L2 Study Reveals Shortfalls in Digital Competence

Digital IQ Index 2011, Greatest Year-Over-Year Gain or Loss, 2010 vs. 2011 Digital IQ Percentile Rank | Source: L2

NEW YORK, United States — On Monday, Professor Scott Galloway’s NYU-based thinktank LuxuryLab, or L2, released advance copies of their third annual “Digital IQ” report, assessing the digital competence of 49 global fashion and leather goods firms, to a small number of media outlets, including BoF.

According to the study, which will be published later today, fashion brands are embracing digital innovation with enthusiasm and have been amongst the first to pilot forward-thinking marketing initiatives on platforms like Foursquare, Tumblr and the fashion flock’s current obsession, photo-sharing app Instagram. “Some programs could best be described as bleeding edge,” says the study, referring to Ralph Lauren’s experimentation with ‘4D’ projection mapping technology.

But a closer reading reveals that a majority of fashion companies — in a sector which trades on being perfectly contemporary and thinks in terms of trend cycles — still regard the rise of digital media as a trend to be exploited, first and foremost, for its PR and image value.

“Brands are seeking the halo of innovation that comes from inspired online programming,” says the study. “However, most fashion brands still approach digital as a series of pet projects rather than presenting a coherent multi-platform strategy.”

While digital darling Burberry claimed first place in the rankings, more revealing was the poor performance of top brands like Hermès and Prada which have failed to keep pace with innovation, falling from “Gifted” in 2009 to “Challenged” in 2011. “Hubris has infected them with complacency online,” says the study, noting that Prada still doesn’t maintain any official presence on social media, including Facebook, where a “rogue page” maintained by a Prada brand loyalist has attracted more than 800,000 fans.

Interestingly, the report also reveals that the European conglomerates which own many of the world’s top fashion houses appear to be doing little to facilitate knowledge sharing amongst their brands, evidenced by wildly uneven digital competence scores within the major groups. At LVMH, for example, Louis Vuitton is ranked “Gifted,” while Givenchy came in 48th place amongst the 49 brands included in the study. At PPR, Gucci is ranked “Genius” while Balenciaga, one of the industry’s most forward-thinking brands in terms of design, remains “Challenged” when it comes to digital.

Download the full Digital IQ Index here

Vikram Alexei Kansara is Managing Editor of The Business of Fashion

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  1. Isn’t it odd that Luxury Lab has so arrogantly taken it upon itself to rate and admonish brands’ digital strategies in a complete vacuum? Are we really supposed to believe that L2 knows intimately each brand’s strategy. Maybe some brands don’t believe certain digital strategies are correct for them at the moment. Some brands might not even want a digital plan — why run with the pack? Who is to say what’s best — a consultant (likely college interns) working in a vacuum or the brand’s management? Smart brands don’t do the same thing as everybody else but the clowns at L2 think they should vis a vis a pre-formatted digital strategy. This only underscores their lack of fresh thinking.

    David Royce from Fairford, Gloucestershire, United Kingdom
  2. Respectfully, the above comment makes no sense. The L2 assessment is based on the customer facing reality in the public domain over the last year.

    I don’t believe that any strategy is punished in the report for being different. They simply offer an opinion on whether each company has been effective year over year.

    Opinions are always somewhat subjective, but it is always interesting to identify commonalities that can be applied across brands or product lines to enhance consumer satisfaction and capital productivity.

    Where in the report do you think L2 was off base and missed some fresh thinking?

    David E from Round Lake, IL, United States
  3. First of all, the ‘lack of fresh thinking’ comes from their own idea that there is definitive metric on what signifies digital success in the garment business. This is presumptuous. The minute a self-appointed expert is telling everyone. for example that they should be on Facebook, twitter, et al, we have a lack of fresh thinking. These people have an agenda. They want to promote social media. When everybody runs in a pack it’s time for real ‘fresh thinking’ and to try another tack (unless you want to be like everybody else). Second, L2 punishes by implying one brand is ranked, say, #50, while another is ranked Top 3. There are no absolutes here, yet L2 thinks there — that their assessment of a third party brand into whose boardrooms they’ve never been, is correct. Anyway, these “reports” are really self-aggrandising and I will not waste any more time helping them with their selfish agenda.

    David Royce from Fairford, Gloucestershire, United Kingdom
  4. I don’t associate “luxury” with Facebook in anyway, and I feel that these companies splashing themselves all over the latest social media outlet kind of cheapens the brand. I respect Burberry for how they’ve embraced the new digital realm, but something about the idea of Hermés having a Twitter account makes my skin crawl.

    Lindsey from New York, NY, United States
  5. I disagree with the fact that Facebook/Twitter cheapens a brand. It would only do so if the market it addresses did not use the platform, which let’s admit, isn’t true. Social media offers the opportunity for someone to connect with a brand, which is critical if they cannot financially support actual purchases. It’s a way of enhancing the desire to become a customer later on. Furthermore, it provides brand news directly from the source which is refreshing from the usual WWD and Style.com, or worse, a biased opinion from the retailers that carry them.

    Victoria from Toronto, ON, Canada