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Digital IQ INDEX®

Specialty Retail

The L2 Digital IQ Index®: Specialty Retail released on August 23, 2011 measures the digital competence of 64 online retail brands. Authored by L2, in partnership with Buddy Media, the study ranks brands according to their performance across 350 data points and four dimensions: Site, Digital Marketing, Social Media, and Mobile. Each brand was assigned a Digital IQ and corresponding ranking of Genius, Gifted, Average, Challenged, or Feeble.

“In Q1, 2011 e-commerce grew more than twice the pace of overall retail. Digital competence and mastery of mobile and social platforms will likely result in a bifurcation in retail between the haves (digitally competent) and the have-nots (digitally challenged).” —Scott Galloway

Key Findings

Digital IQ is positively correlated with brand’s’ return on invested capital (ROIC), suggesting that brands allocating resources toward digital see higher returns.

As a category, Department Stores—last year’s social media overachievers, did exceedingly well across the board, securing two Genius and four Gifted rankings.

Facebook presence has become the price of entry, as every brand has developed its own fan page. However, there still remains a significant opportunity for brands to monetize their Facebook communities—only four brands in the study have developed fully functioning f-commerce storefronts.

Sixty-seven percent of brands have mobile sites, almost triple the number from 2010. Eighty-eight percent of these are e-commerce enabled.

Brands that rest on their once impressive, now out-of-date digital properties are being left behind by their hungrier, more innovative competitors.

While 37 percent of brands in the Index were classifies as Gifted, only Macy’s, Victoria’s Secret, and Nordstrom earned the Genius distinction. The top 10-ranked brands are: