American Marketer


Nordstrom pegged as smartest luxury retailer: L2 Think Tank

September 7, 2012


Department store chain Nordstrom has been lauded as the top-performing luxury digital retailer due to its seamless customer service, social media prowess, comprehensive mobile strategy and efficient commerce channels, according to L2 Think Tank.

Nordstrom was only beat out by No. 1 retailer Macy’s. Other luxury retailers who cracked the top 10 include Bloomingdale’s and Saks Fifth Avenue.

“While the Internet is often touted as a force that levels the playing field, we found that size does matter,” said Ari Wolfe, research lead at L2 Think Tank, New York.

“Big-box department store retailers dominated the rankings this year because they have both sufficient resources to invest broadly across each of the distinct dimensions L2 examined and an experienced operational team to follow through and deliver superior customer service via digital channels,” he said.

The study judged retailers 40 percent on Web site, 10 percent on social media, 20 percent on mobile and 30 percent on digital marketing. Based on their scores, retailers were given genius, gifted, average challenged and feeble listings.

Digital dynamite
A big part of Nordstrom's success was that it transitioned its touted customer service into its social media and Web site.

“Nordstrom is building on its great reputation for traditional customer service across new digital channels,” Mr. Wolfe said. “It was the leader in social media scores with its strong Facebook community and also used Twitter effectively to answer customer service inquiries."

Nordstrom’s ecommerce site is designed for an efficient shopping experience. This efficiency carries over to its mobile commerce site and application (see story).

Nordstrom's ecommerce site

“[Nordstrom] is also constantly experimenting with new technologies and platforms like Pinterest and in-store mobile checkout,” Mr. Wolfe said.

Meanwhile, Bloomingdale’s at No. 7 was lauded for its comprehensive mobile strategy including its mobile commerce site and multi-platform apps.

The retailer also uses a plethora of QR codes and interactive window displays to encourage interaction.

QR codes in print ads

Also, No. 10-ranked Saks’ use of product videos on its site “continues to set a visual merchandising standard,” according to the study.

Furthermore, the “Caption Our Heart” contest encouraged consumers to interact with the retailer’s shoe Tumblr page (see story).

Caption Our Heart contest

“The most surprising finding is that brands are almost universally underestimating the importance and value of optimizing their brand on YouTube,” Mr. Wolfe said. “As the second-most-popular search engine in the world, consumers are using this medium to discover products, research alternatives and show off ultimate purchases,” he said.

Despite this incentive, brands own just 24.5 percent of first-page search results, as compared to almost 40 percent of first-page real estate on Google, according to Mr. Wolfe.

Furthermore, on average, only 29 percent of brand channel videos link to ecommerce pathways -- clearly, a missed opportunity, he said (see story).

Help wanted
There are some retailers that may need to bolster their digital status.

For example, No. 74-ranked Stuart Weitzman was pointed out for limited innovation, which prevents the brand from living up to its offline image, according to L2.

Also, the study pointed out that Tourneau’s new ecommerce site was the only aspect that lifted the retailer from the “feeble” ranks.

However, a digital experience is very necessary for luxury retailers.

"We found a strong correlation between a brand's digital IQ and its online sales,” Mr. Wolfe said.

With bricks-and-mortar retail exhibiting flat growth and ecommerce growing between 13 percent-17 percent year over year, it is more clear than ever that the future of retail is online.

While there is no one component that retailers are universally missing, the lack of consistent, balanced investment held many brands back, the study stated.

“To reach genius, a brand must demonstrate consistent, superior, cross-dimensional digital savvy in order to differentiate itself from the average brand in its peer group,” Mr. Wolfe said.

“Do not ignore the basics - simple things like a well-designed ecommerce site coupled with a mobile-optimized Web site can provide an important point of differentiation in this sector,” he said. “While it is not glamorous, direct marketing in the form of email remains one of the most effective tools to generate increased sales in retail.

“Lastly, while social media may not be a major source of direct revenue, its growing impact on marketing and customer service cannot be ignored.”

Final Take

Rachel Lamb, associate reporter on Luxury Daily, New York