It’s not often that department stores are portrayed as beacons of innovation within today’s mainstream media. Lately, I find it’s more typical to read about young brands infusing digital into their retail strategies: live streaming fashion shows, in-store beacons and mobile payments. But a new report from L2 may change the way you think of department stores in the digital age.

The second annual Digital IQ Index®: Department Stores ranks 56 iconic global department stores across site and e-commerce capabilities, digital marketing, social media, and mobile and tablets. The firm found three department stores are leading the way in digital relevance; Nordstrom, Macy’s and Sears all achieved “genius status,” the highest of five rankings given by L2. While department stores might not have all the glitz and glam associated with streaming fashion shows and other press-worthy digital initiatives, they do have practical solutions that are meeting and exceeding customer demands – sophisticated mobile applications, PayPal acceptance, barcode scanning from mobile phones and the option to buy online and return in store for a seamless customer experience.

Creating an optimal omnichannel experience is wildly important because, while clicks still outpace bricks, 90 percent of all retail sales still happen in stores. For instance, Nordstrom earned the top spot for integration of social and commerce, including its new “like to buy platform” that enables instant Instagram purchases and shoppable in-store displays. Sears, which instituted its buy online, pick up in store initiative more than 12 years ago, was recognized not only for similar omnichannel efforts, but also for its Shop Your Way Try On app, which allows shoppers to curate their fitting room in advance by scanning items throughout the store.

In a CNBC article on the findings, L2 Research Director Danielle Bailey said, “Sears has a strong site [that’s] well-integrated with its loyalty program, providing in-depth product information. Sears is leveraging digital—via site, mobile, and social media—to attempt to provide a higher level of customer service.”

Some other notable findings from the report include:

  • Seventy-seven percent of department store brands offer a mobile app
  • Seventy-nine percent of department store retailers offer an optimized mobile site experience
  • Ninety-six percent of department stores have a Facebook page, 93% have a Twitter page and 86% have an Instagram page

L2 also looks at some of the missed opportunities within department stores today:

  • Just 18% of mobile sites support multiple languages
  • Only 13% host tablet-optimized sites
  • Less than a quarter provide real-time store inventory online

In a price-driven culture, where 40 percent off is the new 20 percent off, stores need to differentiate themselves through exceptional omnichannel experiences like Nordstrom, Macy’s and Sears. With an expected growth rate of 22 percent over the next five years, I believe department stores that invest in their omnichannel and digital efforts will reap the greatest rewards. And it is exciting to see some early leaders who are doing just that. Look for much more innovation to come!

Complete findings can be downloaded on L2’s site: http://www.l2thinktank.com/research/department-stores-2014-2

For more on department stores in the digital age, I recommend: