their name, location, a background theme, and color of their choosing. The 20-second videos were projected onto the Grand Central Terminal installation and streamed live on the microsite. Video contributors were emailed their projection time so they could visit Grand Central to view them in person or tune in via the live stream. During the campaign, 35,000 user-generated videos were projected. Lacoste promoted the project on Facebook by holding a fan-exclusive contest to win a trip to the La Machine L.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

Digital IQ Index ®:

European Specialty Retail

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f las h o f g e n i us

‘Arrive Half Naked— Leave Fully Dressed’ In June, Desigual held a promotion that aptly reflected its unconventional style. The retailer held identical events at the Desigual stores in London, Stockholm, Berlin, Madrid, Prague, and New York during which the first 100 people to line up in their underwear before the store opened could choose one top and one bottom for free. Everyone else received 50 percent off the summer collection as a consolation prize. The retailer encouraged participants to take photos on Instagram and tag them #desigualevents. Videos promoting and covering the undressed are the most viewed on desigual’s YouTube channel.

Desigual encouraged 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

Digital IQ Index ®:

European Specialty Retail

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TEAM SCOTT GALLOWAY Clinical Professor of Marketing, NYU Stern Founder, L2 Scott is a Clinical Professor at the NYU Stern School of Business where he teaches brand strategy and luxury marketing and is the founder of L2, a think tank for prestige brands. Scott is also the founder of Firebrand Partners, an operational activist firm that has invested more than $1 billion in U.S. consumer and media companies. In 1997, he founded Red Envelope, an Internetbased branded consumer gift retailer. In 1992, Scott founded Prophet, a brand strategy consultancy that employs more than 120 professionals in the United States, Europe, and Asia. Scott was elected to the World Economic Forum’s “Global Leaders of Tomorrow,” which recognizes 100 individuals under the age of 40 “whose accomplishments have had impact on a global level.”

Before joining L2, Maureen was with Triage Consulting Group and led managed care payment review and payment benchmarking projects for hospitals, including UCLA Medical Center, UCSF, and HCA. Maureen has a B.A. in Human Biology from Stanford University and an M.B.A. from NYU Stern. FRED BROWN Brand Translation Expert, Last Exit

Scott has served on the boards of directors of Eddie Bauer (Nasdaq: EBHI), The New York Times Company (NYSE: NYT), Gateway Computer, eco-America, and UC Berkeley’s Haas School of Business. He received a B.A. from UCLA and an M.B.A. from UC Berkeley.

Fred is managing director of Last Exit’s London office where he leads web, social media, mobile, SEO, and eDM projects for clients, including Belvedere, MediaCom, F&F, and numerous medical, aerospace, and logistics brands. He began his career as an industrial designer, working on such projects as the Airbus A380, Panasonic cell phones, and Polaroid cameras. In 1999, Fred launched award-winning new media agency Deepend’s first North American office in New York with fellow Last Exit partner Nuri Djavit. Together, they led digital projects for clients, including FIT, Kenneth Cole, and Salomon Smith Barney. He has a First Class Honours Degree from London South Bank University and has served on the board of British Design Innovation.

Véronique Valcu L2

Fred was assisted in the study by Daniel Saxton, a Senior Creative at Last Exit experienced in multi channel pan-European digital work for brands in the fashion and retail sectors.

Véronique began her career in Deloitte Consulting’s Strategy & Operations practice where she worked with some of the world’s largest corporations in retail, manufacturing, and pharma. While there, she conducted extensive social media analyses of consumer-facing brands and contributed to the firm’s growing interest in the space. Post Deloitte, she moved to the Winterberry Group where she performed strategic consulting for advertising and marketing services companies. At L2, Véronique serves as the Specialty Retail and European research lead.

Emily Hallquist L2

She received her B.A. in Communications from the University of Pennsylvania.

Emily is a research associate at L2 where she works with the research team on the Digital IQ Index® reports. Her background is in international relations, and she interned last year with International Business-Government Counsellors (IBC) in Washington, D.C.. At IBC, she assisted on client engagements pertaining to their global operations. Emily received a B.A. in Public Policy with minors in Earth and Ocean Sciences and Political Science from Duke University.

Maureen Mullen L2

R. Danielle Bailey L2

Maureen leads L2’s research and advisory practice where she helped develop the Digital IQ Index®. She has benchmarked the digital marketing, e-commerce, and social media efforts of more than 300 brands across pharma, auto, luxury, specialty retail, beauty, and the public sector. Maureen also has led digital strategy consulting engagements for a variety of Fortune 1000 clients.

Danielle began her career at The Home Depot, Inc., where she led a variety of internal consulting engagements focused on supply chain, merchandising, and in-store process improvement. She went on to manage the implementation of award-winning mobile initiatives for several large media clients, including The New York Times Company, NBC Universal, Disney/ABC, Maxim

magazine, and Zagat. Danielle has a B.S. in Systems Engineering from the University of Virginia and an M.B.A. from NYU Stern. CHRISTINE PATTON Creative Director, L2 Christine is a brand and marketing consultant with more than 15 years of experience creating brand identities and marketing communications for aspirational and luxury brands. As creative director of L2, she leads the translation of the L2 brand across all touchpoints, with a particular focus on the visual packaging of L2’s research. She began her career at Cosí, where she developed the brand and oversaw its evolution from concept through growth to 100 restaurants. Since then she has provided creative direction for a wide array of clients, including the launch of Kidville and CosmoGIRL! magazine. Christine received a B.A. in Economics and Journalism from the University of Connecticut and an M.B.A from NYU Stern. Jessica Braga L2 Jessica, a freelance art director, specializes in identity, iconography, event graphics, and invitations. She began her career in fashion, designing textiles and prints at Elie Tahari’s studio in New York City, and then focused on the Elie Tahari brand aesthetic and consistency in design across its many developing disciplines. Desiring to explore other facets of design, she went on to become the art director of a small, prestigious design firm in Chelsea, where she focused on event graphics, digital and print collateral, and brand aesthetics for companies both large and small. Jessica holds a B.F.A. in Graphic Design, and an A.A.S. in Illustration from Rochester Institute of Technology. Aaron Bunge L2 Aaron is a freelance graphic designer who specializes in print design, branding and identity, packaging, and web design. His approach is both aesthetic and functional, characterized by clear, intelligent design appropriate to the project at hand. He began his career tailoring projects for the Chinese, Australian, and U.S. markets across multiple design disciplines and in multiple languages. Aaron has a B.F.A. in Graphic Design from Iowa State University.

UPCOMING EVENTS L2 Clinic Mobile

L2 is a think tank for digital innovation. We are a membership organization that brings together thought leadership from academia and industry to drive digital marketing innovation.

01.19.12 New York City 01.24.12 Paris

L2 Lunch Identifying Facebook Super Fans Resear ch

02.23.12 New York City

Digital IQ Index®: The definitive benchmark for online competence, Digital IQ Index® reports score brands against peers on more than 350 quantitative and qualitative data points, diagnosing their digital strengths and weaknesses.

L2 Clinic Mobile in APAC 03.02.12 Shanghai

EVEN T S Forums: Big-picture thinking and game-changing innovations meet education and entertainment.

L2 Lunch Google+ vs. Facebook

The largest gatherings of prestige executives in North America.

03.06.12 Paris

300+ attendees Clinics: Executive education in a classroom setting with a balance of theory, tactics, and case studies.

120 –150 attendees

UPCOMING Research

Working 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 IQ

40 – 60 attendees

Broadcast Media

Brazil, Russia, India

Magazines

Facebook IQ

MBA Mashups: Access and introduction to digital marketing talent from top business schools.

co n s ult ing Advisory 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.

upcoming member benEfits Members Site: In the first quarter L2 will launch real-time tracking of digital

MEM BE R SHIP For membership info and inquiries: membership@L2ThinkTank.com

metrics (vs. peers).

A Think Tank for DIGITAL INNOVATION

51 East 12th Street, 2nd Floor New York, NY 10003 W: L2ThinkTank.com E: info@L2ThinkTank.com

ÂŠ L2 2011 L2ThinkTank.com