Ralph Lauren, Louis Vuitton and premium brand Coach have the luxury sector’s highest digital IQs, in part because of their keen attention to social media and mobile engagement, according to L2 Think Tank. L2's 2010 Digital IQ Index found that luxury brands are finally taking to new media en masse after years of ignoring or underperforming in the digital space. The top seven brands – Coach, Ralph Lauren, Louis Vuitton, Gucci, Hugo Boss, Burberry and Dolce & Gabbana – all attained “Genius” status for their digital efforts in the past year. “[Our key finding] was the escalating pace of digital innovation in the industry,” said Scott Galloway, founder of L2, New York. “It’s surprising that the pace has picked up so dramatically. “There has been more innovation online in the past 12 months than in the previous five years combined.” L2’s Digital IQ index calculates scores based on brands’ efforts across their Web sites, digital marketing, social media and mobile efforts. Forty percent of each score gauged the effectiveness of a luxury brand’s Web site, 30 percent judged its digital marketing efforts, 20 percent appraised social media output and 10 percent of the score was based on mobile performance.
The study called Cartier’s lack of digital engagement one of the biggest missed opportunities in the sector.
Likewise, L2 acknowledged Rolex’s compelling Web site, but bemoaned the brand’s lack of social media presence.
Mr. Galloway said that the watch and jewelry category suffered due to its hesitance to sell goods online because of counterfeiting concerns.
Digital disparity
The average digital IQ was 98 in this year's survey, up 3 points from 2009.
Fashion brands showed significant improvement, scoring an average digital IQ of 131 – up 24 points from last year.
Meanwhile, watch and jewelry brands struggled. The category's average score of 79 was 9 points lower than last year.
The standard deviation of the index – which measures the difference between all of the brands’ scores – increased from 29 to 39, indicating a large discrepancy between the efforts of intelligent digital marketers and laggards in the space.
The IQ disparity extends to LVMH, Gucci Group and Richemont, the three major luxury conglomerates.
LVMH had an average IQ of 118, while Gucci Group recorded a mean score of 109 and Richemont tailed behind with a low average of 84.
Only half of luxury brands launched email marketing campaigns, while only 40 percent engaged in search engine marketing and one in ten had mobile sites.
These growth areas represent simple measures that lower scoring brands can work on to improve in next year’s list.
How to rebound
Brands who fared poorly in this year’s ranking can also rebound easily by focusing on engaging consumers via social media and mobile platforms.
In fact, social media played a big role in digital success for luxury brands this year. Traffic to high-end brands Web sites from Facebook increased from 3.4 percent to 7.1 percent.
“The two words everyone is saying are Facebook and mobile,” Mr. Galloway said. “The brands that are employing social sharing have enjoyed much greater traffic growth.
“Looking forward, the number of people doing standard, integrated mobile device shopping means it is clearly going to be a big part of the luxury market going forward,” he said.
Final Take
Peter Finocchiaro is editorial assistant at Luxury Daily, New York