Digital Report Singles Out Fashion’s ‘Gifted’ and ‘Challenged’

L2, the New York-based think tank that tracks brands’ digital competency across platforms and rates their annual performance, just released its 2015 Fashion Index, and it makes for some pretty eye-opening reading. Not just because, as my colleague Mark Scott noted in a piece for our special luxury report, 10 brands drive 65 percent of site traffic (though that is a kind of astonishing fact in itself) but because it contradicts some pretty widely held beliefs about which brands are good at this digital stuff, and which brands are not.

There is an elaborate methodology behind the ranking, taking into account all platforms including social media and e-commerce and site visits and search engine optimization and digital advertising and email and so on, but what it boiled down to this year was that Burberry took the top "genius" spot, which isn’t exactly surprising (though it had slipped to No. 6 last year).

It was after that, however, that things got interesting.

Among the digitally "gifted" brands, 23 in total, were such names as Louis Vuitton (No. 4), Hermès (No. 16), Bottega Veneta (No. 20) and Valentino (No. 25) — all labels that in the past had largely been considered laggards when it came to the digital world. Indeed, apparently since starting its Instagram account, Valentino has posted more than almost any other brand.

Chanel, which is famously held up as an e-skeptic because it tiptoed into e-commerce only this year, fell just below the "gifted" ranking into "average" — but it topped that group at No. 26. beating such other "average" names as Alexander Wang (No. 44), Moschino (No. 44) and Saint Laurent (No. 47), all brands run by designers (Mr. Wang, Jeremy Scott and Hedi Slimane) typically lauded as being super-social-media savvy.

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Indeed, it’s notable that the two brands run by the designers most often viewed as role models for the Instagram age thanks to their gigantic number of followers, Riccardo Tisci of Givenchy and Olivier Rousteing of Balmain, didn’t perform as well as you might expect in the L2 ranking. They came in at No. 53 (Balmain) and No. 73 (Givenchy), the second being at the bottom of the "challenged" section, but happily escaping the "feeble" classification of the final 10 brands, which include Céline (No. 82) and four Puig houses: Nina Ricci, Paco Rabanne, Carolina Herrera and Jean Paul Gaultier.

So, besides the fact that everyone loves a ranking, what does this all mean, and why does it contradict expectations? Maureen Mullen, one of the report’s authors and the co-founder of L2, offered some translation.

First, she said, "the great myth of the Internet" is that it "levels the playing field."

"What we saw is that it’s the brands with the really deep pockets and the large networks of brick-and-mortar stores that can spend on integration, customer service and omni-channel that were the winners this year," she said. "Burberry offers click and collect at 200 stores, for example. Smaller brands can get into the frame, but then they are dependent on their e-tail partners to build their brands, and those multibrand partners are actually more interested in moving product."AdvertisementContinue reading the main storyAdvertisementContinue reading the main story

That is why, she said, the big global names such as Vuitton, Hermès and Valentino dominated the top sections, while "cooler," smaller, names such as Proenza Schouler and Rag & Bone appeared further down.

(She also pointed out that there were a lot of American brands such as Ralph Lauren, Coach, Michael Kors and Calvin Klein in the "gifted" section, and Kate Spade qualified as a "genius," in part because 70 percent of all online sales come from North America, and of those, 99 percent are from the United States.)

As to why Balmain and Givenchy didn’t seem to gain a meaningful halo from the social success of Mr. Rousteing and Mr. Tisci, Ms. Mullen said the brands had not made the leap from raising awareness, at which the designers excelled, to commercializing that awareness.

And her two big predictions for 2016?

First, the gap between big and small will grow, and groups that are able to spend "disproportionately" on integrating digital into their understanding of a vertical business will dominate.

And second, and related, watch out for LVMH Moët Hennessy Louis Vuitton. Though there is now a giant gap among digital competencies at its brands, from Vuitton at No. 4 to Céline, second to last, Ms. Mullen noted its appointment of Ian Rogers as chief digital officer this year and said: "I would not be surprised if you see LVMH double down and finally integrate its digital capabilities. On the media side and the real estate side, they provide scale better than any other group in the business, and they haven’t applied the same strategy to their digital investment. I expect that will change."

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