Most Recent Articles In Digital
Latest Digital Articles
- Polyvore Adds Men’s Category
- Joyus Partners With The Limited on Career-minded Content
- Yahoo to Merge, Shutter Some Digital Magazines
More Articles By
NEW YORK — Social media is starting to play a smaller role in overall digital initiatives as e-commerce becomes the most important aspect of retailers’ online strategies.
At least that’s what New York University Luxury Lab, or L2, believes. The think tank today will release its third annual Digital IQ Index ranking retailers according to their online competence. The study includes 76 global brands and measures them on more than 675 data points spanning four metrics divided in the following way: 40 percent Web site, 30 percent digital marketing, 20 percent mobile and 10 percent social media.
This story first appeared in the September 6, 2012 issue of WWD. Subscribe Today.
For the second year in a row, Macy’s took the top spot, followed by Nordstrom, Victoria’s Secret, Sephora and American Eagle Outfitters. J.C. Penney, Bloomingdale’s, Crate & Barrel, Gap and Saks Fifth Avenue rounded out the top 10.
Maureen Mullen, L2 director of research and advisory, noted that the weighting around social media was reduced considerably in this year’s study — it was cut in half from 20 percent last year. That wasn’t because social media isn’t important but because it hasn’t lived up to the hype and the lack of metrics that illustrate how social leads directly to sales still makes for an uncertain investment for many retailers and brands.
“There are now retailers driving 25 percent of more of sales through their e-commerce channel, and we really believe that the percentage of sales that an organization is doing online and how fast that percentage is growing could be the primary differentiator from the winners and the losers in the specialty retail space,” Mullen told WWD.
She said that Macy’s online sales are now more than $2.25 billion annually and, for the first time, there is a correlation between the size of a company’s business and its Digital IQ. Previously, Mullen viewed digital as an area where smaller retailers could compete with the major players — the one-door Bergdorf Goodman is a perfect example with its ever-evolving social media presence — but this is no longer the case.
Because it’s invested more in e-commerce than social media, Saks Fifth Avenue’s Web site earned the number-10 spot in the study (up 8 percent year-over-year). It’s for this same reason that Bergdorf Goodman fell from the 22nd spot last year to 54th in 2012. While the luxury department store is in an elite top five of retailers in respect to social media, it’s been slower to upgrade its e-commerce operation, according to Mullen.
Other disappointments this year: Bluefly’s Digital IQ dropped 45 percent year-over-year, Diesel’s by 44 percent, Brooks Brothers by 36 percent and Neiman Marcus by 29 percent. On the flip side, White House|Black Market’s high site and customer service scores helped propel its ranking up 37 percent, followed by Lululemon by 36 percent, Swatch by 33 percent and Tumi and Banana Republic by 29 percent.
Another big story this year is Amazon — which currently commands 37 percent of domestic mobile commerce (the most rapidly growing commerce channel). Mullen calls Amazon “the big-box e-tailer” that’s changing online shopping as we know it — citing the introduction of Amazon Prime as one of the biggest innovations in the space in the past 15 years.
“The primary difference between in-store and e-commerce is that in-store gives you a sense of immediacy that you can instantly fulfill the purchase. What Amazon has effectively done is lower that barrier of entry,” Mullen said, adding that, now, retailers like Macy’s are looking into same-day delivery options within large metro areas. This means that Macy’s might soon be able to fulfill an online purchase out of any of its stores nationwide. “This will allow them to begin to compete with Amazon in terms of that immediacy.”