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L2 Assigns Tiffany & Co. a Digital IQ of Genius

But All Other Brands Need Improvement
Oct 18, 2011 5:53 PM   By Jeff Miller
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RAPAPORT... Digital competence, as defined by L2 A Think Tank, is a point of differentiation for a brand that offers a website that is searchable, shareable and mobile-optimized and ties social media efforts in with the broader digital strategy. When these points fall into place, as it has for Tiffany & Co. in L2's first report on the jewelry and watch segment, the company assigns  a Digital IQ class of "Genius." Unfortunately, Tiffany  was the only jewelry brand that achieved that accolade, out of 35 measured, followed by Swarovski AG, which was assigned second-best "Gifted" for  experimenting and innovating across its website, mobile, and social platforms. (Read the full report at L2's website.)

An "Average" Digital IQ, defined as having a digital presence that is functional yet predictable, shows that efforts are often ''siloed across platforms and websites often offer limited transaction-orientation.'' L2 assigned an average IQ to Jaeger-LeCoultre, David Yurman, Cartier, Omega, Tag Heuer, Longines, Montblanc, Pandora, Bulgari, Hublot, and IWC.

The next level of digital competence, "Challenged" showed which brands had limited or inconsistent adoption of mobile and social media platforms and websites that  lack inspiration and utility. Brands that measured at this level included Audemars Piguet, Raymond Weil, Chopard, Mikimoto, De Beers, Baume et Mercier, Piaget, Movado, Breitling, Harry Winston, Van Cleef & Arpels and Vacheron Constantin.

The final category, or a Digital IQ of "Feeble," was assigned to Bulova, Baccarat, Rolex, Franck Muller, H.Stern, Officine Panerai, Buccellati, Graff, Faberge and Patek Philippe.

L2 authors wrote: ''In our first-ever watches and jewelry index, nearly two thirds of watches and jewelry brands are classified as challenged or feeble and only two brands registered IQs of genius or gifted, confirming the hypothesis that the category is one of the biggest luxury laggards online. In comparison, in the digitally sophisticated specialty retail and travel categories, both which ink considerable revenue through online channels, 42 percent and 41 percent of brands, respectively, were genius or gifted. Meanwhile the fashion and beauty categories register about one third of brands in the genius or gifted ranks. Although watches and jewelry brands are beginning to invest in social and mobile media, transaction-orientation and digital marketing competence lag other industries.''

L2 researchers praised Tiffany & Co. for threading the "needle between brand building and e-commerce" with its website, and for using its microsite "What makes love true" to bring its brand magic to life. L2 gave high marks for Tiffany's instagram account, the engagement ring finder app, email communications, and the website's seamless handoff to in-store consultants when an item couldn't be purchased online.

Authors noted that with only 29 percent of the brands in the jewelry index  e-commerce ready,  and Longines and Movado are the only pure play watchmakers that sell online, there is much room to grow.

''Concerns about pricing transparency, retail relationships, and inventory all provide significant challenges for brands in the online channel,'' authors noted. ''However, our data indicates e-commerce capability is the strongest predictor of digital competence across channels. When brands begin selling online, digital transitions from a marketing cost to a P&L. Brands with e-commerce capability register double the traffic growth, 85 percent higher Google search volume, and nearly triple the number of Facebook fans. They also demonstrate broader adoption of digital marketing tactics, such as search engine optimization and marketing and email communication.''

But even without ecommerce, L2 reminded brands that they can drive incremental revenue with  a stronger digital presence. More than half of luxury purchasers  research a product online before they visit a store. ''However, the majority of brands in the watches and jewelry category are doing little to facilitate this handoff. Although 80 percent link to third-party retail locations, less than half link to a store locator from the product page,'' the authors observed. 

TAG Heuer was the only brand that linked directly to online third party retailers. Only one third of the brands display the product price, and Tiffany is the only brand that offers in-store pick-up.

While the authors admit the jewelry segment is rife with counterfeit products, paid search represents one of the biggest missed opportunities. Less than half of the brands were purchasing their own brand keywords and failed to come up in the top three for paid ads, L2 found. So, this ''valuable search engine real estate'' is being seized by e-tailer, flash sites, and discounters such as eBay and Overstock.com.  Not addressing paid search results is a giant “for sale” sign in the world’s biggest retail window: Google.

Another missed opportunity was noted with social and mobile media adoption  since many brands do not link to their social and mobile properties from their brand sites, missing out on the ability to build communities and increase interaction. ''Although 70 percent of brands maintain a Twitter handle, only 46 percent link to their account from their sites and only 40 percent allow products to be shared via Twitter. There are more links to brands’ Facebook pages, however Facebook sharing functionality is limited and only one third of the brands incorporate the Facebook 'Share' or 'Recommend' API and just 14 percent include Facebook 'Like' functionality on the product page.''

L2 suggested that  linking to social media properties and incorporating product sharing features can provide tangible results, and the amount of traffic coming from and going to a brand site from social media properties significantly correlates with the group's Digital IQ.

L2 suggested that brands   get serious about establishing direct relationships with their consumers across the industry using YouTube, Twitter and  Facebook.  There is a direct correlation between the number of tweets a brand has sent, which can reflect frequency or be a proxy for legacy on the platform, and the number of followers. Brands are averaging less than one tweet per day, suggesting that there is significant opportunity to amplify efforts on the platform. On YouTube, high viewership of brand content is rare, and more than half of the top-viewed videos are on non-brand channels. Tiffany and David Yurman were the only brands that maintain an official account on  Foursquare and both average 20 times more check-ins at their retail locations than brands with no official presence on the platform.




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Tags: branding, digital, iq, Jeff Miller, Jewelry, l2 think
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