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For fashion companies, 2009 is turning out to be the year of social media.

Once reluctant to cede control, brands and retailers from low to high are embracing social media and using it to boost sales and brand awareness. Having a presence on the top five social sites — Twitter, Facebook, MySpace, Flickr and YouTube — is de rigueur. The top luxury fashion brands on Facebook in terms of fans are Gucci, Chanel, Dolce & Gabbana, Ralph Lauren, Coach and Prada (although the Prada page is an unofficial one), according to New York University professor of marketing and Red Envelope founder Scott Galloway. Luxury fashion brands with the most Twitter followers are Vuitton, Tory Burch, Yves Saint Laurent and Christian Dior.

This story first appeared in the September 28, 2009 issue of WWD. Subscribe Today.

“Traditionally, luxury brands built relationships with customers through flagship stores, traditional public relations and advertising,” said Galloway. “Now they’re building relationships through Facebook, user reviews and consummating the transaction [online].” Of course, the product remains paramount, he said.

But companies now are going way beyond simply posting pages on those sites. They’re building their own social networks, games, iPhone applications and cross-platform advertising campaigns, and partnering with third-party social sites focused on fashion, such as the search engine Shopstyle, the fashion social network and outfit-sharing site Chictopia, and the outfit-building site Polyvore. For several years, they have been reaching out to bloggers and writing their own blogs, which boosts their rank in searches. Macy’s, Urban Outfitters, Zappos and other retailers have found user reviews (and user-contributed photos and videos) increase sales. Saks Fifth Avenue, Urban Outfitters and others show which items are most popular among shoppers, which can push a popular item to selling out.

Despite all the hype and hubbub, though, and the success of eBay, Etsy and Amazon, these remain early days for social media and fashion. Threadless, the small online retailer of crowd-sourced graphic T-shirts, is one of the first successful apparel makers whose business model is based on social media, and so far no designer has made their name using the medium.

Some brands, especially luxury ones, remain reluctant to dive too deeply into the social media waters. NYU’s Galloway last week released the first annual ranking of the digital competence of luxury brands, called the Digital IQ Index. A group of 109 companies were evaluated and ranked on a variety of metrics, including the interactivity of their site, e-commerce, traffic and how well they use social media.

The winner in the fashion category was Louis Vuitton, closely followed by Ralph Lauren. Marc Jacobs and Yves Saint Laurent were described as “challenged,” and Bottega Veneta was called “feeble.” Stila and several watch and jewelry companies also fell into that category.

Prada ranked as “gifted,” but only because it is one of the most highly searched fashion terms on the Web and therefore has huge amounts of traffic. Otherwise, the site scored poorly. “If it doesn’t get its act together, it’s going to experience a dramatic fall from grace,” Galloway said.

While the social Web is probably having the biggest impact on media, music, entertainment and making personal connections, in the fashion sphere, the Internet has made celebrities of Cory Kennedy, Fred Figglehorn, Scott Schuman of the Sartorialist, Yvan Rodic of Facehunter and Perez Hilton, among others. In fact, so much so that Schuman and fellow bloggers Garance Doré, Tommy Ton and Bryan Boy were given front-row seats at the D&G show in Milan on Thursday, complete with desks and laptops for instant transmission, knocking the likes of Neiman Marcus’ Burt Tansky, Saks’ Stephen I. Sadove and other retail heavyweights to the second row.

Another big change is that people who love fashion and are driven to constantly seek out new things can upload photos of their own discoveries or see what people around the globe are wearing in a minute, just by going to one of the dozens of photo-sharing or streetwear blogs, such as Schuman’s, that chronicle fashion. It is more immediate, in-depth and less mediated than traditional media. What’s more, it has accelerated the spread of trends around the world, users say. Print magazines have responded by posting street photos on their own Web sites.

According to a study released in July by Hill & Knowlton, 27 percent of Generation Y say they are influenced by an “online community or blog,” compared with 9 percent of Baby Boomers and 19 percent of Generation X. Meanwhile, traditional media continues to be important among all age groups, with 19 percent of respondents saying they are influenced by print articles and 12 percent by radio or television programs.

In the past six to nine months, retailers have joined social sites in droves. According to the publication Internet Retailer, 56.8 percent of the Internet Retailer Top 500 have a page on Facebook, 41.4 percent have a channel on YouTube, 28.6 percent are on MySpace and 20.4 percent are tweeting.

The most obvious and measurable effect of what Galloway has termed “social media optimization” is directing traffic and sales to a company’s Web site. Search engines are still the king of traffic, followed closely by the e-mail messages most retailers send out daily, but social media is growing quickly.

As a result, it is rare these days to find a fashion company with e-commerce that isn’t doing something with social media. Juicy, St. John, Tory Burch, Ralph Lauren, Gucci, Vuitton, Oscar de la Renta, Sears, Urban Outfitters, American Apparel, Topshop and Wet Seal are some of the better-known brands that have been at the cutting edge of using it in innovative ways to boost brand awareness and sales and communicate with their customers.

“Some sites are now getting 10 percent or more of their traffic from Facebook,” said Galloway. Two years ago, it was zero. The fastest-growing segment on Facebook is 45- to 55-year-old women, which is the sweet spot for luxury brands to target. Facebook is among the top 10 referral sites for more than half of the top luxury brands, he said.

Brands that have a strong social media optimization strategy — with a presence on all five sites or more — could be getting a third of their traffic from social media sites, according to Galloway. What’s more, he warned, companies that embrace social media could potentially have double the online traffic in the next few years versus those that don’t.

But traffic is just the tip of the iceberg. “Branding online primarily will happen through social media,” said Marco Corsaro, founder and chief executive officer of new-media consultancy 77Agency, which has been holding social media seminars for luxury marketers. “The only question is how big this will be.”

Among the agency’s fashion clients, the majority of traffic comes from people typing in the URL directly, the second from Google and the third from Facebook, he said.

Another benefit of social media is that it allows companies to understand their customers and get feedback from them, according to firms who use it.

Saks, Theory and Topshop are among the fashion companies that have created events or campaigns that mash together the online and offline worlds. “Integrating offline and online is something we’re doing more and more of,” said Topshop head of marketing Sheena Sauvaire. “Our customer is online all the time now. It’s increasingly the medium they’re using.”

The company was one of the first to have a widget on Facebook, which shows the latest looks each week. Shoppers can click through to the Topshop Web site to buy. Even before the company had an official page, about 20 percent of its online traffic was coming from Facebook — either from the unofficial page or the widget, said Sauvaire.

Topshop’s blog is the home for everything that inspires the staff, and everyone in the office contributes. “Maybe they’ve gone to a fantastic exhibition or gig or they’ve seen an amazing pair of vintage shoes in a shop,” she said. Many customers comment, “so it’s becoming a great forum to hear what people think of our brand and product,” she added.

Two people on the e-commerce marketing team focus on digital marketing, of which social media plays a big part.

American Apparel is one of the biggest online advertisers, with more than 100 million impressions every month, much of it on niche social sites that its customer frequents. In August, the retailer ran ads on Chictopia featuring users on the site who were also fashion bloggers. The ads also ran on the blogs. One of the models also became a photographer for the company.

“They converted very well, although I can’t give you specific numbers,” said American Apparel’s Ryan Holiday, who handles the company’s online advertising. “A big part of it was showing that American Apparel is paying attention, and we appreciate the contribution these girls and these sites are making to the industry. We’re trying to look at advertising as more than just a way to put our ad on a site and hope it generates sales. We’re using them as a way to become active or support or be a participant in some of these communities.”

Social media is so pervasive in everything the company does that Holiday does not see it as a separate form of marketing or Internet activity. Both print and online advertising are important, he said. “Offline American Apparel ads — people talk about them; they are a source of discussion and controversy. I think the term is ‘social objects.’ That’s how our Internet ads work, too. In our case, there’s no distinction between social media [marketing] and advertising. If our advertising isn’t social, then it’s not working.”

Yet, according to Forrester Research Inc., companies are shifting their marketing dollars away from traditional media and toward interactive marketing. The category will grow to $55 billion and represent 21 percent of all marketing spending in 2014, the company predicted in a July report.

The study surveyed 204 marketers in a variety of industries, including finance and health care, and 60 percent said they planned to increase their budget for interactive marketing by spending less on traditional marketing. Direct mail, newspapers and magazines were forecast to take the biggest hits. This year, marketers will spend $716 million on social media marketing, with the bulk of their online advertising budgets going toward search, display advertising and e-mail. Forrester predicts social media will see the steepest growth of any vehicle over the next five years, with a compound annual growth rate of 34 percent.

Sixty-four percent of respondents said they are involved in social media, and 22 percent said they plan to be by the end of this year.

A small online streetwear boutique in the heart of Silicon Valley with employees who are veterans of digital companies is a case study in how to use social media. made its debut in December and specializes in unknown indie labels usually too obscure to show up on search engines.

“Independent fashion is all about finding, searching, wearing and discussing, so in a lot of ways, our category is tailor-made for social media,” said ceo Jon Farhner. Farhner came from Zappos, and director of marketing Julie Kung is from Google. The Palo Alto, Calif.-based company received $1.1 million in funding from Alloy Ventures in April 2008.

Blog outreach has helped the unknown company create trust among potential shoppers, and the company uses Twitter to introduce new lines. Rather than use Twitter to hard sell, the company uses it to inform people about “cool stories” about designers and the inspiration for a product.

When Moxsie introduces a new brand, Kung targets a small number of fashion bloggers who retweet her comments. To test the reach of the strategy, Kung tracked one URL (a brand page on Moxsie) and discovered it could have been viewed by 25,000 people (if they were checking Twitter at the time). It received 2,000 click-throughs — at no charge to Moxsie.

“You can’t just put up a billboard and expect there to be a reaction,” said Farhner. “The interaction is directed by the community. You can’t disrupt the flow — you have to contribute to the interaction, rather than telling people to do things, or they reject you.”

About 30 percent of Moxsie’s traffic is direct, meaning someone types in its URL. Kung said they suspect much of that comes from social media such as blogs, but it can’t be traced. About 40 percent is search the company pays for, and organic search is 10 percent. E-mail is 15 percent.

The company updates its Facebook feed three to four times a week and is popular on Polyvore. Moxsie reshot its clothes without models so the images would be easy to use on the site.

“Polyvore stands out as being the most successful for us,” said Farhner. “Our stuff has been picked up thousands of times,” and people do actually click through and buy, he said.

Moxsie has partnered with Chictopia and also has its own blog, as well as widgets that show new arrivals in the sneaker and jewelry shops. The company would consider banner ads on sites with the right demographic, such as Polyvore and Facebook, but they are not as targeted as other methods, said Kung.

Designers also are exploring more unexpected initiatives. Ralph Lauren earlier this month introduced a second iPhone application with social features. Shoppers can customize Rugby clothes with patches, share and vote on designs and order them over the iPhone. Looks can be e-mailed, posted on Facebook or sent to the Rugby gallery, which will appear on the Rugby site, in the iPhone app and also in store windows in San Francisco and New York.

During New York Fashion Week, Norma Kamali and Jillian Lewis unveiled their collections virtually as well as on the runway, with avatars and virtual clothing on Roiworld and Cellufun.

Another Internet start-up, Enveme, is using a virtual world as well as other forms of social media and music to foster community and drive traffic to its online clothing store as well as provide a revenue stream. Its virtual world, EnveZones, is an area in the already established virtual world of VZones, which members can also access. Enveme is charging $11 a month for avatars clad in virtual versions of actual Enveme clothes. Whether the retailer flops and vanishes into obscurity or succeeds on the scale of a Hot Topic or Forever 21, it is, along with Threadless, one of the first fashion retailers whose business model is based on social media.

Whereas virtual worlds have yet to prove profitable for fashion companies, firms have had great success with outfit-building games.

Juicy and Wet Seal have added social networks built around Polyvore-style outfit-creation games to their sites. The results have been impressive. At Wet Seal, conversion rates double when a shopper visits the community, and 25 percent of buyers visit, said Wet Seal chief information officer Jon Kubo.

Juicy has more than 50,000 members in Club Couture. Those who visit increase page views 141 percent a visit, spend 150 percent more time on the site and buy 162 percent more often.

“The customers are talking to each other — you have to do very little work,” said Juicy Couture vice president of global marketing Frances Pennington.

“Social media is another way to take our advertising 360 degrees,” said Pennington. “We still believe in print media, and our fall campaign shows that. We have multiple page insets in many of the big books. We’ve taken to also showing it on our Web site. It expands our advertising, it doesn’t replace it. It’s just another platform.”

In June, St. John added a full-fledged social networking community similar to Facebook to its revamped online store. The company has not yet discussed publicly how it has been received.

As social media becomes pervasive, it is making it possible for anyone to share, collaborate with others and develop an audience or market online.

“Palo Alto isn’t the fashion capital of the world, and it shows you the power of what you can do on the Internet,” said Farhner of Moxie. “Blogs are coming from all over. You’d think they were from Manhattan with the confidence they talk about fashion. Because everything’s moving to the Internet, we’ve been embraced by boutique shoppers. Historically, this is a category that wouldn’t have worked online. You have to look at it as a changing landscape. Five years ago, two sisters in Atlanta wouldn’t have a blog that 150 people comment on. These are all new things,” he said.


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