NEW YORK, United States — In the first-ever 'Digital IQ' ranking of the top luxury fashion brands' digital competence, Louis Vuitton has come out on top, followed closely by Ralph Lauren. Both are ranked as 'genius' in the wide-ranging qualitative and quantitative study which covers 109 brands across the luxury spectrum, not just fashion. The study was authored by Scott Galloway, Clinical Associate Professor at NYU's Stern School and Founder of LuxuryLab, a thinktank with a focus on luxury and new media.
“2009 represented a tipping point concerning the importance of digital competence in the luxury industry,” says Galloway. “While the industry grappled with double-digit revenue declines, traffic to luxury brand sites increased an average of 61 percent. With this study, we’ve devised a metric these companies can use to benchmark specific features of their digital competence against their competitors, and highlight which area each firm stands to gain the greatest return on incremental investment in digital.”
To savvy BoF readers who have been reading about Fashion 2.0 for more than two years now, some of these rankings may seem overly generous. Sure, Prada put out that amazing Trembled Blossoms film and Dolce & Gabbana might get some extra bonus points for putting Bryanboy, Tommy Ton, Garance Doré and Scott Schuman in the front row in Milan yesterday, but do these brands really have a 'gifted' internet competence? (Note: The Digital IQ ranking was completed long before last night's blogger frenzy in Milan!)
Even then, taken at face value, the ranking would still suggest that fashion brands, the heretofore undisputed masters of image creation and marketing sophistication, are failing to harness the real potential of social media, clumped together as they are towards the middle of the overall ranking.
There are only two fashion brands in the top ten, Louis Vuitton and Ralph Lauren, ranked #6 and #7, respectively. Before them, consumer electronics naturally makes a strong showing with Apple at #1 and Sony at #3, but should the top fashion brands really be satisfied in being judged less competent in internet communication than BMW at #2, Audi at #4 and Porsche at #5? These companies can't even sell their products online. Then again, many fashion brands, including Chanel (ranked 'average') and Marc Jacobs (ranked 'challenged') still don't sell their own products on their own websites, even though they clearly could.
Yesterday's Women's Wear Daily carried an excellent survey of the state of social media in fashion today and an in-depth look into the Digital IQ survey, calling 2009 "the year of social media" and outlining the online fashion stampede to setup i-Phone apps, social media sites and Facebook pages, amongst other things. But I couldn't help but thinking that part of the point is being lost in this social media frenzy. It's kind of like Fashion's Night Out. Everyone seems to be joining the party without really stopping to think about the what the overall opportunity offers.
First and foremost, social media is about listening to the conversations that consumers all over the internet are having about our brands. Indeed, in the social media age, our brands are increasingly defined by our consumers. Do you know what your consumers are saying about your brand? Regardless of whether you agree or not, you can be sure they will share it with hundreds of friends, contacts and strangers on Facebook, Twitter and YouTube, and hundreds of other sites that make the entire internet increasingly social.
Only once we have understood these two aspects of social media — listening and sharing — in addition to broadcasting, can we strategically engage in a dialogue to achieve our various business objectives to have the best products, the right customer service, the strongest brand image and plenty of profits. In short, social media is far more than a simple marketing tool. Indeed, it will continue to dramatically change the industry as we know it.
For those of you who are interested in continuing the conversation on social media, I invite you to attend the LuxuryLab Innovation Forum in New York on November 6th, for a one-day event to explore the rapidly changing luxury landscape. Amongst other things, the results of the Digital IQ index will be dissected in detail, and speakers including Tina Brown (Founder and Editor of the Daily Beast), Daniel Lalonde (CEO of Louis Vuitton North America) and Francois-Henri Bennahmias (President and CEO of Audemars Piguet North America) will share their ideas in high-velocity presentations modeled after the fabled TED conference.
BoF is pleased to be an official media partner of the event, and if all goes as planned, I will also have a chance to share my own thoughts with the expected audience of more than 300 luxury executives. You can register for the conference here.
Imran Amed is Founder and Editor of The Business of Fashion