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For fashion companies, 2009 is turning out to be the year of social media.

Once reluctant to cede control, brands and retailers from low to high are embracing social media and using it to boost sales and brand awareness. Having a presence on the top five social sites — Twitter, Facebook, MySpace, Flickr and YouTube — is de rigueur. The top luxury fashion brands on Facebook in terms of fans are Gucci, Chanel, Dolce & Gabbana, Ralph Lauren, Coach and Prada (although the Prada page is an unofficial one), according to New York University professor of marketing and Red Envelope founder Scott Galloway. Luxury fashion brands with the most Twitter followers are Vuitton, Tory Burch, Yves Saint Laurent and Christian Dior.

“Traditionally, luxury brands built relationships with customers through flagship stores, traditional public relations and advertising,” said Galloway. “Now they’re building relationships through Facebook, user reviews and consummating the transaction [online].” Of course, the product remains paramount, he said.

But companies now are going way beyond simply posting pages on those sites. They’re building their own social networks, games, iPhone applications and cross-platform advertising campaigns, and partnering with third-party social sites focused on fashion, such as the search engine Shopstyle, the fashion social network and outfit-sharing site Chictopia, and the outfit-building site Polyvore. For several years, they have been reaching out to bloggers and writing their own blogs, which boosts their rank in searches. Macy’s, Urban Outfitters, Zappos and other retailers have found user reviews (and user-contributed photos and videos) increase sales. Saks Fifth Avenue, Urban Outfitters and others show which items are most popular among shoppers, which can push a popular item to selling out.

Despite all the hype and hubbub, though, and the success of eBay, Etsy and Amazon, these remain early days for social media and fashion. Threadless, the small online retailer of crowd-sourced graphic T-shirts, is one of the first successful apparel makers whose business model is based on social media, and so far no designer has made their name using the medium.

Some brands, especially luxury ones, remain reluctant to dive too deeply into the social media waters. NYU’s Galloway last week released the first annual ranking of the digital competence of luxury brands, called the Digital IQ Index. A group of 109 companies were evaluated and ranked on a variety of metrics, including the interactivity of their site, e-commerce, traffic and how well they use social media.

The winner in the fashion category was Louis Vuitton, closely followed by Ralph Lauren. Marc Jacobs and Yves Saint Laurent were described as “challenged,” and Bottega Veneta was called “feeble.” Stila and several watch and jewelry companies also fell into that category.

Prada ranked as “gifted,” but only because it is one of the most highly searched fashion terms on the Web and therefore has huge amounts of traffic. Otherwise, the site scored poorly. “If it doesn’t get its act together, it’s going to experience a dramatic fall from grace,” Galloway said.

While the social Web is probably having the biggest impact on media, music, entertainment and making personal connections, in the fashion sphere, the Internet has made celebrities of Cory Kennedy, Fred Figglehorn, Scott Schuman of the Sartorialist, Yvan Rodic of Facehunter and Perez Hilton, among others. In fact, so much so that Schuman and fellow bloggers Garance Doré, Tommy Ton and Bryan Boy were given front-row seats at the D&G show in Milan on Thursday, complete with desks and laptops for instant transmission, knocking the likes of Neiman Marcus’ Burt Tansky, Saks’ Stephen I. Sadove and other retail heavyweights to the second row.

Another big change is that people who love fashion and are driven to constantly seek out new things can upload photos of their own discoveries or see what people around the globe are wearing in a minute, just by going to one of the dozens of photo-sharing or streetwear blogs, such as Schuman’s, that chronicle fashion. It is more immediate, in-depth and less mediated than traditional media. What’s more, it has accelerated the spread of trends around the world, users say. Print magazines have responded by posting street photos on their own Web sites.
According to a study released in July by Hill & Knowlton, 27 percent of Generation Y say they are influenced by an “online community or blog,” compared with 9 percent of Baby Boomers and 19 percent of Generation X. Meanwhile, traditional media continues to be important among all age groups, with 19 percent of respondents saying they are influenced by print articles and 12 percent by radio or television programs.

In the past six to nine months, retailers have joined social sites in droves. According to the publication Internet Retailer, 56.8 percent of the Internet Retailer Top 500 have a page on Facebook, 41.4 percent have a channel on YouTube, 28.6 percent are on MySpace and 20.4 percent are tweeting.

The most obvious and measurable effect of what Galloway has termed “social media optimization” is directing traffic and sales to a company’s Web site. Search engines are still the king of traffic, followed closely by the e-mail messages most retailers send out daily, but social media is growing quickly.

As a result, it is rare these days to find a fashion company with e-commerce that isn’t doing something with social media. Juicy, St. John, Tory Burch, Ralph Lauren, Gucci, Vuitton, Oscar de la Renta, Sears, Urban Outfitters, American Apparel, Topshop and Wet Seal are some of the better-known brands that have been at the cutting edge of using it in innovative ways to boost brand awareness and sales and communicate with their customers.

“Some sites are now getting 10 percent or more of their traffic from Facebook,” said Galloway. Two years ago, it was zero. The fastest-growing segment on Facebook is 45- to 55-year-old women, which is the sweet spot for luxury brands to target. Facebook is among the top 10 referral sites for more than half of the top luxury brands, he said.

Brands that have a strong social media optimization strategy — with a presence on all five sites or more — could be getting a third of their traffic from social media sites, according to Galloway. What’s more, he warned, companies that embrace social media could potentially have double the online traffic in the next few years versus those that don’t.

But traffic is just the tip of the iceberg. “Branding online primarily will happen through social media,” said Marco Corsaro, founder and chief executive officer of new-media consultancy 77Agency, which has been holding social media seminars for luxury marketers. “The only question is how big this will be.”

Among the agency’s fashion clients, the majority of traffic comes from people typing in the URL directly, the second from Google and the third from Facebook, he said.

Another benefit of social media is that it allows companies to understand their customers and get feedback from them, according to firms who use it.

Saks, Theory and Topshop are among the fashion companies that have created events or campaigns that mash together the online and offline worlds. “Integrating offline and online is something we’re doing more and more of,” said Topshop head of marketing Sheena Sauvaire. “Our customer is online all the time now. It’s increasingly the medium they’re using.”

The company was one of the first to have a widget on Facebook, which shows the latest looks each week. Shoppers can click through to the Topshop Web site to buy. Even before the company had an official page, about 20 percent of its online traffic was coming from Facebook — either from the unofficial page or the widget, said Sauvaire.