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SPECIALTY RETAIL 2015NYC BREAKFAST | OCTOBER 6, 2015
2
L2 is a member-based business
intelligence firm that benchmarks
digital performance.
3
Where are you today? What you need to do to get better? How to hold
teams/vendors accountable?
BUSINESS INTELLIGENCE FOR DIGITAL
RESEARCH BENCHMARKING EDUCATION
4
UPCOMING RESEARCH
SOCIAL PLATFORMSIntelligence Report:
BEAUTYDigital IQ Index®:
BIG BOXDigital IQ Index®:
FASHIONDigital IQ Index®:
MOBILE
Intelligence Report:
5
UPCOMING EVENTS
BREAKFAST
FASHIONNew York
November 12th
BREAKFAST
BEAUTYNew York
December 8th
BREAKFAST
SOCIAL PLATFORMSNew York
October 22nd
6
C L I N I C / T I S H M A N A U D I T O R I U M , T H E N E W S C H O O L , N Y C
N O V E M B E R 3 , 2 0 1 5 / 8 : 3 0 A M – 1 2 : 3 0 P M
7
STRATEGY MODULES
Social Content
& Strategy
Video Localization
The Digital
Organization
Omnichannel
Retail
Data & Targeting
Modules blend deep category insights with brand specific data to
identify opportunities
INTRODUCTION
SPECIALTY RETAIL 2015
9
United States, 2009-2019E
Apparel & Footwear Specialist Retailers: Value Sales vs. Selling Space
CRUSHED
60.0
62.0
64.0
66.0
68.0
70.0
72.0
74.0
76.0
78.0
80.0
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
2009 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E
Se
llin
g S
pa
ce
(in
m2
mill
ion
s)
Va
lue
Sa
les
(in
US
D b
illio
ns)
Value Sales Selling Space
Future growth is projected to dip to +0.8% CAGR as retail closures continue to constrain physical selling space, which has remained flat for the last three years.
Source: Euromonitor International, June 2015.
+4.1% CAGR +0.8% CAGR
10
Multiple brands from 2014 Index are exiting category…
PIVOT
11
2004-2014, n=295 retail locations
Tiffany & Co: Store Opening by Region
STATIC STORE FOOTPRINT (AT HOME)
0
50
100
150
200
250
300
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Other Europe Asia-Pacific Japan USA
83 percent of new retail locations launched since 2011 were opened abroad.
Source: Annual Report (10-K), March 20, 2015.
12
n=17 publicly traded organizations with complete data broken down by region
United States, FY 2013 - FY 2014 (unweighted average)
Retailers: Sales Growth by Channel vs. Brick & Mortar Investment
POST-EXPANSIONIST PLANNING
+2.3%
+6.3%
+26.2%
Retail Footprint ($)
U.S. Retail Sales ($)
U.S. Web Sales($)
Year-over-year growth of direct web sales continue to outpace net revenues in North America by 4x and absolute change in retail footprint by 11x.
Source: Annual Reports (10-K) & Internet Retailer.
(#)
13
69%
48%
62%58% 60%
55%
89%
38%
16%
Buy Online, Return In-Store Check In-Store Stock Status Buy Online, Pickup In-Store
Department Stores(n=58)
Big Box(n=62)
Specialty Retail(n=73)
Percentage of Bands with Given Feature in Q3 2015
Cross-Sector: Omnichannel Investments by Retail Vertical
CATEGORY LAGGING PEERS
Source: L2 Inc.
14
Pure Play E-Tailers vs. Omnichannel Retailers
Retail: Value Chain of Online Sales by Sales Model
OMNICHANNEL EQUATION
Source: ICSC, October 2014.
15
United States, Q1 2015 – Q2 2015
Share of E-Commerce Orders by Acquisition Channel (All Industries)
BORING = SEXY
Source: Custora, Q2 2015.
23%
21%
17% 17%16%
5%
1% 1%
OrganicSearch
Direct Paid Search Affiliate E-mail Other Social Display
16
January 2015
Client-Side Marketers, Worldwide
Primary Area of Focus for Improving Customer Experience
PERSONALIZATION TOP OF MIND
4%
5%
7%
10%
12%
29%
33%
Mobile-friendly
Expedited process
Fun and fulfilling experience
Security and reliability
Consistency across channels
Consumer value
Personalization and relevance
Source: Econsultancy, January 2015.
17
February 2015
Availability & Usability of Data for Personalization
A THIRD, A THIRD, A THIRD
35%
33%
32%
Source: FitForCommerce, “Let’s Get Personal: Omnichannel Personalization in a Hyper-Connected World,” February 2015
We have data, it’s not usable, and we don’t know how to use it
We don’t have enough data
We have data, it’s usable and we know
how to use it
18
Success of Fast Fashion is more than just merchandising
EARLY WINNERS: FAST FASHION
19
IF YOU CAN’T BEAT ‘EM…
Reserve Items In-
Store Only via App
Personalized “My
AEO” Offers Inbox
AERewards Card
Links to Passbook
Push Notifications
for Timely Offers
Halfway through 2015, American Eagle returned to positive sales growth (+11%), benefiting from expanded fashion variety and decreased inventory turnover driven by personalized offers and increasing omnichannel capabiltiy.
METHODOLOGY
SPECIALTY RETAIL 2015
21
METHODOLOGY
*Methodology for highlighted components has been added/changed since last year
35%
DIMENSION:
SITE &
E-COMMERCE
TECHNOLOGY & INTERACTIVITY: Load Time, Analytics, Branded Content, Guided Selling
SEARCH & NAVIGATION: Product Filtering/Sorting, Keyword Search
CUSTOMER SERVICE AND STORE LOCATOR: FAQ, Contact Us, Live Chat, Store Locator, Map Directions
OMNICHANNEL: Click & Collect, Reserve & Collect, In-Store Returns, In-Store Events/Services, Preferred Store
PRODUCT PAGES: User Reviews, Cross-Selling, Real Time Inventory, Content Integration
E-COMMERCE: Direct Checkout, Cart Cross-Selling, Gifting
SHIPPING: Free Shipping, Shipping Restriction, Return Shipping
ACCOUNT & LOYALTY: Wishlist, Favorites, Registry, Tiered Program, Credit Card Integration
22
DIMENSION:
DIGITAL
MARKETING
35%
METHODOLOGY
*Methodology for highlighted components has been added/changed since last year
BRAND SEARCH: Traffic & Web Authority, SEO/SEM
CATEGORY SEARCH: Visibility Across 300+ keywords
grouped into categories
WEB ADVERTISING: Display, Retargeting, and Cross-
Platform Initiatives (Data by Pathmatics)
EARNED MEDIA: Reddit and Blog Mentions, Selective
Presence on Industry-Specific Content
EMAIL MARKETING: Ease of Signup, Signup Incentive,
Frequency, Content, Promotions, Triggered Emails,
Smartphone Optimization, Personalization, Localization
23
*Methodology for highlighted components has been added/changed since last year
DIMENSION:
SOCIAL
MEDIA
10%
METHODOLOGY
FACEBOOK: Reach, Engagement, Responsiveness,
Programming Diversity, Support of Native Video Format, Call-
to-Action
YOUTUBE: Search Visibility, Channel Experience, Reach,
Performance & Optimization of Most Viewed Content,
Competitive Advertising
INSTAGRAM: Reach, Engagement, Post Frequency, Video
Content, E-Commerce Initiatives
TWITTER: Reach, Engagement, Tweet Frequency,
Programming Tactics, Customer Service
PINTEREST, GOOGLE PLUS, TUMBLR, MEERKAT,
PERISCOPE: Presence, Reach, Engagement
24
*Methodology for highlighted components has been added/changed since last year
DIMENSION:
MOBILE
20%
METHODOLOGY
SMARTPHONE EXPERIENCE: Compatibility,
Functionality, Store Locator, Mobile Feature Set, Mobile
Checkout
TABLET EXPERIENCE: Responsiveness, UI/UX
Optimization for Touch Input, Cart & Maps Performance,
Geolocation
MOBILE ADVERTISING: Impressions, Creative, Mobile and
Tablet Platforms
MOBILE SEARCH: “Above-the-Fold” Visibility via
Organic or Paid Results on Google; Site Identified as Mobile-
Friendly, Click-to-Call or Local Directions, Deep Linking
Content and Structure
MOBILE APPS (if applicable): Presence, App Store
Performance, and Functionality of iOS & Android
Offering, E-Commerce Capabilities, In-Store Mobile
Integration
25
Brands parsed into five categories based on Digital IQ score
CATEGORIZING RESULTS
GENIUS 140+ AVERAGE 90–109
CHALLENGED 70-89 FEEBLE <70
GIFTED 110–139
RANKING
SPECIALTY RETAIL 2015
27
RANK BRAND DIGITAL IQ
62Compagnie Financière
Richemont SA
87
63
Ralph Lauren Corporation
86
63
Tumi Holdings, Inc.
86
65
Brentwood Associates
85
65
Kenneth Cole Productions, Inc.
85
65
Swatch Group
85
L2 DIGITAL IQ INDEX®:RANK BRAND DIGITAL
IQ
68
L Brands
84
69
Tourneau
81
70
Desigual S.L.
75
71
Restoration Hardware Holdings Inc
69
72
French Connection Group, PLC
65
73
Baccarat SA
44
FEEBLECHALLENGED
28
AVERAGEL2 DIGITAL IQ INDEX®:RANK BRAND DIGITAL IQ
49
Kate Spade & Co.
99
49
Oxford Industries, Inc.
99
52
The Aldo Group
98
53
Aeropostale, Inc.
97
53
Daniel Swarovski Corporation
97
53
PVH Corp.
97
RANK BRAND DIGITAL
IQ
56
J. Crew Group, Inc.
94
57
Duluth Trading Co.
93
58
Arcadia Group
92
59
L’Oreal Group
91
60
Ethan Allen Global, Inc.
90
60
Joe Fresh
90
CHALLENGED
29
L2 DIGITAL IQ INDEX®:RANK BRAND DIGITAL IQ
38
Ann Inc.
103
38
Gap Inc.
102
38
Hugo Boss AG
102
38
Michael Kors Holdings Ltd
102
38
Pandora A/S
102
38
Inditex
102
RANK BRAND DIGITAL
IQ
44
Alex and Ani
100
44
Lululemon Athletica Inc.
100
44
Lush
100
44
Investcorp
100
49
Chico's FAS, Inc.
99
49
Chico's FAS, Inc.
99
AVERAGE
30
L2 DIGITAL IQ INDEX®:RANK BRAND DIGITAL IQ
25
Fast Retailing Co., Limited
108
27
Abercrombie & Fitch Co.
107
27
Brooks Brothers
107
27
Abercrombie & Fitch Co.
107
27
Lands' End Inc.
107
31
Apax Partners
106
RANK BRAND DIGITAL
IQ
31
Ann Inc.
106
33
Signet Jewelers
104
33
The Jones Group, Inc.
104
33
Tory Burch LLC.
104
33
Williams-Sonoma, Inc.
104
33
Pier 1 Imports Inc
103
AVERAGE
31
L2 DIGITAL IQ INDEX®:RANK BRAND DIGITAL IQ
14
Urban Outfitters, Inc.
117
15
Otto GmbH
116
16
Coach, Inc.
115
16
Steve Madden, Ltd.
115
18
Williams-Sonoma, Inc.
113
18
Express, Inc.
113
RANK BRAND DIGITAL
IQ
20
L Brands
112
20
Urban Outfitters, Inc.
112
22
Ralph Lauren Corporation
111
23
Gap Inc.
110
24
Urban Outfitters, Inc.
109
25
Fossil Group, Inc.
108
GIFTED AVERAGE
32
RANK BRAND DIGITAL
IQ
6
Ulta Salon, Cosmectics & Fragrance, Inc.
122
9
Tiffany & Co.
120
10
J. Crew Group, Inc.
119
10
Signet Jewelers
119
12
Forever 21, Inc
118
12
Williams-Sonoma, Inc.
118
L2 DIGITAL IQ INDEX®:RANK BRAND DIGITAL IQ
2
L Brands
135
3
IKEA Group
129
4
Gap Inc.
127
5
American Eagle Outfitters
125
6
Gap Inc.
122
6
H&M Hennessy & Mauritz
122
GIFTED
33
RANK BRAND DIGITAL IQ
1 LVMH 141
L2 DIGITAL IQ INDEX®:
1 Instagram account incorporates e-commerce, contests, and influencers
2 Comprehensive product pages include find in-store, videos, and UGC
3 Sephora Flash provides expanded fulfillment options through subscription
IN THE COMPANY OF GENIUS
21
3
34
1%
40%
44%
12%
2%
Genius Gifted Average Challenged Feeble
Genius Gifted Average Challenged Feeble
Percentage of Brands Per Digital IQ Class, n=82
Specialty Retail 2014: Digital IQ Distribution
2014
35
1%
30%
52%
12%
4%
Genius Gifted Average Challenged Feeble
Genius Gifted Average Challenged Feeble
Percentage of Brands Per Digital IQ Class, n=73
Specialty Retail 2015: Digital IQ Distribution
2015
36
2014-2015 Digital IQ Percentile Rank
Specialty Retail: Biggest Winners & Losers
BIGGEST MOVERS
54% 41%
-40%
40%
-31%
Average Gifted Average Gifted Average Average Average Gifted Average Average
Gifted Average Gifted Average Gifted Average Gifted Average Gifted Average
39% 38%
-40% -38% -38%
KEY FINDINGS
SPECIALTY RETAIL 2015
38
15%
0%
77%
23%
13%
4%
88%
31%
17%
6%
90%
40%
Buy Online, Pickup In-Store Reserve Online, Pickup In-Store Buy Online, Return In-Store Check In-Store Availbility
2013 2014 2015
Percentage of Brands with Given Feature
2013-2015, n=52 Brands Present Across Studies
Specialty Retail: Omnichannel Investments Across Time
OMNICHANNEL STANDSTILL
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
39
38%
34%
15%
12%
DisplayLocation Type
or ProductLines
List In-StoreServices or
Events
BookAppointment
Service
SelectPreferred Store
Percentage of Brands Providing Information on Brand Site
September 2015, n=73
Specialty Retail: Retail Location Information
BRICKS: MORE THAN JUST POS
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
42
100%
0%
63%
38%
63%
83%
5%
58%
20%
38%
60%
0%
40%
20% 20%
33%
0%
33%
0% 0%
82%
0%
27%
55%
27%
Free Shipping Product Restricted FreeShipping
Order Minimum FreeShipping
Always Free Shipping Free Return Shipping
Accessories & Shoesn = 8
Appareln = 40
Beauty & Skincaren = 5
Home & Giftn = 9
Watches & Jewelryn = 11
Percentage of Brands with Given Feature
July 2015
Specialty Retail: Shipping Offers Across Index Categories
SHIPPING OFFERS
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
43
FULFILLMENT: HOME & GIFT
Free Shipping
(Any)
Buy Online, Pick-
up In-Store
Check Inventory
Online
Other Detailed
Services
Crate & Barrel 8 4 4Warehouse Pick-up,
Courier Service
Ethan Allen 8 8 8“Premier Home
Delivery”
Pier 1 4 4 4“White Glove
Service”
Pottery Barn 8 8 8Select “White Glove
Delivery”
Restoration Hardware 8 8 8Select “Unlimited
Furniture Delivery”
West Elm 8 8 8Select “In-Home
Delivery”
Williams Sonoma 4 8 8Select “White Glove
Delivery”
IKEA 8 8 4Store Delivery,
Picking with Delivery
Sur la Table 4 8 8 -
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
44
68%63%
40%
27%
73%
55%
8%
Blog,Lifestyle Content
Videos User-GeneratedContent
ProductCustomization
"Shop theLook"
Digital Catalog,Lookbook
Diagnostic,Quiz
Percentage of Brands with Given Feature
July 2015, n=73
Specialty Retail: Brand Site Investments
CONTENT AND COMMERCE
66% link branded content to specificproduct pages
53% include shoppable guided selling tools
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
45
68% 67%
38%
32%
15%10%
User Ratings User Reviews Customer ServiceAvailbility
Real Time OnlineInventory
User GeneratedContent
Product Q&A
Percentage of Brands Implementing Features on Product Pages
July 2015, n=73
Specialty Retail: Features on Product Detail Pages
PRODUCT PAGES
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
47
August 2015, n=80 Top Generic Queries by Category
Specialty Retail: Search Visibility Across General Terms on Google
SEO/SEM
Accessories
& Shoes
(n=8)
Apparel
(n=40)
Beauty &
Skincare
(n=5)
Home & Gift
(n=9)
Watches &
Jewelry
(n=11)
Organic
Index Brands
Among Top-10
Destinations10% 40% 30% 30% 40%
Top Brand
Paid
Index Brands
Among Top-10
Destinations0% 30% 10% 20% 40%
Top Brand
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
48
August 2015, n=80 Generic Apparel Queries (e.g., “pants”) on Google.com
Top 10 Sites Appearing on First Page of Organic and Paid Search Results
Apparel: Search Visibility Across General Terms on Google
APPAREL: SEO/SEM
20%
21%
23%
25%
29%
33%
33%
38%
50%
70%
boohoo.com
hm.com
kohls.com
us.asos.com
oldnavy.com
jcpenney.com
express.com
forever21.com
macys.com
shop.nordstrom.com
Specialty Retailer Department Store E-Tailer
ORGANIC PAID
Other
9%
9%
9%
10%
10%
10%
10%
18%
29%
30%
chicos.com
amazon.com
ae.com
target.com
llbean.com
hm.com
bohoo.com
zappos.com
jcpenney.com
macys.com
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
49
August 2015, n=80 Beauty & Skincare Queries (e.g., “serum”) on Google.com
Top 10 Sites Appearing on First Page of Organic and Paid Search Results
Beauty & Skincare: Search Visibility Across General Terms on Google
BEAUTY & SKINCARE: SEO/SEM
15%
16%
16%
18%
24%
29%
33%
53%
68%
91%
lushusa.com
maccosmetics.com
maybelline.com
allure.com
totalbeauty.com
walgreens.com
eyeslipsface.com
amazon.com
ulta.com
sephora.com
8%
9%
9%
10%
13%
13%
21%
28%
29%
31%
100percentpure.com
sephora.com
garnierusa.com
lancome-usa.com
rimmellondon.com
amazon.com
olay.com
lorealparisusa.com
maybelline.com
covergirl.com
Specialty Retailer Beauty Brand E-Tailer
ORGANIC PAID
Other
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
50
August 2015, n=80 Generic Home & Gift Queries (e.g., “outdoor furniture”) on Google.com
Top 10 Sites Appearing on First Page of Organic and Paid Search Results
Home & Gift: Search Visibility Across General Terms on Google
HOME & GIFT: SEO/SEM
28%
29%
30%
38%
39%
41%
41%
48%
54%
56%
crateandbarrel.com
williams-sonoma.com
macys.com
ikea.com
walmart.com
overstock.com
target.com
bedbathandbeyond.com
wayfair.com
amazon.com
10%
10%
13%
14%
15%
16%
19%
23%
24%
36%
potterybarn.com
ewfurniture.com
wayfair.com
target.com
macys.com
raymourflanigan.com
crateandbarrel.com
overstock.com
amazon.com
jcpenney.com
Specialty Retailer Big Box E-Tailer
ORGANIC PAID
Other
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
51
August 2015, n=80 Shoes & Accessories (e.g., “boots”) on Google.com
Top 10 Sites Appearing on First Page of Organic and Paid Search Results
Shoes & Accessories: Search Visibility Across General Terms on Google
SHOES & ACCESSORIES: SEO/SEM
18%
21%
23%
28%
29%
36%
45%
50%
53%
65%
kohls.com
target.com
overstock.com
ebags.com
aldoshoes.com
dsw.com
amazon.com
zappos.com
macys.com
shop.nordstrom.com
9%
11%
11%
13%
13%
14%
21%
24%
26%
55%
walmart.com
sears.com
jcpenney.com
target.com
llbean.com
nordstromrack.com
6pm.com
macys.com
amazon.com
zappos.com
Specialty Retailer Department Store E-Tailer
ORGANIC PAID
Other
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
52
August 2015, n=80 Generic Watches & Jewelry(e.g., “bracelet”) on Google.com
Top 10 Sites Appearing on First Page of Organic and Paid Search Results
Watches & Jewelry: Search Visibility Across General Terms on Google
WATCHES & JEWELRY: SEO/SEM
23%
25%
33%
34%
34%
35%
36%
44%
50%
70%
pandora.net
bluenile.com
etsy.com
kay.com
zales.com
amazon.com
us.nordstrom.com
tiffany.com
macys.com
overstock.com
Specialty Retailer Department Store E-Tailer
ORGANIC PAID
Other
10%
10%
10%
10%
11%
11%
14%
14%
26%
38%
overstock.com
kay.com
bluenile.com
alexandani.com
fossil.com
amazon.com
tiffany.com
jcpenney.com
tjx.com
macys.com
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
53
July – August 2015, n=73 Brands with Newsletter and Account Signup
Specialty Retail: Newsletter and Account Signup Process
NEWSLETTER AND ACCOUNT
89%
65%
38% 38%
WelcomeEmail
Pop Up Incentivized Expedited
77%
28%
14%8%
4%
WelcomeEmail
Expedited SocialMedia
Confirmation Incentivized
Newsletter Signup Account Signup
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
54
July – September, 2015, n=73 Brands with Newsletter and Account Signup
Specialty Retail: Trigger Emails
TRIGGER EMAILS & INCENTIVES
42% of Brands sent abandoned cart emails
29% of Brands that sent abandoned cart offered incentive through free shipping
15% of Brands sent birthday emails
100% of Brands that sent birthday emails offered either a gift or incentive
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
55
June – September 2015, n=652 Email Campaigns
Victoria’s Secret: Average Read Rate by Email Category
BEST IN CLASS
36%
23%
11%8%
6%
3% 2% 1% 0.3%0%
20%
40%
60%
0%
10%
20%
30%
40%
Promotion Product Sale Free Gift LoyaltyProgram
Localized AbandonedCart
Birthday UGC
Rea
d R
ate
Pe
rce
nt
of
Em
ail
Ca
mp
aig
ns
Customized Content
Source: eDataSource
56
Personalized and Localized E-Mail Content
EMAIL CUSTOMIZATION
15% Personalized Subject Lines
12% Based on Browsing
History
4% Referenced Local
Event
10% Referenced Local
Store
Ω
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
57
September 2015, n=70 Brands with Data
Specialty Retail: Average Impressions per Creative by Category
WEB ADVERTISING
Topshop
650K915K
1.4M
688K984K
-2,000,000
-1,000,000
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
Accessories &Shoes (n=8)
Apparel(n=38)
Beauty & Skincare(n=4)
Home & Gift(n=9)
Watches & Jewelry(n=11)
Ave
rag
e I
mp
res
sio
ns
Pe
r U
niq
ue
Cre
ati
ve
Cole Haan
Allen Edmonds
Old Navy
Bath & Body Works
The Body Shop
IKEA
Ethan Allen
Tiffany & Co.
Baccarat
Gap
Duluth Trading Co.
Sephora
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
58
WEB ADVERTISING: DESKTOP
Specialty Retail: Unique Brand Ads vs. Relative Impressions
0%
25%
50%
75%
0 400 800 1,200
Re
lati
ve
Im
pre
ss
ion
s
Number of Unique Brand Ads
Accessories & Shoes Apparel Beauty & Skincare Home & Gift Watches & Jewelry
Coach
Ikea
Sephora
Cole Haan
Victoria’s Secret
Old Navy
Pottery Barn
Zales
Tiffany & Co.
September 2014 - September 2015, n=70 Brands Serving Ads
Source: Pathmatics
Gap
59
WEB ADVERTISING: MOBILE
Specialty Retail: Unique Brand Ads vs. Relative Impressions
0%
25%
50%
75%
0 300 600
Re
lati
ve
Im
pre
ss
ion
s
Number of Unique Brand Ads
Accessories & Shoes Apparel Beauty & Skincare Home & Gift Watches & Jewelry
Coach
Ikea
Bath & Body
Works
SephoraCole Haan
Victoria’s Secret
Old Navy
September 2014 - September 2015, n=70 Brands Serving Ads
Gap
Zales
Pandora
Source: Pathmatics
60
DESKTOP VS. MOBILE
Specialty Retail: Unique Brand Ads vs. Relative Impressions
September 2014 - September 2015, n=70 Brands Serving Ads
36%
58%
64%
42%
Desktop Mobile
Direct Indirect
56% 55%
44% 45%
Desktop Mobile
42%
27%
58%
73%
Desktop Mobile
51% 54%
49% 45%
Desktop Mobile
75%
61%
25%
39%
Desktop Mobile
Accessories & Shoes
ApparelBeauty & Skincare
Home & GiftWatches &
Jewelry
Source: Pathmatics
61
Platform Active Brands (30 day threshold)
Average ReachMedian Annual
Growth
Average Post
Frequency
(per week)
Average
Interactions
(per post)
99% 3,454,224 +12% 9.75 2,205
97% 1,352,537 +132% 10.92 24,331
97% 329,412 +33% 108.22 61.72
84% 9,802,141* +46% 1.05 -
July 2014-15, n=73
Comparative Metrics by Social Platform
SOCIAL MEDIA LANDSCAPE
*YouTube: Average Total Views Up / Down >10%YoYSource: L2 Digital IQ: Specialty Retail 2015
62
Free People
Williams-Sonoma
Hollister
Abercrombie & Fitch
Forever 21
Victoria's Secret
Aeropostale
Sephora
Michael Kors
Tiffany & Co.
Zara
M
2M
4M
6M
8M
10M
12M
14M
16M
18M
- 5.00 10.00 15.00 20.00 25.00 30.00 35.00
Cu
mu
lati
ve P
ost
Inte
racti
on
s
Posts per Week
July 2014 - 2015, n=70 active accounts Reach
Specialty Retail: Reach, Post Frequency, & Engagement
INDEX AVERAGE
Reach 3,454,224
Post Frequency 9.75
Total Interactions 1,563,343
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
63
Aeropostale13%
87%
Overall Index Leader
July 2014-2015
Category Leaders: Share of Voice by Total Interactions
FACEBOOK: LEADERS
Sephora 47%
53%
Beauty & Skincare
IKEA72%
28%
Home & Gift
Pandora36%
64%
Watches & Jewelry
Nine West29%
71%
Accessories & Shoes
Leader Others
Aeropostale20%
80%
Apparel
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
64
September 2015, n=70 active accounts
Specialty Retail: Adoption of Call to Action (CTA) Button on Facebook
FACEBOOK: CTA BUTTONS
Only 10% of
brands are using
CTA buttons to
drive to featured
products or
destinations other
than their main
brand site.
69%
3% 1% 1%
Shop Now Join Now Watch Now Contact Us
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
65
Abercrombie & Fitch
Urban Outfitters
Hollister
Aeropostale
American Eagle
Free People
Express
Victoria's Secret
Alex and Ani
H&M
Forever 21
ZaraBaccarat
ZalesM
50M
100M
150M
200M
250M
300M
0 5 10 15 20 25 30 35
Cu
mu
lati
ve P
ost
Inte
racti
on
s
Posts per Week
July 2014- 2015, n=71 active accounts Reach
Specialty Retail: Reach, Post Frequency, & Engagement
INDEX AVERAGE
Reach 1,352,537
Post Frequency 10.92
Total Interactions 5,477,792
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
66
July 2014-2015
Instagram: Top 5 Posts by Absolute Engagement
BEST IN CLASS
38K 38K 38K 39K 42K 53K 62K 73K 83K 86K 87K 96K 98K
Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15
Average Likes per Post
#15/26/15
479.8K likes4,227 comments
#26/29/15
473.1K likes821 comments
#36/12/15
456.4K likes3,495 comments
#46/4/15
440.9K likes9,096 comments
#56/30/15
443.4K likes5,095 comments
Event General Happy Birthday, Angel! VS Swim VS Sport
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
67
July 2014-2015
Instagram: Top 10 Brands by Relative Engagement
BEST IN CLASS
@lillypulitzer3.3%
@aeropostale1.9%
@vspink1.8%
@lushcosmetics1.7%
@bathandbodyworks
1.6%
@zalesjewelers1.3%
@urbanoutfitters1.3%
@brooksbrothers1.4%
@hollisterco1.5%
Watches & Jewelry Beauty & SkincareApparel
@baccarat_legendary
1.3%
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
68
July 2015
Instagram: Forever 21 Thread Screen
MISSED OPPORTUNITY
Source: f21threadscreen.com, Compete, YouTube
The F21 Thread Screen is a 2,000-lb
machine that uses 6,400 mechanical
spools of thread to display Instagrams that
are hashtagged with #F21ThreadScreen.
It streamed live online 24 hours a day from
July 22-28th.
69
Alex and AniMadewellLush
Fossil
Lululemon Athletica
Victoria's Secret
White House Black Market
Aeropostale
Hollister
.M
.5M
1.M
1.5M
2.M
2.5M
3.M
3.5M
0 50 100 150 200
Cu
mu
lati
ve P
ost
Inte
racti
on
s
Posts per Day
Reach, Post Frequency, & Engagement
INDEX AVERAGE
Reach 329,412
Post Frequency 15.46
Total Interactions 179,529
July 2014- 2015, n=71 active brands Reach
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
70
0.07%
0.11%
0.05%
0.01%
Interaction Rate
July 2014-2015
Best in Class: @Aeropostale
TWITTER: BEST IN CLASS
32% of @aeropostale’s top 100 tweets (byoverall interaction) feature at least one of theseVine stars.
@Aeropostale
Index Average
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
71
Accessories & Shoes
Apparel
Beauty & Skincare
Home & Gift
Watches & Jewelry
September 2015
Periscope: Broadcasters by Category
PERISCOPE
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
72
March-June, 2015
Periscope: @alexandani
BEST IN CLASS
July 1
April 10
May
21 BROADCASTS
March 26 Periscope Launches
June16
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
73
March-June, 2015
Content Analysis: @alexandani
PERISCOPE CONTENT
Behind the scenes
48%
Live Music 14%
In Store Event14%
Community Activity
24%
10 of 21 broadcasts included behind the scenes content from Alex and Ani’s “Ruler of the Woods” photo and video shoot
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
74
Brooks BrothersPandora
Pottery Barn
The Body Shop
Tommy Hilfiger
Ulta
Sur La Table
Victoria's Secret
Sephora
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0 2 4 6 8 10 12 14
Perc
en
t o
f C
han
nel V
iew
s
fro
m T
op
Vie
wed
Vid
eo
Uploads per Week
July 2014-2015, n=61 active brands
Specialty Retail: Total Views, Upload Frequency, & Top Video Reach
YOUTUBE
INDEX AVERAGE
Total Views 11,494,312
Post Frequency 1.22
Most Viewed/Total Views 27.34%
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
75
Cartier
Victoria’s Secret
Old Navy
Pandora
H&M
Sephora
Aeropostale
American Eagle
IKEA
Fossil
Free People
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
M 10M 20M 30M 40M 50M 60M
Pe
rce
nt
of
Org
an
ic V
iew
s
Incremental Video Views
September 2014 – September 2015, n=73 Brands with YouTube Channels
Specialty Retail: Paid vs. Organic Views on Brand YouTube Channels
CHANNEL PERFORMANCE
INDEX AVERAGE
Organic Views 49%
Channel Views 4.4M
Source: Strike Social.
76
July 2014-2015
Content Analysis: Category Leaders by Total Views
YOUTUBE VIDEO TYPES
30%
5%
21%
40%
20%
10%
65%
5%
26%
5%
15%
5%
35%
95%
47%
15%
55%
5%
Nine Westn=10
6,782,188
Victoria's Secretn=20
137,221,376
Sephoran=20
41,435,354
Williams-Sonoman=20
18,336,237
Cartiern=19
85,499,430
Storytelling Social Interest Recruiting General Promotion Haul Holiday Product Event How To
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
77
July 2014-2015
Paid vs. Organic: Category Leaders by Total Views
YOUTUBE TRAFFIC
22%13%
37%
96%100%
78%88%
63%
4%
Nine Westn=10
6,782,188
Victoria's Secretn=20
137,221,376
Sephoran=20
41,435,354
Williams-Sonoman=20
18,336,237
Cartiern=19
85,499,430
Paid Organic
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
78
July 2014-2015
Top 10 Videos: Total Video Views
YOUTUBE
CartierShape Your Time
24,840,9809/28/14
AeropostaleAero Now.14,882,752
7/28/14
Victoria’s SecretAngels Lip Sync
“Shake It Off”8,835,598
12/8/14
SwarovskiSwarovski Citra Sphere Chrono
Watch8,211,545
9/3/14
PandoraThe Unique Connection17,042,623
4/13/15
Old Navy#Unlimited5,905,4624/31/14
CartierThe
Proposal
6,417,6672/2/15
CartierWinter Tale6,422,07511/17/17
CartierLa Panthere – The
Feminine Fragrance7,810,508
4/14/15
CartierParis Nouvelle
Vague Collection4,201,332
6/2/15
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
79
September 2014 – September 2015, n=66 Overlapping Brands
Specialty Retail: Site Configuration on Mobile Devices
CURRENT INVESTMENT
Responsive Design Mobile Site No Mobile Optimization
32%
59%
9%
2014 2015
42%
55%
3%
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
80
September 2014 – September 2015, n=66 Overlapping Brands
Specialty Retail: Adoption of Mobile Site Features
MOBILE SITE
82%
88% 89%
71%
59%
12%8%
97% 97% 96%
82%
65%
39%
14%
Store Locator Mobile OptimizedCheckout
AccountSign In
Geo-Location UserRatings & Reviews
CheckInventory
ArrangeIn-StorePickup
2014 2015
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
81
September 2015, n=73 brands
Specialty Retail: Mobile Site Features
MOBILE SITE
77% with online inventory
38% include find product in store feature
15% with mobile optimized live chat
96% with store locator
80% with CTC for specific store locations
14% of brands allow arrange in-store pick up from mobile site
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
82
September 2015, n=67 Mobile Apps from 45 brands
Specialty Retail: Mobile App Features
MOBILE APPS
64% feature a store locator, 63% of brand apps include geolocation
54% of brand apps are e-commerce enabled
33% of apps utilize barcode scanning
60% support account loginand 50% incorporate newsletter signup
Source: L2, Inc., Digital IQ Index®: Specialty Retail, 2015.
83
Cole Haan’s Mobile App
NEW FORMS OF PAYMENT
Prioritizes Apple Pay and Touch ID for in-app purchases
Opt-in for push notifications and alerts
Offers additional methods of expedited payment such as PayPal
Integrated to brand Instagram with shopable links to product
CONCLUSIONS
SPECIALTY RETAIL 2015
85
LATE TO THE GAMEAs a group, Specialty Retail brands have largely failed to make the same omnichannel investments observed across their peers in the Department Store and Big Box retail verticals (i.e., reserve online, ship to store, store to door).
LESSONS FROM FAST-FASHIONSelect brands are rapidly adjusting their merchandise portfolio to mimic the success of fast-fashion brands. Increased variety underscores the urgency of investment in personalized product recommendations and accompanying offers.
LESS IS LESS…To date, only a third of brands offer customers the tools to define a robust user profile (beyond purchase history) and less than 10 percent incorporate advanced product recommendations into persistent account settings.
DIGITAL IQ = SHAREHOLDER VALUE
CONCLUSIONS
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