Digital 'is not a strategy'

25 November 2013
NEW YORK: Digital is not a strategy, but is rather a tool that supports corporate strategy, according to a leading industry figure.

Scott Galloway, founder of digital think tank L2, was responding to remarks made by Jamie Nordstrom, president of Nordstrom Direct, when asked which social media platforms he found most productive. "ROI is very hard to measure," replied Nordstrom. "Frankly we've taken a break from trying to figure it out."

Galloway's take on that was "it probably means most of it is not working", although he qualified that by suggesting that one metric that could be placed on it was how much it signalled innovation.

"When you stop measuring the hard ROI that's usually a sign that you've decided that 'this is a speculative investment and we're going to keep doing it but we're not going to hold it to the same scrutiny we hold our other media channels'," he said.

Galloway was also full of praise for Nordstrom's work on Pinterest, highlighting its practice of taking the most popular Pinned items and then putting little Pinterest logos on the products in store.

When pushed, Nordstrom said he liked to use Twitter to see what customers were saying and to be able to respond. "Facebook is more people talking at other people, Twitter is more of a dialogue," he said.

Historically Nordstrom stores have not been big advertisers preferring to build business on traditional word of mouth. "Social media is the same word of mouth on steroids," said Nordstrom, as he remembered how the department store's involvement in social had picked up through it replying to customers asking questions.

Galloway confessed he did not know how that translated into sales, and nor did he know how being nice to a customer or taking a return for an item bought six months ago affected revenues.

"We don't know what the ROI is on that but over time you build up trust and engagement and ultimately loyalty," he said.

Galloway was very clear, however, on channel strategy: "If you're focused on a channel strategy as how you're going to serve customers, you're looking at it completely the wrong way."

Talk of channels cannibalising each other was "archaic", he added. "Channels don't compete with each other and customers are not loyal to channels, customers are loyal to brands."

Data sourced from L2; additional content by Warc staff
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