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L2’S DIGITAL IQ INDEX: TIFFANY BEATS OUT BLUE NILE; EMAIL STILL TOPS FOR ONLINE MARKETING | September 12, 2012 (0 comments)
New York, NY—Tiffany, Cartier, Swatch, Tourneau, Swarovski, and Zales all were named among 100 specialty retailers studied in the most recent Digital IQ Index conducted by L2 ThinkTank. E-tailer Blue Nile also was named to the list.
L2 is a membership organization that helps brands navigate the digital world. Its Digital IQ Index, conducted regularly in different categories, is a leading benchmark for digital performance of prestige brands.
In L2’s recent study of specialty retailers’ digital savvy, released last week, Tiffany came in highest among jewelers and watch retailers. The jeweler tied for number 16 with apparel retailer Urban Outfitters and accessories brand Steve Madden. A digital IQ score of 110 placed Tiffany in the “gifted” profile, though barely. But pure play e-tailer Blue Nile, which ranked 26th, only fell into the “average” profile, tied with luxury specialty store Barneys New York. Cartier, also deemed “average,” was ranked 46th, tied with traditional apparel retailer Brooks Brothers and hip jeans brand Seven for All Mankind.
Zales, ranked number 55, still ranked “average” in its digital IQ, but barely. Like Tiffany, its ranking was the lowest entry into the profile. Tourneau, ranked 63, fell into the “challenged” profile. Luckily, no jewelers fell into the lowest profile, “feeble,” which was reserved for Swiss chocolate maker Lindt and American furniture retailer Ethan Allen.
The list also contained seven important retailers who sell luxury fine jewelry but that are not exclusively jewelers: Nordstrom, Bloomingdales, Saks Fifth Avenue, Net-A-Porter, Barneys New York, Neiman Marcus, and Bergdorf Goodman. Three of these—Nordstrom, Bloomingdales, and Saks Fifth Avenue—were ranked in the top 10, with Nordstrom being classified as a “genius” at digital marketing, coming in second only behind number-one Macy’s.
But the L2 study also identified two key threats for brick-and-mortar retailers: mobile shopping—which it projects to grow 30%-40% per year—and Amazon.com, which is not only affecting big box retailers but also now is making inroads into prestige brands such as Cartier, Swarovski, and Tumi. Watch a video explanation here.
E-tail behemoth Amazon.com now poses a threat to prestige specialty retailers, not just big-box stores, says L2. This screen from L2's specialty retail summary video shows a pair of Cartier sunglasses on Amazon.
L2’s Digital IQ rankings were based on how well each retailer uses mobile, social media, and digital marketing strategies such as email, blog, search, and innovative advertising. These digital marketing efforts counted for 30% of the score, while 40% of a retailer’s total score was based on the effectiveness of its website. 90% of the evaluation of a retailer’s website focused on its functionality; brand translation mattered only 10%.
Effective use of mobile counted for 20% of a retailer’s score. Mobile excellence was based on functionality, compatibility, availability (iPhone and Android), transaction capability, and innovation. Social media, meanwhile, counted for 10% of the retailer’s total score, and assessed brand presence, community size, content, and engagement.
Brands’ own sites continue to be the primary revenue generators online, says the study, but only 50% of brands incorporate conversion-enhancing user reviews, and the percentage of retailers who employ live chat technology actually dropped from earlier studies.
Ironically, only 65% of retailers use the Facebook “like” button, despite the seemingly ubiquitous presence of the site’s iconic “thumbs up” icon. Facebook remains a valuable source of incremental traffic, says L2. Even if its stock price is down, don’t discount its importance as a traffic driver to retailer sites.
Investing in digital should be a priority for retailers, says L2. Over a three-month period, those brands considered “geniuses” had a lot more sticking power than those considered “feeble.” Visitors spent twice as much time on the genius sites than the feeble ones.
Email rules. According to the L2 study, email marketing still has the highest conversion rate to website traffic. 4.25% of email recipients continue to the retailer’s website, vs. 2.49% from search and 0.59% from social media. This reinforces email’s role as a crucial element of a prestige retailer’s digital marketing mix.
Email open rates have fallen on PCs—but the number of retailer emails opened on a mobile device doubled between the end of 2010 and 2011. Retailers should invest in optimizing their email for mobile, says L2. The study also found that 70% of mobile users simply delete an email that doesn’t render well on their device. You don’t want to be deleted—L2 says 82% of smart phone owners use the device to help with shopping in-store, and that all signs point to a future built around mobile.
Isn’t it tweet? L2 also measured each retailer’s responsiveness to customer inquiries on Twitter. Most retailers—more than 75%—responded within 24 hours, but only 8% responded in less than an hour. L2 recommends these best practices: respond quickly, because Twitter users expect a response 100% of the time. Prioritize responses to questions first, then to brand statements. Provide recommendations of items to shoppers with relevant links, and suggest connecting over the phone to resolve the shopper’s issue.
Stick it to me! Pinterest was the top site among emerging social media. 32% of online shoppers have made a purchase based on something they’ve seen on Pinterest, says L2. 86% of prestige brands now have a presence on the site, and of those, almost all (96%) provide a link to their own website. But only 14% put prices on pinned products, and only 23% have boards dedicated to user-generated content.
Among emerging social media, Google+ and Instagram have the best penetration after Pinterest, with 73% of brands having presence on Google+ and 71% having presence on Instagram. Tumblr is falling behind, at 42%.