The Digital IQ Index scores 79 luxury brands in 11 categories including fashion, beauty and skincare, watches, and automobiles and measures brands’ effectiveness in digital competence based on criteria including search engine optimization, brand translation, ability to leverage technology, and use of social media.
According to Scott Galloway, founder of Luxury Lab, the “combination of the economic crisis, the emergence of a more digitally native Gen Y consumer, and several brands getting huge ROI—sales and press—due to digital leadership, inspired a massive investment in both human and financial capital in digital in 2010.”
‘Genius’ vs ‘Feeble’
Apparel and leathergoods brands dominate the top 10 this year and have had the most progress. The 16 fashion and leathergoods brands ranked in both 2009 and 2010 increased their Digital IQ by an average of 24 points. Topping this year’s list is Coach, which scored “an increase in Digital IQ of 63 points, jumping from the middle of the pack last year to claim the top spot” this year. Other brands scoring high were Ralph Lauren, Louis Vuitton, Gucci, Burberry and Dolce & Gabbana, all of which earned the “Genius” ranking, which assesses brand websites, digital marketing, social media and mobile presence.
Coincidentially, Ralph Lauren announced today that it will expand its e-commerce reach with a Polo Ralph Lauren launch in the United Kingdom this month.The website will features a Style Guide, with tips on signature Ralph Lauren looks and trends, and RL Magazine. The company’s e-commerce site first launched in the United States 10 years ago.
Two categories hit hard by the recession, watches and jewelry, dropped in the Digital IQ Index. Watch and jewelry brands actually lost an average of 9 points, with Rolex, Cartier and Chopard falling more than two IQ classes.
Other fashion brands are lagging, too, Galloway says, adding they “are sitting on their hands…hoping this whole ‘internet’ thing will go away,” Ermenegildo Zegna, Bally, Balenciaga, Chloe, Versace and Alexander McQueen are all ranked as “Challenged,” while Dunhill, Catherine Malandrino, Ferragamo, Zac Posen, Tods and Manolo Blahnik are ranked as “Feeble.”
Social Media Increases
According to the survey, 90% of luxury brands in the survey are present on Facebook, up from 79% in 2009, and the percentage of traffic luxury brands are receiving from Facebook has more than doubled in last 12 months, growing from 3.4% to 7.1%. But a Facebook presence includes participating in the web community. The report concludes that brands which used social sharing tools — for instance, the Facebook “like” feature— registered annual traffic growth of 42% vs. 18% for brands that did not.