L2 Report Identifies Digital Strategies for Department Stores to Confront Sinking Profits
The L2 report benchmarks the digital performance of 64 Department Stores operating in 14 markets globally. The report highlights key insights and best practices for brands to remain competitive in the retail environment amidst declining revenues and growing threats from Amazon, off-priced retailers, and fast fashion. The L2 Digital IQ Index methodology examines a brand’s strengths and weaknesses across the four digital dimensions of Site and E-Commerce, Digital Marketing, Mobile, and Social. Index brands are classified as either Genius, Gifted, Average, Challenged, or Feeble.
“Despite their best efforts to lure shoppers back, Department Stores are struggling to attract customers and maintain their relevance amid an increasingly competitive retail environment,” explained Dan Yelin, Retail Research Lead at L2. “As new and emerging players continue to chip away at beleaguered retail giants, Department Stores must dig in their heels with responsive digital strategies and strong omnichannel capabilities.”
Key findings from L2’s report include:
Content Drives Engagement: The presence of lookbooks and blogs on Index brand sites is positively correlated with longer site visits, boosting the average number of page views by 17 percent. Sixty-nine percent of Index brands have invested in digital lookbooks, while less than half have adopted newer content forms such as consumer-facing blogs and product-oriented videos.
Inbox Overload: Over the past year, Index brands sent 25 percent more emails, driven largely by a 50 percent increase in product recommendation emails that retarget consumers based on prior browsing behavior. Discount emails have been taking over inboxes, representing 32 percent of all messages sent. However, the sheer number and frequency of discount emails has a negative impact, resulting in decreased open rates for nearly two thirds of Index brands.
Android Apps Excel: Ninety-eight percent of Index brands offer an app on the iOS platform, while Android adoption lags at 80 percent. However, despite the Index’s overwhelming partiality for iOS, Android apps generate almost three times as many downloads as their iOS counterparts.
Mobile Misses the Mark: Mobile is rapidly becoming the most important interface between brands and consumers, however only 33 percent of brands incorporate live chat into their mobile sites, and just 30 percent of brands have integrated single-page checkout. Similarly, less than 60 percent of Index brands offer “click-to-call store” buttons into their mobile sites and only 30 percent enable users to find a product in store.
L2 benchmarks the digital performance of over 2,200 brands across 12 industries globally. The L2 Digital IQ Index is the global standard for measuring digital competence. We analyze 1,250 data points to provide brands with actionable, data driven insights on their digital performance.
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