This research aims to analyse consumers’ (Millennials and Gen Z) luxury consumption behaviour by focusing on the intrinsic and extrinsic motivations that drive consumption of luxury goods. Then, the study investigates whether they prefer to purchase offline or online for luxury goods. Lastly, it analyses which media most influences individuals when it comes to luxury consumption. An online survey is developed and distributed to Millennials and Gen Z. A first round of data collection took place in 2022 and a second round of data collection will take place at the beginning of 2024. Initial findings show that consumers are driven by intrinsic rather than extrinsic motivations when purchasing and who influences more when buying luxury online. Furthermore, it emerges that consumers prefer to shop offline, highlighting the importance of physical stores.
Offering a good shopping experience on the web is key for fashion luxury brands. However, it is not a field much analyzed by researchers. This research presents a systematic analysis of the usability of the web and its content in more than 60 fashion luxury e-commerce.
This study aims to address two important questions: will advertising on mobile short-form video apps jeopardize the value perception of luxury brands (RQ1), and if so, how will self-deprecating online reviews eliminate these negative effects (RQ2). An experimental design approach was employed to investigate the proposed research questions. Three experiments were conducted to test the hypotheses. SPSS was used for data analysis. The study 1 finds that compared with traditional media, advertising on mobile short-form video apps shortened the psychological distance between consumers and luxury, therefore has a more negative impact on consumers’ perception of luxury brands. The study 2 reveals that self-deprecating online reviews can eliminate the negative effects of advertising of luxury brands. On the basis of previous research, this paper proves the negative influence of social media on luxury brands in the scene of new social media-mobile short format video application. In addition, it also studies the moderating effect of online comments, especially self-deprecating comments, on consumers' perception of luxury brands. This study outlines theoretical contributions and practical implications for the luxury marketing management and made suggestions for future research in the field of luxury marketing in Social Media.
This research has adopted Word-of-Mouth (WOM) and social support theory along with a social media (SM) perspective to investigate why consumers enjoy using SM and interacting with luxury brand. Focusing on fundamental human needs, this study aims to examine fulfilment of which type of needs enhances interactivity on SM, encouraging in turn WOM adoption and brand-self connection. Our results have shown that consumers’ cognitive and integrative needs drive social interactivity and lead to WOM adoption and brand-self connection. However, no relationship is found between social needs and interactivity. Such relationship can only be strengthened with the presence of emotional support as perceived from the company and its brand.
The millennials are an important generational group of consumers who purchase luxury online and therefore to know their attitude to luxury has become a significant subject for our study. This study explores whether materialism, need for uniqueness, susceptibility to normative influence, and social media usage affect millennials’ attitudes and purchase intentions toward luxury fashion brands online. In addition, this research examines moderating effect of each dimension of national culture on the relationship between factors and millennials’ attitudes toward luxury fashion brands online. Hofstede’s framework is considered to be the most reliable measure of national culture (Yeniyurt & Townsend, 2003). We used four dimensions of Hofstede’s model of national culture: masculinity, individualism, power distance and uncertainty avoidance. In study 1, we examine millennials’ attitudes toward luxury fashion brand through Q methodology. In study 2, we examine relationships between variables using the SPSS 20.0 program for descriptive statistical analysis and the AMOS 20.0 program for structural equation model (SEM) analysis. The findings will enable marketers of luxury fashion brands to understand millennials’ attitudes toward luxury fashion brands and increase the sales among this target group.
Nowadays, customers have become increasingly dissatisfied with accepting products and services offered by suppliers. Instead, they are involved in product development as co-productor (Prahalad & Ramaswamy, 2004). There are diverse types ranging from online discussion to virtual design enabling customer involved in co-creation activities related to product support. “Customer design” enables the firm to have possibilities enhancing the whole value of product design during development process (Fuchs & Schreier, 2011). However, some of scholars have found that customers cannot always play a useful role in luxury product design. Fuchs and Schreier (2011) studied that buyers can easily observe the source of design, which damage the image of co-designed product. That is because luxury product always played as a specific label of wealth and states to some extend (Ko & Phau, Aiello, 2016). Thus, this study draws from co-creation theory to investigate the specificity of online luxury design, using an experimental method. We analyze and discuss the diverging affection of luxury design held by co-creation idea innovativeness and behavior intensity, and the role played by sponsoring firm and community members.
Many countries have been reducing trade barriers to enhance movements of products across borders. This moderation of trade policies combined with the enormous growth in cross-border e-commerce has provided consumers with more foreign product choices than ever before. Accordingly, the attitudes toward foreign products have been of great interest to international business and consumer behaviour scholars in the last few years. Previous studies on the effect of country of origin (COO) on product evaluations show that consumers in developed countries prefer domestic over foreign goods for several reasons, ranging from a risk-reducing prejudice to a nationalistic bias against foreign products (Bilkey & Nes, 1982; Wang & Chen, 2004). However, the rising role of emerging markets as valuable demand markets calls for more insights into the psychological, socio-economic and cultural factors that may determine differences in attitudes toward foreign products (Batra, 1997). The study examines the impact of bandwagon luxury consumption behaviour on cultural dimensions - related to consumer ethnocentrism and materialism - and, at the same, verifies the influences exerted by their interactions on attitudes toward luxury goods (brand consciousness, product beliefs, intentions to buy online). It develops and empirically tests a conceptual model of bandwagon luxury consumption on a sample of Chinese consumers.
This study seeks to examine the effects of customer’s power motivation in the social media context, driven primarily by to extend the theory of how powerlessness induces compensatory consumption (Rucker and Galinsky, 2008). Power motivation refers to a chronic desire to strive and retain power (Maner, Gailliot, Butz, & Peruche, 2007). Given that positions of power are often associated with enjoyment of social and material rewards, naturally some individuals strive to achieve and retain positions of power as a satisfying goal in itself (Cassidy and Lynn, 1989). These ‘power-strivers’ are motivated to achieve status and superiority, and prone towards negative emotional states when confronted with situations that induce a state of powerlessness. The sense of inferiority have been shown to lead to greater desire for status-enhancing goods, such as luxury items with more prominently displayed brand names to restore their sense of wellbeing (Rucker and Galinsky, 2009). In the context of social media, research suggests that longterm exposure to upward social comparisons on social media resulted in lower levels of self-esteem (Vogel, Rose, Roberts, & Eckles, 2014). We argue that observing other people’s ‘highlight reel’ on social media may also negatively influence the consumers’ sense of power. Thus, these type of consumers are likely to be more receptive towards communications that advertise status-enhancing goods. However, this effect should be particularly pronounced in consumers who have high power motivation in the first place. Subsequently, our first proposition is that when exposed to negative social comparisons, power motivation would moderate the consumers’ sense of inferiority and lead to more positive attitude towards advertisements of luxury goods. Our second proposition points to mindfulness as a palliative to mitigate this sense of inferiority, since exercising mindfulness enables better self-regulation that contributes to behaviors and decisions that positive contribute towards one’s wellbeing (Brown and Ryan, 2003). Two experimental studies confirm our hypotheses that when exposed to upward social comparisons on social media, power-strivers exhibit more positive attitude towards advertisements of luxury goods, mediated by a sense of inferiority. In the second study we found that implicitly inducing mindfulness mitigates the effects of power motivation. This paper thus enriches the understanding of the role of consumers’ sense of power in the context of social media. Furthermore, we offer a balanced view that (1) unpacks how marketers could exploit social media features to induce desire for luxury goods but also (2) suggests ethical solutions that contributes to positive psychology literature in the context of social media usage.
Using the framework of social support, we aim to examine factors influencing social Word-of-Mouth (WOM) adoption. The proposed research model will be tested among customers who are active in the existing active social media platforms and have had experience in engaging with the activities of luxury brand communications.
Introduction
Today the most promising communication environment for reaching and interacting with stakeholders is the social media ecosystem (Hanna, Rohm and Crittenden, 2011). The social media has grown so rapidly in the past years that now impact the business processes and models (Henning-Thurau, Hofacker and Bloching, 2103). Many Brands begin to take advantage of the fluidity between social media and WOM for creating brand experiences that merge real and digital conversations, cutting through in incredibly powerful ways. However, the recent research (Godey, Manthiou, Pederzopli, Rokka, Aiello, Donvito and Sigh, 2016) suggest that luxury brands performing well in social media engagement. However, they are often lagged behind in WOM performance. Despite growing interest in examining the influence of social media marketing on consumer’s responses through brand equity creation (Godey et al., 2016; Jim and Ko, 2012), studies about social media in luxury brand communications remain to be scarce. An investigation of customer’s motivation behind participation in social media is timely and relevant which can help luxury brands unleash its potential. Moreover, development of an effective social WOM adoption model can help to provide a better picture of consumer interactions in online luxury brands communities, thus strengthen customerfirm relationship in longer term. Specifically, this research intends to answer the following two questions: 1) What are the major determinants of social WOM adoption in luxury brands communications? 2) Whether social support affects a. perceived source credibility; b. perceived information quality; c. user experience?
Literature review
Social media interactivity
The concepts of social exchange (Blau, 1964) and the norm of reciprocity (Gouldner, 1960) have long been used by Marketing researchers to describe the motivational basis behind customer behaviours and the formation of positive relational attitudes (e.g., Wulf; Gaby; Iacobucci, Dawn, 2001; Rafiq; Fulford and Lu 2013). More recently these concepts have been used to explain why customers enjoy interacting with each other in social media (Liang, Ho, Li and Turban 2012; Godey et al., 2016). Social media interactivity is social interaction of people in social networking sites by Web 2.0 technologies such as Facebook, Instagram (Hajli, 2016). For instance, Facebook has more than two billion monthly active users which is a great example of a platform. In fact, people love to interact with each other. When they favourite and like each other’s posts that would reinforce the closeness.
Online social support
Recent research has found that social interaction can bring social value to their users and that the social media is a powerful vehicle for an individual to build close relationships with others and to enhance the individual’s well-being (Liang et al., 2012; Eastin and LaRose, 2005; Obst and Stafurik, 2010; Shaw and Grant, 2002; Xie, 2008). Social support has been found to be a major social value that social media users can obtain from an online interactions (Eastin and LaRose, 2005; Obst and Stafurik, 2010; Huang, Nambisan and Uzuner, 2010). Social support is a multidimensional construct which refers to an individual’s experience of being cared for, being responded to, and being helped by people in that individuals’ social network (Cobb, 1976). Schaefer, Liang et al.(2012) claim that , online social support consists both tangible (e.g. instrumental and appraisal support) and intangible elements (e.g. informational and emotional support). Given the specific context, this study mainly focuses on the latter. Informational support refers to providing messages, in the form of recommendations, advice, or knowledge that could be helpful for solving problems. By contrast, emotional support refers to providing messages that involve emotional concerns such as caring, understanding or empathy. These two types of messages are the major support mechanisms for social interactions (Hajli, 2016).
Antecedents of social WOM adoption
Information adoption can be defined as the process of engaging purposefully in consuming information (Cheng and Thadani, 2012). Informational support provided through social interaction of individuals in social media can be in the form of ratings, review, recommendations or referrals. Therefore, when consumers search for information provided by other users to make a better decision for their purchasing, they are adopting information. From a marketer’s perspective, this process also helps to build long-term advocacy. This research argues that social media provides more opportunities to the individual to adopt WOM. The existing literature has identified several antecedents of social WOM adoption and most of these studies focused on travelling websites (Filieri; Alguezaui and McLeay,2015; Hajli, 2016). Beldad, De Jong, Steehouder (2010) have categorized the major antecedents of social WOM adoption in the literature into three categories namely customer-based antecedents (e.g. user’s experience during the social interactions); website based antecedents (e.g. perceived information quality) and company based antecedents(e.g. perceived source of credibility). Source of credibility is considered as fundamental predictors of consumers’ acceptance of a message in traditional WOM adoption (McGinnies and Ward, 1980). To facilitate the evaluation of credibility of a source, more and more social platforms require contributors to create a web profile upon their registration. Customers need to provide personal information (e.g. profile picture, personal preference). Furthermore, many social media website utilise reviewer reputation systems to enable customers to assess the credibility of reviewers. Zhang and Watt (2008) argue that the higher source credibility of message perceived in online social media, the higher level of information adoption would be. Moreover, the quality of information in online reviews is perceived as a very important cue for consumers to assess the website (Filierri, et al., 2015). Krishnan; Biswas and Netemeyer (2006) point out that concrete information provided by the website such as detailed features of the product/service is likely to be perceived as more credible than those from abstract information like peripheral description of the product/service. Finally, in marketing literature user experience is strongly related with trust (Yoon, 2002). In an online context customers’ negative experience is likely to affect their trust about the company. As a consequence, they are likely to engage in negative WOM. Research shows that user experience has a strong impact on the social WOM adoption (Liang et al., 2012).
Method
Structural Equation Modeling (SEM) will be employed for examining the research objectives of this research. The questionnaire for this study will be created through a professional online-based survey tool. As this research focuses on the factors influencing social WOM adoption in relation with luxury brands communications, the proposed research model will be tested among customers who is active in the existing active social media platforms and has had experience in engaging with the activities of luxury brand communications such as posting review or comment other’s post).
Result and conclusion
This research has adopted the electronic WOM theory and the social media support theory along with a social media perspective to investigate how customer’s interaction in social media affects their behaviour in relation to luxury brands consumption. The results show that social WOM facilitates the evaluation by customers about the luxury products using social media. Moreover, WOM has emerged with broad accessibility and the capability to be evaluated and measured easily by other consumers. This study gives practical implications on how to use social media to develop online communities for luxury brands. In conclusion, when going online, luxury brand should consider the importance of converting the online brand strategy into an interactive and engaging experience for their users and online communities.
Introduction
Recently global luxury brands have put their effort into strengthening their businesses online. This can be seen as an effort to overcome their stagnant growth by focusing on steeply increasing online markets as their target. In the midst of global recession, online luxury brands have continued to show rapid growth each year. Bain & Company (2017) has forecasted offline growth of global luxury brands at the annual average growth of 2~3% by 2020 while the online markets would show the average growth of 15% annually by 2020. Moreover, due to the expansion of importers with official copyright to the online sales and stabilization of e-payment system, online markets have gained consumer trust leading to the increased rate of consumers purchasing luxury brand online more. McKinsey Consulting (2017) has forecasted online sales of luxury brand would reach up to 28% of the total sales by 2025. Reflecting such expectations, luxury brands are in the process of proposing multiple channels of online sales and communicating through Social Network Service (SNS) marketing as their core strategies. As consumer usage of SNS, such as Facebook, tweeter, or Instagram, have increased, so the value of consumer toward luxury brands has changed. Since the introduction of the standing characteristic of social media-communication to the luxury brand market, the luxury brands not only became a privilege of the high minority group but also became available for anyone to easily purchase with absolute information availability of price, quality, location, etc.
Theoretical Development
Consumers are using social media sites to search for information and deviating from traditional media (e.g., television, radio, and magazines) (Mangold and Faulds 2009). The emergence of social media has changed communication method from one-way communication to multi-dimensional, two-way, peer-to-peer communication (Berthon, Pitt, and Campbell 2008). Social media platforms offer a chance for brand to familiarized interact with consumers. Also, consumer can be interacted with another consumer through social media. The most important factor for luxury brands to establish an online business strategy is communication with their consumers. Luxury brands that are most accustomed to communicating with their limited consumers in their offline stores providing high quality services, it is inevitable for them to fear the lack of face-to-face interaction with their consumers in online markets. Social media began to serve the luxury brands as the alternative communication channel within the online markets. Moreover, social media has proven effective in drawing consumer’s voluntary Word of Mouth(WOM) since social media interaction is important motivation for consumer to creating user-generated contents (Daugherty al., 2008). The social media provides the consumers with a platform to meet and communicate with others with similar interests in specific brand goods and services that makes target marketing easier than before (Muntinga et al., 2011). Furthermore, the social media platforms provide the consumers with restriction-free comments on a certain brand to other interested parties, the users voluntarily taking the role of eWOM (Kim & Ko, 2012; Vollmer & Precourt, 2008). Luxury brands also seek to take this advantage of social media. The extent of spreading word of mouth is at the most viral through social media platforms, influencing the consumer’s purchasing behaviors to a great extent as proven in many previous researches (Lau and Ng 2001; Nabi and Hendriks 2003). Thus, the purpose of this study is to examine the impact of the consumer’s multidimensional value towards luxury brands on social media WOM intention and purchase intentions at the same time. Moreover, through extensive literature review with qualitative interview on consumers’ perceived value on luxury brand/product, consumer value dimensions on the luxury brands are categorized into six value factors (e.g. conspicuous value, status value, materialistic value, hedonic value, uniqueness seeking value, price-quality perceptions).
Research Design
The study conducted a thorough literature review and focus group interview to develop a comprehensive model of understanding the importance and dimensionality of customer value on luxury brand. After analyzing qualitative data on consumer value perception on luxury brands/product, online survey was performed using a customer sample in the United States. A web-based online survey was conducted using an online research panel service. After filtering and cleaning data collected, a final usable sample of 287 were analyzed to test hypothesized model. Measures for luxury brand on perceived values (including conspicuous value, status value, hedonic value, materialistic value, uniqueness seeking value, price-quality perceptions), social media word-of-mouth intention, and purchase intentions for luxury products were rated on a 7-point Likert scale ranging from strongly disagree to strongly agree.
Result and Conclusion
The result show that the relationship between conspicuous value, hedonic value, uniqueness and price-quality perceptions with social media WOM were found to be significant impact. However, social media WOM were not affected by status value and materialistic value of luxury brand. Conversely, status value and materialistic value had a considerable influence on purchase intention for luxury brand online. And social media word-of-mouth had a significant positive effect on consumer purchase intentions for luxury brand. In the era where digital importance is at its peak, the expansion of the luxury brands to online business has become requirements and not optional consequences. It is not easy for luxury brands with their unique styles and identity, as well as high brand awareness to settle in an online market where variety of lifestyles and cultures coexist. For this reason, the study on the multidimensional consumer value on luxury brands holds its contribution to the academia and industry practitioners. This study empirically examines the influence of consumers’ perceived multidimensional value on the luxury brands to WOM and purchase intentions through social media. This paper has revealed that the consumer’s WOM intention on luxury goods does not necessarily correlate with the purchase intention. However, the consumer who has developed WOM intention through social media has shown to possess positive influence on the purchase intention. This results also indicated the importance of the exposure of the unique luxury brand image by the luxury brand managers to the social media in order to generate voluntary consumer WOM. Furthermore, in order to increase their social status, the necessity of online consumer community for sharing their special experiences is ever more present. Such online consumer community would serve to expand the communication channel between the brand and the consumers, thus leading to increase intimacy between two parties. The study was carried out to the American consumers; following study should be carried out to Chinese consumers or developing countries where luxury brands are exposed to the rapidly growing luxury brand markets. Moreover, an in-depth study on strengthening effective marketing strategy by segmenting consumer value on luxury brands should be conducted consequently.
Introduction Luxury is an intriguing and alluring concept. The word ‘luxury‘ is used very often in advertisement, indicating something positive, some-thing worth striving after, something worth desiring. This thesis will focus on how luxury, and particularly luxury brands, are created, represented and consumed in an online environment. The Internet has proven to be of great importance for many types of brand when it comes to communicating and providing information to consumers and potential consumers. Luxury brands, however, work on different premises than other brand categories. Thus, luxury brands on the Internet would seemingly be an oxymoron. Given the growing importance of the luxury goods industry in economic terms and the increasing scholarly interest for not only the phenomenon of luxury brands but also luxury brands online (c.f. Dall‘Olmo Riley and Lacroix, 2003), it would seem that more systematic research is warranted on how brands, and luxury brands in particular, are handled on the Internet. The consumption of luxury brands, as opposed to the consumption of physical goods, lies in the difference in ownership. A luxury brand can be ‘consumed’ without the actual owning of a physical good produced by the brand. This type of consumption is instead a sort of merging of the consumers‘ view of themselves with their image of the luxury brand. This relatively new way of viewing consumption is of central importance when viewing brands online. The virtual ownership or ‘consumption‘ of luxury brands also brings with it new forms of expressing ownership or kinship with the luxury brand, as well as with other types of consumer sharing in the affection of a brand. The problems facing luxury brands, is best summed up in the ‘luxury brand paradox‘, in which the core is a balancing act. In this balancing act, the perception of exclusivity surpasses that of actual scarcity. The perception of exclusivity has to be invoked in consumers for the luxury brand paradox to maintain equilibrium. If (or perhaps when) there was an actual scarcity to luxury goods and luxury was truly limited, the consumption of luxuries was quite different from the consumption of luxury brands today. The clicks environment The clicks environment has brought with it not only new ways for brands to communicate with consumers but also for consumers to ‘consume‘ the brands. The following aspects will be emphasized the rise of the Internet and its characteristics, the business logic that is emerging from this, consumers on the Internet and new communication patterns. New to not only luxury consumption, but also retailing and consumption is the entrance of the Internet as a means of distributing, marketing and gaining information on goods and services. The advent of the Internet brought with it a frenzy for no-name and generic brands, as well as some high-priced, status brands to not be left behind in incorporating a clicks environment, with many luxury brands jumping on the bandwagon. Many luxury brands can thus now be viewed and, to some extent, purchased online by anyone having access to a computer. Luxury brands are presenting themselves online and communicating everything from designer influences to products and prices and store listings. On the Internet, old trusted methods cannot be used to the same extent and the migration to an online environment will inevitably bring with it new problems as well as intensify some old ones: the perception of scarcity is harder to create. Maintaining the balance between maximizing profits and evoking feelings of exclusivity is one of the most important tasks for luxury brands. The creation of perception of exclusivity or social desirability in a luxury context is the basis for non-functional demand. This is a balancing act that comes into greater focus with the entrance of the Internet. This research examines the new business logic in the clicks environment from the problems that arise for luxury brands in particular. For mass-producing brands, the clicks environment does not pose the same kind of threat as it does for luxury brands. The cost of marketing could be lowered by using the means provided by the Internet and giving access to products to many new consumers, something that in the case of luxury brands can be a danger. The specific nature of luxury brands and the new business logic on the Internet generate new challenges as well as opportunities. The Internet environment brings with it the fact that luxury brands can be not only consumed but also represented and created in a widely diverse environment. This requires a specific way of viewing consumption, which will be explored in this chapter Representing, creating and consuming luxury brands online The luxury context has been changed with the entrance of the Internet, challenging luxury brand management and forcing luxury brands to act in new ways. Where the borders were previously stricter and the consumption of luxury brands was solely an act between company and consumer and luxury brand identity was communicated from company to consumer, with rather few distractions, the Internet gives rise to many other constellations. The creation of brand image is thus now intertwined and overlapping. For luxury brands to be consumed online by consumers, they have to be represented online. Although the representation can be officially either by the brand or by others, it is when ‘others‘ get involved in luxury brand representation that the preconditions change. The online representation of luxury brands is a basis for luxury brand consumption, but as will be explained later, the consumption taking place online does not have to involve purchase of actual physical goods. Brands can, to a certain degree, be ‘created‘ online as a luxury brand or status brand, all depending on the processes surrounding the brand in question. This research starts with the presumption that the luxury context is changing with the entrance of the Internet and that luxury brands are now exposed to new challenges in which the luxury brand image is more elusive than ever. The Internet has become a valuable communication tool for brands in their endeavor for a favorable and prosperous brand image. However, the belief is that as a communications and distribution channel the Internet has led to changes in the market structure as well as changes in producer and consumer roles (Peterson, et. al., 1997; Prahalad et. al., 2000). To be able to be viewed and purchased online would seem an ideal situation if not for the inherent paradoxical nature of the luxury brand. Luxury brands face several challenging problems within the online context. Online rarity The term luxury rests on certain assumed connotations, such as the ‘rarity principle‘, meaning that the rarer the good, the more desired the commodity is (Phau and Prendergast, 2000). With the Internet as a distribution channel, the ‘rarity principle‘ may be lost when the brand can be not only viewed and desired but also consumed by all. According to Dubois and Paternault (1995), the prestige of the brand may be eroded if too many people own it. The possibility of online purchase may give opportunity for the ‘masses‘ to consume these products and the company can maximise its profits and sell even larger amounts, something that would, however, be in sharp contrast with the need of luxury brands to maintain a fragile equilibrium between high exposure and awareness but a controlled level of sales (Roux and Floch, 1996 in Dall‘Olmo Riley and Lacroix, 2003). It is also feared that the possibility of purchasing luxury brand goods online could give greater opportunities for counterfeiters to sell copied merchandise as ‘original‘ merchandise. Studies have shown that price and price discounts are very important factors in online purchasing and when revisiting a website. Luxury brands online thus face problems, largely because they do not compete with low price or price discounts. Consequently, online distribution pro-vides a challenge. How do you make consumers buy the much more expensive genuine product instead of a cheap counterfeit when many of the core elements of the luxury brand are lost online? Another problem is the ever-increasing product range of luxury brands. Because many luxury brands today include all sorts of products, this makes it harder to distinguish counterfeit copies from the original. This is a problem that could devalue the brand and increase the temptation for consumers to buy cheaper ‘knock-offs‘ or counterfeits‘ online. de Chernatony (2002:186) suggests that brand strategists need a new mental model to "develop integrated brands in a digital age which goes beyond the classical and which recognizes the new roles consumers are taking". New roles for consumers are an important fact for luxury brands in that consumers are more involved in creating a buzz for certain brands, engaging in reviewing, discussing and sharing opinions online. The online environment and the challenges to luxury brands that follow show a significant change in the business logic. The new business logic on the Internet, with the consumption of brands instead of actual goods, is problematic for brands in general and for luxury brands in particular. The specific problems regarding luxury brands are seen in relation to the previously described inherently difficult luxury brand paradox. The problems arising from the very scattered Internet context for luxury brands are many, as well as interrelated. Empirical contributions There are four main groupings of websites that have been examined: (1) brand websites, (2) consumer-to-consumer sites, (3) communities and (4) Replica sites and such. (1) The first type of sites is the sites that are officially connected with one brand, multiple brands or a conglomerate. In this category ‘umbrella‘ sites are also included, which can be directly owned by a luxury conglomerate (such as eluxury.com, or sites such as prêt-a-porter.com or yoox.com that sell a wide range of upper-range and luxury brands). (2) The second type of site is the online auction site where consumers sell to consumers, or in some cases, an organized firm conducts the selling. This type of site is not associated with the luxury brand. Although somewhat separate from the community website, this type shares many of the characteristics of the community websites, including being mostly consumer driven and not directly affiliated with a luxury brand. Thus, the auction websites are grouped together with the community websites. (3) The third type of site examined is the community websites. These come in different forms, ranging from sites associated with fashion magazines in which involvement only can occur on an observer or viewer basis to communities discussing all aspects of fashion and luxury to community sites dedicated to identifying the brands celebrities are wearing. The sites that are the online version of fashion magazines can be viewed only with possibilities to receive weekly (sometimes daily) fashion updates and newsletters, include chat possibilities and bulletin boards, and in some cases have limited product sales. (4) The fourth type is the website that sells replicas or counterfeits. In this category sites that rank and review sellers of counterfeit merchandise are included. Conclusions Four themes on the sense of a luxury brand have emerged throughout this research. The themes show how the sense of a luxury brand is created in an online environment. The four themes are luxury history, authenticity, community and paradox. Luxury history refers to the stories (either real or thought up as marketing campaigns) told by luxury brands, as well as the history that is thought up of and shared by consumers of the brand. Authenticity pertains to the need for luxury brands to have authenticity and genuine products in the sense of having reputable and innovative designers to repel counterfeits. Community concerns the different types of community formed online, i.e. communities formed for a particular brand or other common interest. Paradox relates to the inherent problem for luxury brands to create desire and appeal (and hence the power to sell a particular product) while simultaneously giving the perception of uniqueness. Paradox also refers to the contradictory workings online in the creation of a sense of luxury brand. As has been revealed through the empirical data, the online environment for luxury brands is an environment for communication and interaction, an environment that is both lively and active. The online context is comprised of many different elements that are interwoven, making up the platform for luxury brands online. This is seen in not only the different people involved in the online context but in some instances also the changing roles they play and the often multiple activities that they perform. This is because the luxury environment is made up of these sometimes very different yet interlocking elements. Examining the data from different perspectives and by comparing them to previous research on brands, luxury and the Internet the conclusion is that a new and exciting arena for luxury brands and their consumers emerge, an arena that will be referred to as an online fair. The online context is a highly scattered and chaotic environment that exhibits a scope of different characteristics. These characteristics resemble those pertaining to a fair. Definitions of a fair can range from describing the display of farm animals to entertainment and amusement. The common denominator is the key-concepts of display and the people there to see the display or to be amused and entertained. The online fair embodies different actors and activities that will be described together with the special environment of the online fair. The actors that are identified in the online fair are the audiences, the exhibitors and the copycats. The activities performed by these three groups are exhibition and display, sales and trade and entertainment. Finally, the online fair environment is characterized by its globality, openness, accessibility and fuzzy boundaries. As opposed to many bricks-and-mortar fairs, the online fair requires no entrance fees. Neither does it have strict admission controls based on special invitations, as is often the case with luxury fashion shows. The online fair is instead open and accessible to all. The audience in the online fair encompasses various consumer types and how ‘active‘ a consumer or potential consumer is, is not dependent on his or her status as an ‘actual consumer‘. The online audience also serves as reinforcement for consumers with regard to postpurchase feelings. Given that the online fair is open to anyone, there will inevitably be those wishing to profit from someone else. In this context these ‘tricksters‘ would be counterfeit sellers trying to profit from the luxury brand image.
Brand equity, “the marketing effects uniquely attributable to the brand” (Keller, 1993, p. 1), is at the heart of competition in the luxury goods market (Keller, 2009). While firms competing in this segment have come up with sophisticated ways to build brand equity, they are currently challenged by the increasing importance of the internet in consumers’ journeys (Kapferer & Bastien, 2012; Okonkwo, 2009). With online sales of luxury goods showing a twelvefold increase over the past 11 years (D’Arpizio et al., 2014), it is evident that luxury brands have to be present somehow in the digital environment today (Heine & Berghaus, 2014). The strategic purposes, business potentials, and consequences for brand equity of this presence, however, are still largely unexplored and remain a paradoxical topic.
As a luxury brand’s website is the brand’s most valuable digital asset (Heine & Berghaus, 2014) and as there appears to be a consensus that luxury brands can use their websites to present their products in the digital environment, at least for purposes of communication, the question arises which products are most suitable for reinforcing the brand’s image. The roles a luxury brand’s products can play in relation to brand management can be classified between four poles spanning two dimensions, which this research terms ‘accessibility’ and ‘contemporariness’, in relation to Kapferer and Bastien’s (2012) luxury brand architecture map. Empirical evidence of these dimensions is, nevertheless, scarce, and yet no prior research has investigated these product roles in an e-commerce setting.
The current study develops a model to test how an online purchase option and the contemporariness as well as the accessibility of the product assortment offered on the websites of luxury brands affect specific brand equity dimensions of luxury brands. Data of a 2x2x2-online scenario experiment were analyzed, showing that prestige and uniqueness value are non-significantly affected by offering an online purchase option, while functional value increases significantly. Regarding the displayed product assortment, the brand equity dimensions of functionality, prestige, and uniqueness are found to be significantly affected by the inaccessibility of the products, while their contemporariness elicits significant changes in uniqueness value. The study also assesses the mediating role of the brand attributes of availability, price premium, aesthetics, and innovativeness, as well as the moderating role of consumers’ prior brand ownership, for these effects.