Mobile commerce: how brands are falling behind

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A recent report has revealed that the majority of premium brands are failing to keep up-to-date with the opportunities presented by mobile marketing.

The latest L2 Prestige Mobile IQ report suggests that use of effective mobile marketing practices is currently surprisingly low amongst top brands.

The report looked at mobile applications, mobile sites, mobile marketing (including SMS) and overall innovation and integration, ranking brands included in the study on their Mobile IQ score.

L2 argues that over the next few years, the businesses which will thrive are those willing to engage with mobile marketing techniques. Brands need to develop and optimize powerful mobile commerce sites which are accessible from a range of devices.

According to Forrester’s report in 2011, m-commerce sales are set to quintuple over the next five years, resulting in $31 billion worth of sales by 2016.

mobile commerce

However, despite this forecast, a shocking 16% of the brands in the L2 report are yet to produce any kind of mobile app or website. In fact, almost half of the brands studied were ranked as ‘feeble’, meaning that their investment in mobile to date is little if any.

The brands at the top are offering engaging mobile apps, fully optimized m-commerce sites and flashes of creative genius.

Here are the top 10:

mobile commerce

These brands have managed to create some really effective mobile offerings which are often fully integrated into their rest of their offline marketing campaigns.

And those languishing at the bottom:

mobile commerce

How are these brands letting themselves down with mobile?

The main reason these brands appear to be lagging behind is because they fail to utilise the unique platforms that m-commerce, iPhone and iPad apps offer.

1. Failures in M-commerce

Those languishing at the bottom of the list are there because they don’t capture the quality of their websites in their mobile experience. Generally, across every category measured, mobile sites consistently failed to replicate the features found on their main sites such as video and product search. Another significant issue they face is that they are directly hindering m-commerce by hosting websites in Adobe flash – which iOS does not support.

2. User experience problems on the iPhone

As the report suggests, the majority of the 70% of brands which have iPhone apps appear to consistently fail to make sure that the user experience is really excellent. Less than a third of these apps use the iPhone’s GPS software, 17% of apps utilise the notification system and even fewer use the phone’s camera and gyroscope capabilities.

L2 quotes ABI Research which reports that the iTunes Store ranking algorithm will begin taking into account qualitative information such as user reviews and frequency of usage. As such, there is little point having a promotional app with little functionality in order to simply maintain appearances. Brands need to invest in mobile apps which are valuable to the consumer and which garner great customer feedback.

What’s next?

  • Brands need to invest in m-commerce now to take advantage of the increase in mobile usage.
  • They need to create a seamless customer experience across a number of devices.
  • Mobile apps need to provide real value and utilise the unique functionality of mobile devices.

By 2015, it is predicted that more users will access the Internet wirelessly via a mobile device than from a wired Ethernet connection. As consumers move their purchasing power from computer to mobile, brands cannot afford to be prudish about innovation in mobile marketing.

L2′s top 20 luxury brands using digital - Burberry lead the way

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A recent report has revealed that social media adoption by the fashion industry has exploded over the last three years. The latest L2 Luxury Digital IQ Index report which was led by Scott Galloway, Professor of Marketing at NYU Stern, reveals that there is now widespread adoption of social media channels by fashion brands.

The 49 brands studied in the report were given a Digital IQ according to how they scored in four areas of digital; their websites, digital marketing, social media and mobile capacities. They were then ranked “genius”, “gifted”, “average”, “challenged” or “feeble”.

Here are the top 20 luxury brands:

1. Burberry 11. Donna Karan
2. Kate Spade 12. Diane von Furstenberg
3. Coach =13. Calvin Klein
4. Gucci =13. Marc Jacobs
5. Dolce & Gabbana 14. John Varvatos
6. Tory Burch 15. Paul Smith
7. Ralph Lauren =17. Alexander McQueen
8. Hugo Boss =17. Jimmy Choo (client)
9. Louis Vuitton 19. Chanel
10. Michael Kors 20. Yves Saint Laurent

As you can see, there are some unsurprisingly big names in the top twenty. However, interestingly Kate Spade - ranked number 2 in the report - is a relative new-comer in the world of fashion.

As the report reveals, there is less correlation between Digital IQ class and the size of a brand’s offline business, suggesting that if you use digital and social media strategically, you could potentially have the same capacity for success as some of the main players in fashion.

So why has interest in digital increased?

Simple - because brands have discovered just how essential it is for their shareholder value. Have a listen to what Angela Ahrendts, CEO of Burberry (ranked with the highest Digital IQ) has to say:

“To any CEO who is sceptical at all: you have to be totally connected with everyone who touches your brand. You have to. You have to create a social enterprise today. If you don’t do that, I don’t know what your business model is in 5 years.” - Angela Ahrendts


More and more data is becoming available to support Angela Ahrendts’ statement. The Digital IQ report reveals that 67% of EU consumers and 50% of American consumers say that they research luxury items online before they buy them – which suggests that if you can influence that audience online, it can have a positive effect on your sales.

Which social platforms are luxury brands using?

Whilst many brands have established Facebook and Twitter accounts, it is interesting to note that a number of big names have been keen to adopt other platforms.

Tumblr
Only eight brands in the Index are on Tumblr, yet anecdotal evidence suggests that engagement rates surpass those on other social media platforms. Not only can it increase consumer awareness, but it is also a great way to establish and develop relationships with key fashion bloggers. Currently leading the way on Tumblr in terms of reblogs per post are Alexander McQueen with 520 and Oscar de la Renta with 313.

Instagram
Instagram is perfect for an audience which is passionate about beautiful images. More than 20 percent of brands in the Index are use Instagram to filter and share photos from fashion events and editorial shoots. As with most other social networks, Burberry is currently leading the way in terms of numbers, with almost 85,000 followers.

Polyvore

Almost a quarter of the brands surveyed have an account on Polyvore (22%), although only 5 of the 11 are deemed to be active users.

Polyvore offers brands in-depth analytics, which enables detailed measurement of success. The platform is well suited for special events and contests - Michael Kors’ contest to create a holiday look generated 280,000 impressions, 46,391 likes and 2,921 created sets.

What’s next? E-commerce and further social integration

Interestingly, the report highlights that 20% of the studied brands still don’t sell online, and that brands who do offer e-commerce gain 19% more visits per user on average.

A key opportunity is for brands to offer sharing features on their individual product pages, as those that do register more than twice the traffic growth (year on year) than those who don’t.