In a report that doesn’t exactly make for “Ho Ho” holiday reading, L2, a benchmarking and education firm, helping member brands shape their digital roadmap, has released its latest Watches & Jewelry Digital IQ Index.

 

While many companies have understood the need to shift to digital to capture the new generation of consumers, L2 posits that this shift is harder to implement in reality. “Brand equity that took decades (if not centuries) to build does not transfer proportionately online.”

 

According to L2, while 10 brands control more than 40 percent of global sales, online, the top 10 brands control nearly 75 percent of all traffic to brand.com destinations. Interestingly, only three brands – Tiffany & Co., Rolex, and Omega – appear on both lists, which L2 says signals a “reshuffling of the deck favoring challenger brands attracting a disproportionate share of online equity.”

 

The list of the top 10 brands (share of global sales) are Cartier (10%), Tiffany & Co. (7%), Rolex (7%), Omega (6%), Bulgari (4%), Longines (3%), Boucheron (2%) Van Cleef & Arpels (1%) and Graff (1%).

 

As for the top online brands (share of total site visits), Tiffany tops the list (23%), followed by newcomer and Pandora competitor Alex and Ani (13%), Pandora (8%), Swarovski (6%), Shinola (6%), Rolex (5%), Omega (4%), David Yurman (4%), Citizen (3%) and Montblac (2%).

 

Interestingly, for an industry that spent so much time – especially in the diamond sector – trying to promote brands, L2 claims that while less than a decade ago, 58 percent of affluents could identify their “favorite” jewelry brand, that number currently stands at 40 percent. One of the reasons for this, it states, is that “search has eroded the value of a given brand and may signal the sun has passed midday” on what it calls the “brand era.”

 

The reasons it cites is that having access to information online expands a customer’s initial thoughts and, among other things, establishes expectations around pricing and availability. So, while brands still matter, it appears they matter less – an evolution that is likely to continue.

 

L2 divides its classification of how companies are performing into five categories according to a points system. (Click here to see the report and methodology). These categories range from Genius (140+ points), Gifted (110-139), Average (90-109), Challenged (70-89) and Feeble (<70).

 

Tiffany & Co. (157) is the only company to make it into the gifted category. Gifted includes those companies already mentioned above, as well as others such as Chopard, De Beers Jewellers and Hearts On Fire.

 

The Average category features Trollbeads, Harry Winston and Ippolito. Further down in the Challenged category are brands such as Mikimoto, Chaumet Paris, Fabergé and Forevermark. Lower still are Graff, Fred and Shamballa Jewels. 

 

Interestingly, eight LVMH brands feature on the list, but their performance is all over the place. Tag Heuer is up there in tenth place; Chaumet Paris comes in at number 36 while Fred is down there at lowly number 57.

 

Earlier this year, we wrote about LVMH’s decision to hire Ian Rogers, former head of Beats Music and senior director at iTunes, as its chief digital officer. So, we look forward to seeing how a unified strategy will work across the company in 2016. Clearly, some things are working at the group; and some things are not.

 

In terms of what works and what doesn’t digitally, L2’s analysis proves that companies still have a long way to go. For example:

 

“Of the 65 brands that include links to find physical stores, 27 fail to utilize geolocation technology, giving users an unresponsive planning experience. In an even larger gap, 76 percent of brands offer search functionality on site, but only 23 percent let users filter or sort returns, delivering a potentially frustrating product discovery cycle. Finally, among the 52 percent of brands that offer e-commerce, 15 percent of brands facilitate online purchases via a separate e-commerce site, requiring redundant maintenance cost, compounding inconsistent navigation schema and introducing obstacles to search engine optimization efforts.”

 

L2 also takes brands to task for not keeping up with what “the kids” want. Too many brands are still living in the past i.e. Facebook, while failing to utilize “new” social networks such as Instagram. Apparently, “[a]lthough Facebook’s 1.6 billion monthly active users dwarfs Instagram’s recently achieved 400 million total platform users, Instagram continues to drive unparalleled organic brand engagement no longer possible on Facebook.”

 

Instagram now tops the social media landscape in terms of engagement – L2 puts the number at 80 percent of total interactions in the third quarter, with Facebook’s down at 19 percent.

 

Clearly, there is still a lot of work to be done – and a lot of opportunities to grab them as we head in to 2016.

 

Have a fabulous weekend.