Department stores, long seen as retail dinosaurs, scored a big win in innovation according to Luxury Lab, a think tank that studies retailers’ online competence. Luxury Lab ranks retailers on their Digital IQ’s. This ranking system is based on a 350‐point data system based on digital competency, social media strategy, site interface, mobile commerce capabilities, digital marketing, and search engine optimization.

This year, Macy’s took the number‐one spot in the survey. Other department stores in the top ten were Nordstrom and Bloomingdales. Neiman Marcus, Saks Fifth Avenue, and Bergdorf Goodman all made the top twenty‐five. According to the founder of Luxury Labs, for retailers to be at the top of the pack, they have to make investments in social and mobile commerce. Results of the study also found that the average Digital IQ for department stores grew 14 points from 2010, making department stores second only to e‐tailers. The study also found that over 67% of retailers have mobile sites, versus just 25% a year ago.

Luxury retailers should also encourage customers to use tablets to engage more with their products. Customers use tablets for browsing. Recently TheFind.com (a website that helps customers compare prices) launched an iPad and Android tablet app called Catalogue that replicates the feeling of looking at a traditional paper catalogue. The creators believe that this approach will create more of an experience of “discovery” and browsing rather than just a quick price comparison. Surveys indicate that over 60% of tablet owners use their tablets to shop.

Discussion Questions:

1. What does it mean for department stores like Macy’s to have a high Digital IQ?

Rachel Strugatz, “Department Stores, M‐Commerce Leading the Social Media Way,” WWD.com, August 23, 2011.