Social media marketing in luxury brands: A systematic literature review and implications for management research

Elisa Arrigo (Department of Economics, Management and Statistics (DEMS), University of Milan-Bicocca, Milan, Italy)

Management Research Review

ISSN: 2040-8269

Publication date: 18 June 2018

Abstract

Purpose

Digital technologies and social media have improved the connectivity and collaboration between firms and customers in all sectors. However, in the luxury sector, the approach to social media and digital technologies has been slower than in other industries. The purpose of this paper is to review the academic literature on social media marketing in luxury brands to highlight the current state of the art, the addressed key research themes and the implications for management research and practice.

Design/methodology/approach

A systematic literature review of academic research on social media marketing has been conducted to gather, examine and synthetize studies related to luxury brands. By following a review protocol based on both automatic and manual search on the Scopus database, all relevant studies on luxury brands were identified and analyzed.

Findings

A critical conceptualization of social media marketing in luxury brands has been provided and the emerging key research themes have been categorized into four main areas.

Originality/value

Academic literature about social media marketing activities in luxury firms is very limited and existing studies focus only on certain aspects, contexts or single cases. In contrast, the value of this study, for both academics and practitioners, lies in providing, for the first time, a comprehensive and critical systematization of social media marketing academic literature in the field of luxury brands.

Keywords

Citation

Arrigo, E. (2018), "Social media marketing in luxury brands", Management Research Review, Vol. 41 No. 6, pp. 657-679. https://doi.org/10.1108/MRR-04-2017-0134

Download as .RIS

Publisher

:

Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited


1. Introduction

The advent of social media and digital technologies has changed the competitive landscape for firms that quickly acknowledged the increasing relevance of social media platforms for business purposes (Kaplan and Haenlein, 2010, 2011; Safko, 2010; Bruhn et al., 2012; Levy, 2013; Wang and Kim, 2017; Keegan and Rowley, 2017). Social media has been defined as “a group of internet-based applications that build on the ideological and technological foundations of Web 2.0 and that allow the creation and exchange of user-generated content” (Kaplan and Haenlein, 2010, p. 61). Several forms of social media exist such as social networking sites (SNSs), microblogs, content communities, virtual worlds and in all of these different ways, customers and firms share information, insights and experiences.

Several benefits arise in participating on social media for businesses. For example, building brand reputation (Ngai et al., 2015), developing collaborative products (Mangold and Faulds, 2009) and marketing strategies for brand management (Laroche et al., 2013). Social media has surely offered companies new business opportunities but also important dilemmas and challenges (Coulter, 2012; Del Giudice et al., 2013) by providing consumers with much more control, information and power over the marketing process. Customers can generate information and share opinions about a firm’s products and services with a bigger scope and wider influence than was the case previously (Sashi, 2012). The new competitive landscape, where customers and brands are increasingly embedded in social media such as Facebook, Instagram, Twitter and YouTube, is fierce and firms are in a situation in which they co-own their brands and co-define their symbolic meanings with customers (Tynan et al., 2010; Nieto and Santamaría, 2007).

Social media and, in general, the digital domain pose an enormous challenge for luxury firms by questioning the traditional business model. In fact, even though the diffusion and adoption of social media in most industries has been relatively rapid, luxury firms have long been hesitant (Okonkwo, 2010; Kapferer and Bastien, 2012; Chevalier and Gutsatz, 2012). Only in recent years, the luxury sector has approached social media to meet the increasing pervasiveness of social networks and communities in customers’ lives (Arrigo, 2014b). Luxury brand lifecycles have become shorter and the growing relevance in the luxury market of young customers who use social media has forced traditional luxury firms to develop innovative strategies to stay relevant in this dynamic and volatile market (Ko et al., 2016). Luxury firms need to develop a clear understanding of what social media could do for them, and define a clear strategy to improve customers’ experience and perceptions of their brands on social media (Phan et al., 2011).

However, academic research examining the role of social media in luxury firms has received little attention and remains largely unexplored. To date, there has been no effort to review systematically and synthesize existing studies on the marketing potential of social media for luxury brands. Often, the few existing studies on this topic are focused on a particular aspect of social media activities (Kim and Ko, 2010; Hughes et al., 2016; Godey et al., 2016), a specific context of analysis (Stokinger and Ozuem, 2014, 2016) or single company cases (Phan et al., 2011; Ng, 2014). Thus, a research gap emerges on the state of the art in the domain of social media marketing studies addressed at luxury brands.

The present research aims to fill this gap by providing a systematic literature review (Webster and Watson, 2002; Kitchenham et al., 2009) of social media marketing studies in the field of luxury brands to highlight the addressed key research themes and suggest further research developments. The contribution of this study is, therefore, to offer, for the first time, a comprehensive understanding and overview of social media marketing in luxury brands, and to map those research themes already addressed for academics wanting to develop new research studies in this domain.

The remainder of the paper is organized as follows: Section 2 provides the background on social media marketing and the evolution of luxury brands’ presence in the digital domain; Section 3 describes the research methodology used to realize this systematic literature review; Section 4 contains the synthesis of data extraction; Section 5 provides the results and discussion on the highlighted research themes. Finally, Section 6 draws conclusions, managerial and theoretical implications for management research with possible future research directions and limitations.

2. Theoretical background

2.1 Social media marketing

Social media refers to the concept of Web 2.0 that involves the collection of open-source, interactive and user controlled online applications that can help users to share their experiences as participants in business and social processes. Web 2.0 applications support the creation of informal users’ networks and the diffusion of user-generated content that facilitate the flow of information and knowledge (Constantinides and Fountain, 2008; Carayannis, 2010).

In the managerial academic literature, social media has been recognized as an important channel to reach the market for business purposes (Mangold and Faulds, 2009; Kaplan and Haenlein, 2010; Bruhn et al., 2012; Sashi, 2012; Risius and Beck, 2015; Lamberton and Stephen, 2016). Social media allows firms to achieve many goals that go beyond simply having a direct relationship with customers. For example, these include recognition of new business opportunities, delivery of commercial and institutional content, collection of customer feedback and the creation of communities (Michaelidou et al., 2011; Berthon et al., 2012).

The huge amount of social media data such as customers’ personal data, available market offers and customers’ opinions represent a valuable source of information to drive marketing decisions (Hoffman and Fodor, 2010; Coulter, 2012). By monitoring social media sites, firms can obtain a multifaceted vision of the market and a clear understanding of current or potential inside issues (Arrigo, 2014a, 2016).

Social media can play a useful role in developing strong market knowledge (Bharati et al., 2015) as the information and data required to deal with competitive challenges have been quickly relocated from published and proprietary sources to open social platforms. Through a continuous scanning process of social media, data collection on customers’ lifestyles, needs and problems encountered with existing products can take place at any moment (Chua and Banerjee, 2013; Stone and Woodcock, 2014). Additionally, social media analytics has proven to provide practical solutions to support management decisions (Risius and Beck, 2015). With this aim in mind, Peters et al. (2013) have recently proposed a framework for managing social media by designing a social media metrics system appropriate for individual firms through the construction of a sensitive social media dashboard.

Social media represents for businesses also an efficient channel to display commercial and institutional communications to the extent that it is even considered a hybrid element of the promotion mix. In fact, it connects aspects of the traditional marketing communication mix to a “highly magnified form of word-of-mouth” among customers where firms cannot manage either the content or the frequency of this communication (Mangold and Faulds, 2009). In the social media environment, the customer posts opinions and questions about a firm’s offer and other customers answer and comment. Consequently, in itself, the customer becomes a vehicle of information toward other customers, and firms need to engage with their customers to successfully exploit these new forms of marketing communication (Brondoni, 2006).

Moreover, on social media, firms can improve the customer engagement “by providing superior value than competitors to build trust and commitment in long-term relationships” (Sashi, 2012, p. 260) but also by actively interacting and collaborating with customers in the co-creation process of new products (Gummerus et al., 2012; Hollebeek et al., 2014). According to Piller et al. (2012), customer co-creation can be described as a set of methods that establish an active, creative and social collaboration process between producers and customers in the context of new product development and determine a paradigm shift from a manufacturer-active paradigm to a customer-active one.

Social media provides a useful channel for communicating with customers and obtaining from them data, information or ideas. “Starbucks Ideas,” the social platform where customers can share feedback, represents a good example of customer co-creation based on social media applications (Chua and Banerjee, 2013). Thus, it is possible to argue that through social media, firms can rely on using a co-creation approach to deal with their innovativeness and open innovation purposes (Del Giudice and Della Peruta, 2013). In fact, the context of the internet of things has pushed companies to become more open to new collaborative innovation approaches (Shin et al., 2017) where customers are considered not just the final buyers of a product but innovation partners, especially inside social media networks (Scuotto et al., 2017b; Scuotto et al., 2017c).

Knowledge management systems are proven to be able to simplify the creation of open and collaborative ecosystems and the exploitation of internal and external flows of knowledge, through the development of internal knowledge management capacity, which in turn increases innovation capacity (Santoro et al., 2017). Moreover, social media platforms have delivered new ways of sharing knowledge and communicating inside organizations where specific factors drive and hamper the employees’ participation (Vuori and Okkonen, 2012; Razmerita et al., 2016). In fact, in the current competitive environment, knowledge management can explain the existing connection between firm-level competitive advantage and difficult-to-use knowledge assets (Carayannis et al., 2017).

As well as using social media for innovation and knowledge purposes, the marketing relevance of social media for companies lies precisely in the interaction between consumers and the community, and in immediate, interactive and low-cost communications (Kaplan and Haenlein, 2011). Social media enhances the power of online communities in various ways (Miller et al., 2009; Antonacci et al., 2017). First, social platforms stimulate among users deep relationships that are richer than in the past. Second, they can produce a rapid mobilization of the online community for a specific event such as a business promotion or deal. Moreover, within social media, the knowledge generated by members is aggregated into documents or Web pages that are frequently updated and corrected by other members by deepening the diffusion of news and knowledge about company products or brands.

Because of the multitude of social media available, firms need to choose efficiently how to construct their social presence by using different social media sites and defining in other words what Weinberg and Pehlivan (2011) label as the “social media mix.” Each social media site performs a particular task related to one of the functional blocks identified by Kietzmann et al. (2011) such as, for example, identity, conversations or sharing. By analyzing each block, firms can monitor and understand how social media varies, thereby developing an efficient social media strategy by maximizing the return of their social presence (Kumar and Mirchandani, 2012). In fact, social media management has been recognized as a valuable solution for influencing relational outcomes, as online users can display empathy toward a brand even if they cannot buy a firm’s product (Clark and Melancon, 2013).

Drawing on brand community literature, Laroche et al. (2013) show that brand communities on social media can improve brand trust and loyalty by enhancing customer relationships with the brand, other customers, the firm and its products. These findings are consistent both with previous studies on the positive effect of social media on brand loyalty (Casaló et al., 2010) and with those (Fournier and Avery, 2011) proposing that social media sites are designed to simplify interactions among users not solely for business purposes. This results in customers’ improving their relationships with each other to improve brand loyalty and trust. Thus, social media marketing appears as a very multifaceted field of research and, recently, Keegan and Rowley (2017) have provided interesting insights on its complexity.

2.2 Luxury brands in the digital age

Several definitions of luxury brands have been proposed in the managerial academic literature, most of which refer to elements such as excellence, high transaction value, exclusivity, artisanship and premium price (Fionda and Moore, 2009; Heine, 2010; Chevalier and Mazzalovo, 2012; Kapferer and Valette-Florence, 2016). Luxury brands are considered as a signal of wealth and status and two of the key differences between prestige brands and non-prestige brands center exactly on their uniqueness and scarcity, as, if everyone owned luxury items, then they would not be regarded as prestigious. Keller (2009) argued that, in general, luxury brands face three important trade-offs reflecting the challenges encountered by managers in handling their development over time: exclusivity–accessibility; classic–contemporary images; and acquisition–retention. These paradoxes make the management of luxury brands a complex activity and put pressure on marketing managers to find new evolving strategies that prove to be consistent in the long term.

Luxury has been influenced by the digital revolution in many ways (Kapferer, 2014): digital offers great opportunities to manage omni-channel connections and, considering the increasing rental costs of physical stores in the main capitals of the world, luxury firms try to optimize the synergies between digital and offline. Moreover, digital allows firms to deliver brand content by promoting their heritage and values. However, luxury is more often centered on rarity, scarcity and discretion; thus, full accessibility and availability of content of the digital world seems to contrast with the exclusiveness of luxury brands (Hennings et al., 2012).

At the outset, luxury firms approached the online market with curiosity and skepticism (Okonkwo, 2010) and, in describing this initial reluctance, Kapferer and Bastien (2012) spoke about the “Internet dilemma” for luxury brands in the digital context and Chevalier and Gutsatz (2012) of a “love/hate relationship.” Recently, with the convergence of digital applications and new media such as mobile technology, luxury firms have fully understood the inevitability of developing an online presence (Arrigo, 2014b). In fact, this represents a prerequisite to guarantee online an official brand representation and assure efficient synergy from different channels of communication (Parrott et al., 2015).

Most luxury firms have thus moved beyond questioning the opportunities of having a digital presence and are managing how to create and maintain a digital presence without damaging the essence of luxury brands. However, three main factors are slowing down the integration of digital tools in the luxury sector:

  1. the variety and complexity of digital channels;

  2. the confusion between separate and interactive effects and platforms; and

  3. the perception that luxury and digital are quite incompatible (Dubois, 2015).

In fact, the wide availability of digital channels and platforms makes it difficult for luxury managers to choose which is best in designing a luxury brand strategy. Furthermore, the customer experience is multisensory (Kapferer and Bastien, 2012), customers expect to feel luxury products through all their senses, and the quality of this experience influences their perceptions of the luxury brand. Digital channels could overcome the absence of physical contact between seller and buyer by preserving the multisensory experience, for example, through touch screen interfaces that increase a tactile interaction with products (Okonkwo, 2016).

In recent years, the rise of social media has brought new challenges for luxury brands, even if, nowadays, the majority have already developed a social media presence to effectively engage with customers (Kontu and Vecchi, 2014). While luxury brands have always been fashion industry leaders, the entry of a number of new fashion brands in the luxury market, due to the trend for affordable luxury, combined with a slowdown in sales, has posed some difficulties (Kim and Ko, 2010). Thus, luxury firms have engaged in social media to increase their brand exposure to a wider segment of the market, to stay relevant to younger customers, to leverage innovation (Choi et al., 2016; Scuotto et al., 2017a) and, fundamentally, to beat the competition and increase sales (Gautam and Sharma, 2017; Kim and Lee, 2017).

However, academic literature on the marketing opportunities for luxury brands related to a strategic use of social media is still underdeveloped and fragmented, the relation existing between social media and luxury remains largely unexplored. Therefore, this study aims at setting out the state of the art of research on social media marketing by luxury brands and mapping the addressed key research themes outlined in the following sections.

3. Research methodology

To analyze social media marketing academic literature focused on luxury brands, this study used a systematic literature review approach (Webster and Watson, 2002; Busalim and Hussin, 2016; Osobajo and Moore, 2017) to support theory development and discover research areas that need further investigation. A systematic review refers to a process of identifying, evaluating and interpreting all available research relevant to research questions with the aim of summarizing the evidence about a phenomenon or a method and provide new understanding (Kitchenham et al., 2009). A systematic literature review involves three phases: planning, performing and reporting the review. Each step requires particular activities: identify research questions, establish a review protocol, identify inclusion and exclusion criteria, perform a quality assessment process and extract data and synthesize (Busalim and Hussin, 2016).

The research question of this study was the following:

RQ1.

What are the state of the art and the key research themes addressed in the academic literature on social media marketing pertaining to luxury brands?

A review protocol was set in place to reduce research bias and was characterized in this study by an initial background review of social media marketing and luxury brands. Next, a definition of inclusion and exclusion criteria was useful in selecting publications specifically related to this study. As the review is centered on analyzing the social media marketing policies used by luxury brands, only those publications with available abstracts and full-text, published in English and during the period 2010-2016 were considered. The period 2010-2016 was chosen to provide a full and deep understanding of the evolution of the topic from its initial beginnings until the end of last year.

The search strategy consisted of two stages. First, an automatic stage provided a primary result of studies related to social media marketing. According to Webster and Watson (2002), the search process should not be limited to a specific range of academic journals; therefore, three different online databases (ScienceDirect, Scopus, Thomas Routers Web of Science) were searched to cover a broad range of publications. The three databanks were selected as they can be considered the most pertinent to the business management field.

In March 2017, the Scopus database was searched with the expression “social media marketing” searched under “title,” “abstract” and “keywords.” The first filter provided a score of 483 documents resulting in a time horizon of 2008-2017; publications not in English were excluded which resulted in 476 publications. Subsequently, a second filter “luxury brand” was entered in “title,” “abstract” and “keywords” and 15 results pertaining to the considered time horizon 2010-2016 (Appendix 1) were found. In the ScienceDirect database, by searching “social media marketing” automatically in “title,” “abstract” and “keywords,” 66 results appeared and, by filtering those into English related to luxury brands, only two results emerged (already contained in the Scopus results). A similar situation occurred using the Thomson Router of Web of Science database, where the first search provided 103 results and only one remained after using the other filters (also in this case, the paper was already included in the Scopus results). Consequently, the Scopus database appeared as the most inclusive and 15results were analyzed.

At this point, the second stage (manual stage) of the search strategy occurred. A full text analysis of the results was carried out to exclude those that were not fully pertinent to the study’s research question, two publications were removed and, finally, 13 publications remained. Performing a quality assessment process represented a critical stage in evaluating the quality of these studies and the following three criteria (Busalim and Hussin, 2016) were established:

  1. C1: Is the research methodology described in the study?

  2. C2: Is the data collection method described in the study?

  3. C3: Are the data analysis steps described in the study?

The 13 studies were evaluated according to these three criteria and distinguishing three levels of quality: low, medium and high. For instance, studies that fully satisfy a criterion obtain 2; those partially achieving a criterion obtain 1 and if they do not, zero. The outcomes of the quality assessment are displayed in Figure 1, and the list of evaluation of each study is presented in Appendix 2.

4. Data extraction and synthesis

The data extraction process was realized by carrying out an accurate reading of all the studies and using a research framework structured on the following elements:

  • research theme (the key aim of the study);

  • data collection methods (survey, case study and observation); and

  • methodology (qualitative, quantitative, conceptual and review) as displayed in Table I.

The majority (87 per cent) of studies were articles published in management academic journals, and this can be considered a first signal of good quality, while the remaining publications were book chapters (13 per cent). With regard to a temporal view of the publications, they gradually increased in number from 2010 up to 2016 with a slight decrease in 2013. Likely, there will be an increase in the article output as the research area about digital marketing in luxury brands becomes more significant.

The research methods that have been adopted in the primary studies are displayed in Figure 2; as can be seen, more than one third of studies (39 per cent), in particular surveys, used quantitative methodology. However, it emerged that there was a significant percentage of qualitative studies (31 per cent), followed by reviews (15 per cent) and conceptual papers (15 per cent).

Qualitative studies are mainly based on interviews and secondary sources, which can be explained by the novelty of the topic, together with the exploratory nature of the initial studies aimed at better defining a phenomenon never previously studied.

The research topics developed over the considered period (2010-2016) can be observed in Table I. They centered on studying the influence of social media marketing activities on customer–brand relationships covering the entire time period; in fact, this can be observed since the first paper’s appearance (Kim and Ko, 2010). However, in recent years, studies on social media marketing in luxury brands have seen an evolution. A study aimed at understanding the main digital touch points with customers arose responding to the need for more awareness of available digital opportunities (Heine and Berghaus, 2014). In addition, recently, a new research theme has been introduced, namely, how luxury brands deal with co-created brand images compared to mainstream brands (Hughes et al., 2016).

Therefore, to date, the addressed themes in the academic literature can be categorized into the following four research areas (Figure 3):

  1. examination of the influence of social media marketing on luxury brand equity (Kim and Ko, 2010, 2012; Phan and Park, 2014; Parrott et al., 2015; Godey et al., 2016; Ko et al., 2016);

  2. analysis of the marketing potential of social media for luxury brands in terms of customer engagement and retention (Jin, 2012; Ng, 2014; Dhaoui, 2014; Stokinger and Ozuem, 2014, 2016);

  3. identification of major luxury brand – customer touchpoints (Heine and Berghaus, 2014); and

  4. social media opportunities for co-creation and collaboration with customers (Hughes et al., 2016).

5. Results and discussion

An initial result emerging from the examination of research methods applied in the studies (Figure 2) is that literature reviews represent only 15 per cent of methods used. Therefore, the systematic literature review provided here contributes to fill this apparent research gap.

The four research themes that have been categorized can now undergo deeper analysis.

5.1 Influence of social media marketing on luxury brand equity

The first study on the use of social media from a marketing perspective was that of Kim and Ko (2010) who investigated: the properties of luxury brands’ social media marketing, how each property affects customer relationships (intimacy and trust) and purchase intentions and, finally, whether a relation exists between the customer relationship and purchase intention. The authors used self-administrated questionnaires with visual stimuli of Louis Vuitton’s activity on Facebook and Twitter to gather data from luxury customers in the Seoul area. Five factors arose from the results of the questionnaire characterizing social media marketing: entertainment, customization, interaction, word of mouth and trend.

The study evidenced the effectiveness of social media marketing on both customer relationships and purchase intentions by highlighting a significant relationship between trust and purchase intention. Each property found in the luxury brands’ social media marketing positively influenced customer relationships and purchase intention. In particular, entertainment appeared as the property affecting the variables more than any other does. For this reason, the authors conclude that luxury brands should heavily invest in entertaining their customers on social media by defining every aspect of social media content and activities, such as the provision of customized service, the collection of customer data or simply interactive relationships.

In 2012, the same authors carried out a second study to better identify the attributes of social media marketing activities and analyze, using a structural equation model, the existing relationships according to value equity, relationship equity, brand equity, customer equity and purchase intention. The recognized dimensions of social media marketing activities were as follows:

  • having fun with the Louis Vuitton social media pages (entertainment);

  • sharing opinions and information (interaction);

  • feeling trendy and fashionable (trendiness);

  • using customized service and information search (customization); and

  • finally, customers’ intention to pass on information available on Louis Vuitton’s social media site (word of mouth).

Their findings confirm the significant positive effect of the properties (entertainment, interaction, trendiness, customization and word of mouth) on value equity, relationship equity and brand equity.

Social media activities were found to be able to generate interaction among users, which could lead to word of mouth effects; these effects could then improve the value equity by providing a new kind of value to customers with respect to that offered by traditional marketing media. The authors concluded that, as luxury brands aim to offer customers luxury values, they should exploit social media to enhance their customer relationships.

In 2014, Phan and Park introduced the first special issue on “Social Media Marketing and Luxury Brands” in the Journal of Global Fashion Marketing. To date, it represents the only special issue published on this novel research theme and includes – among other papers (Dhaoui, 2014; Heine and Berghaus, 2014; Ng, 2014) to be discussed later – one exploratory paper containing business examples on the strategic use of social media as a marketing tool by luxury brands (Kontu and Vecchi, 2014).

In 2015, Parrott et al. (2015) carried out a study on the role of luxury brand forums in affecting members’ purchase intentions. By adopting a netnographic approach, the paper attests that informants express some specific features grouped around engagement, involvement, self-concept and self-connection, brand love and hedonic values. However, they present some noticeable dissimilarities, which can be distinguished as active luxury brand advocates and passive brand advocates. Certain members display passive brand advocacy behavior by observing other more active members. On the contrary, self-selected brand advocates promote their preferred luxury brands, post opinions, share information and aim to build a long-term relationship with them. Thus, luxury brands should engage more and more with brand advocates leveraging their support, listening and responding to key influencers.

In 2016, starting from the studies of Kim and Ko (2010, 2012), Godey et al. investigate the social media marketing efforts (SMMEs) of some luxury brands through a quantitative survey targeted customers and followers of four well-established luxury brands that invested heavily in social media activities. The survey was distributed to customers in four countries: China, France, India and Italy. A positive and direct effect of SMMEs on consumer-based brand equity was found with a higher effect on brand image than brand awareness. In addition, an impact on consumer preference, willingness to pay and brand loyalty was verified and some differences were highlighted among the four countries. For instance, in Italy, this impact was similar for both brand image and awareness. In France, it was higher on brand awareness, while in China and India the main influence was on brand image. Finally, this study was the first to show that brand equity acts as a partial mediator of SMMEs; thus, investment in brand equity seems to strengthen customers’ responses toward SMMEs.

Finally, Ko et al. (2016) introduced a special issue of the Journal of Business Research on “Luxury Brand Strategies and Customer Experiences” that contains selected research papers presented at the 2015 Global Fashion Marketing Conference. One of the key addressed topics within this special issue was on the theme of “social media and digital marketing,” demonstrating the relevance and currency of this topic.

5.2 Marketing potential of social media on customer engagement and retention

In 2012, Jin carried out a study to explore the marketing potential of social media for luxury brands by examining the challenges that these brands face on social media in managing their interactive and dynamic relationships with customers. An online survey directed at evaluating customer perceptions and attitudes toward the Facebook page of Louis Vuitton was undertaken. Customer satisfaction with a luxury brand’s Facebook page was found as a good predictor of a positive attitude toward the brand. In fact, brand attitudes following a visit to a luxury brand’s Facebook page represented a positive antecedent of a customer’s willingness to revisit the luxury brand’s social media page, to shop or to gather information about luxury items before making an offline purchase. Thus, social media can be proven to play a key role in creating customer relationships and promoting positive attitudes toward luxury brands.

In 2014, Dhaoui’s study also provided insights into how luxury brands can realize effective social media marketing strategies to improve customer engagement. A content analysis of 52 luxury brands’ Facebook pages was performed to measure some features of social media posts and the customer engagement they generated. The independent variables examined as explanatory of consumer engagement rates were the eight pillars (8 Ps) of luxury brand management: performance, pedigree, paucity, persona, public figures, placement, public relations, and pricing. Each post gathered from the Facebook page of the selected luxury brands was analyzed in terms of the associated pillar and the findings showed certain differences in customer engagement rates depending on which pillar was enacted. More precisely, performance, public figures, placement, public relations and pricing appeared to provoke more consumer feedback. Instead, pedigree, paucity and persona resulted in more consumer recommendations. These findings can help luxury brand managers to understand how to design effective social media marketing strategies to try and guide social media conversations and increase customer engagement.

In this second emerging research theme, three publications have been included as they provide an examination of social media marketing inside a company case study (Coach case study) and a specific context of analysis (the luxury beauty industry). Ng (2014) analyzed the Coach case to investigate the role of social media in relating with customers in China. Adopting the framework of values proposed by Tynan et al. (2010), according to which luxury brands provide customers with different kinds of values (functional, hedonic, symbolic, financial and social values), social media is presented as a tool able to improve these values. In fact, the paper shows how the Coach company used social media to give information and share content, videos and pictures with customers to emphasize the uniqueness and exclusivity of its brand, and it succeeded in strengthening its relationships with Chinese customers.

Finally, Stokinger and Ozuem (2014, 2016) published two chapters in 2014 and 2016 that offer an examination of social media as a convenient tool to support customer retention within the luxury beauty industry. The authors highlight the principal theoretical starting points of academic literature related to social media and customer retention in the luxury beauty industry and conclude by proposing some managerial implications for luxury brand managers.

5.3 Luxury brands – customer touchpoints on social media

A third research theme has been categorized and involves the identification of the main available digital opportunities provided by social media and digital technologies. It is a relevant topic to exploit social media marketing opportunities, as luxury firms firstly need to develop a good understanding of online tools and social media sites to manage them effectively. In particular, Heine and Berghaus (2014) provide a classification of eight digital luxury brand-customer touchpoints by suggesting corresponding working areas for luxury brand managers. These are:

  • luxury brand website (representing the first source in searching for information);

  • search engine optimization (to increase the luxury brand’s website traffic);

  • direct mailing (for customer relationship management purposes);

  • online advertising (for customer acquisition);

  • brand communities (to share content with customers);

  • social campaigns (for storing and sharing content);

  • phone and tablet apps; and

  • e-commerce.

The paper further describes how Lancôme set up its Rose Beauty Community to communicate and interact efficiently with Chinese customers and this community became one of the top online beauty communities in China.

5.4 Social media opportunities for innovation and co-creation

The last emerging research theme pertains to luxury brand co-creation and collaboration with customers. It is labeled “social media opportunities for innovation and co-creation” as, in the author’s opinion, this sub-topic will contain further studies on social media marketing as a source of innovation for luxury firms. Currently, the study of Hughes et al. (2016) reveals the use of storygiving as a co-creation tool and provides guidelines for its successful use by luxury brand managers. The authors define storygiving as “the practice of co-creation of brand stories through consumer-generated content” (p. 358) and explain that it differs from storytelling due to its narrative tone, to educate customers about the brand. Modern customers play an active role in directing the narrative of a brand in various ways, and this has resulted in the advent of storygiving. For instance, a luxury brand can ask customers to share their online brand experiences or to post pictures of their branded items. While storytelling is a marketing tactic simply used to relate brand narratives from a luxury firm’s point of view, user-generated content represents an opportunity to co-create stories changing a brand’s traditional narrative to that of the brand’s community. The case study of Tiffany & Co.’s “What Makes Love True” campaign provides a successful example of the development of storygiving.

Results have shown that the topic of social media marketing in luxury brands is a relatively recent addition to the academic literature. The first study on this specific theme emerged in 2010, and to date there are still only relatively few studies in this area, the majority having an exploratory aim, indicating that it remains an underdeveloped area of research. Thus, the present systematic review has highlighted specific limitations in existing studies focusing specifically on the research themes identified, the questions addressed and the study designs used. The big issues are probably that, as only approximately a third of the studies have adopted a quantitative methodology, there is no opportunity to standardize and generalize these findings.

6. Conclusions and implications for management research and practice

This paper has outlined the state of the art of the academic literature about social media marketing in luxury brands carried out between 2010 and 2016 and has offered a categorization of the key emergent research themes, providing a clear overview on social media marketing studies on luxury brands. The relevance of this study for academics ties in with the increasing significance of social media in the fashion and luxury industry aimed at improving customer relationships and finding new opportunities for innovation and co-creation.

From an academic perspective, the systematic literature review carried out has revealed a limited proliferation of sub-topics, a modest evolution of methods, but a growing interest in this research area. Hopefully, by providing new insights on the way this topic has developed, this paper offers an opportunity to further advance this field, the overall aim being to highlight the potential of social media marketing in enhancing the competitiveness of luxury firms. In identifying the key themes addressed in previous studies, researchers can benefit from this and continue to contribute in meaningful and relevant ways. Although numerous challenges remain, by connecting those theoretical methods used by marketing scholars together with business practices of luxury brands, it is hoped that this may promote future interest in luxury brands’ social media marketing academic research.

The academic contribution of the study is twofold: to begin with, the systematic review conducted on existing research studies contributes to the academic literature on social media marketing by providing a theoretical examination of social media within a specific sector of activity, namely, the luxury industry. Luxury represents one of the most prominent industries worldwide with increasing economic, social and cultural significance; thus, understanding the marketing opportunities pursued by luxury brands within social media could be beneficial for firms pertaining to other industries. Moreover, the study contributes to the luxury brand management academic literature by offering a critical systematization and mapping of existing studies on social media marketing in this field.

Furthermore, by exploring the state of the art of academic research on social media marketing studies in luxury brands, and providing potential further research developments, this research may have real value for both academics and practitioners. Therefore, the analysis of theoretical implications with a research agenda for further investigation, managerial implications and limitations of the research are summarized as follows.

6.1 Theoretical implications

The theoretical implications for management research are broad and many different conceptual development possibilities are available as now delineated.

First, researchers concentrating on the influence of social media marketing on brand equity have often centered on examining the properties and attributes of social media marketing activities. However, little work has directly linked these activities to marketing outcomes. For instance, the properties of social media activities (entertainment, interaction, trendiness, word of mouth and customization) could be further investigated to understand how each element could be managed to maximize the effect on customer–brand relationships. Moreover, customers in other countries apart from Korea (Kim and Ko, 2010, 2012), China, India, Italy and France (Godey et al., 2016) could be involved in studies on social media properties, for example, North America which may provide a broader cross-cultural overview.

Second, despite the opportunities offered by social media for luxury brands, in existing research studies little attention has been paid to the challenges of brand dilution that luxury brands may experience over the long term by being online. Thus, investigating the paradox of exclusivity versus accessibility proposed by Keller (2009) demands further research within social media.

Third, social media has been recognized as an efficient channel in delivering luxury brands’ marketing communications. However, no study has examined which are the most advantageous social media platforms (social networks, micro-blogs, etc.) to obtain the greatest effect for luxury brand management. Therefore, the question remains, which is the best social media platform for luxury brands? In addition, should the content be different when delivered across a variety of social media platforms?

Fourth, with regard to the use of social media to engage and retain customers, additional research could be developed to understand how social media platforms are changing the luxury customer experience. Alternatively, what is the influence of digital technologies in improving the sensory perception of luxury brands online, as customers’ experience of luxury is notoriously multisensory? The effectiveness of digital mobile applications also represents a new research area, relevant to gain a deeper understanding of their impact on customer engagement and retention.

Lastly, the research theme of social media as a source of innovation and user co-creation in luxury appears as the most promising. In fact, luxury brands have always adopted a top-down approach to preserve their status of excellence; however, technology has had a significant impact on this traditional approach. Technology is still one of the main drivers of change and disruption for luxury brands (Kapferer, 2014) and, similarly, the idea of co-creation and collaboration with customers may seem revolutionary. How can luxury brands maintain distance from the mass in the presence of storygiving and product co-creation? What trade-off exists between crowdsourcing and brand value preservation in social media?

These and other questions may provide stimulus for further research on the role of social media marketing in luxury firms, and hopefully, the provided research map could orientate new research studies in this domain.

6.2 Managerial implications

The theoretical results discussed in the previous section may also prove to be useful for luxury managers, who need extensive market knowledge to relate with customers, and social media offers a powerful marketing tool to support them in achieving this goal. Luxury brand managers can gain insights into how to formulate a social media marketing strategy to exploit their brand potential.

All the four research themes offer managerial implications and support luxury managers in playing a more active role to reinforce their brands via digital and social media technologies. Results have highlighted the relevance for luxury brands of creating social media platforms that meet customers’ desires and allow developing a brand attachment. However, contrary to the traditional top-down approach used by luxury brands in customer relationships, luxury brand managers should engage more and more their customers and also be willing to collect new ideas or suggestions from them, following an innovative co-creation approach. Consequently, if luxury managers aim at optimizing the social media presence of their brands, they have to pay attention to the constant evolution of mobile technologies to remain always in touch with customers through mobile applications.

It is highly recommended for managers to carefully define the content of marketing communications on social media by paying attention to the aspects of entertainment, interaction, trendiness, customization and word of mouth (Kim and Ko, 2012). Finally, they should become able to present their luxury brands on social applications using the most effective visual, auditory and tactile sensory effects to effectively communicate the values around their luxury brands.

6.3 Value and limitations of the research

Finally, the value of this paper derives from its uniqueness in providing, for the first time, an extensive overview of current research undertaken on this topic and a critical systematization of the emerging key research sub-topics. Academic literature about social media marketing activities in luxury firms is very limited, thus, the provided systematic literature review contributes to fill this gap.

It is clear the paper has some limitations, in particular its limited scope, which only covers the period from 2010 to 2016. However, this can be accounted for by the relative newness of the subject in the academic marketing literature and the author’s objective of analyzing entire years, which necessarily excluded 2017. In addition, specifically applying the expression, “social media marketing,” as the initial filter to search online databases resulted in a limited number of papers being identified. If the term had been widened to that of “social media,” it is probable there would have been a much larger number of papers found. However, in this case, it would have been impossible to carry out a systematic review of the literature, which contributes to the literature already in existence on management research.

Figures

Quality assessment results

Figure 1.

Quality assessment results

Percentage of research methodologies

Figure 2.

Percentage of research methodologies

Map of the addressed research themes

Figure 3.

Map of the addressed research themes

Data extraction and synthesis of primary studies

Study Year Document type Research theme Collection method Methodology
Survey Case study Observation Conceptual paper Review Qualitative Quantitative
1 2010 Article Social media marketing’s effects on customer relationships and purchase intention Self-administrated questionnaires with visual stimuli Principal component analysis + multiple regression analysis
2 2012 Article Removed
3 2012 Article To identify attributes of social media marketing activities and examine the relationships among those perceived activities, value equity, relationship equity, brand equity, customer equity and purchase intention 400 survey questionnaires Structural equation model
4 2014 Article To explore the marketing potential of social media for luxury brand management Participants’ survey Structural equation model
5 2014 Article To provide luxury marketers with an overview of the major digital luxury brand-consumer touchpoints and corresponding digital working areas Expert survey Lancome case study Case study
6 2014 Article To explore how luxury brands use social media to connect with middle-class customers in China Coach case study Case study
7 2014 Article Presentation of the special issue on social media marketing and luxury brands x
8 2014 Article To investigate the role of luxury brand marketing in driving consumer engagement on social media platforms Observation of 52 luxury brands’ Facebook pages Content analysis
9 2014 Book chapter To provide some insights into how social media impacts the cosmetics industry x
10 2015 Article To review and analyze brand advocacy behavior within luxury brand accessory forums Observational data including blog texts and audience comments for four popular forums Netnographic approach
11 2015 Article Removed
12 2016 Book chapter To explore social media influence on customer rentention in the luxury beauty industry x
13 2016 Article Storygiving as a co-creation tool for luxury brand managers Tiffany case study Case study
14 2016 Article Social media marketing activities’ influence on brand equity creation and consumers’ behavior toward a brand Survey (845 luxury brand consumers) Quantitative survey customers and followers in different countries
15 2016 Article Presentation of the special issue on luxury brand strategies and customer experiences x

Quality assessment

Study Collection method Methodology Description of data analysis Quality assessment
1 1 2 2 5 High
2 REMOVED
3 2 2 2 6 High
4 2 2 2 6 High
5 1 1 1 3 Medium
6 1 1 1 3 Medium
7 0 0 0 0 Low
8 2 2 2 High
9 0 2 2 Low
10 2 1 2 5 High
11 REMOVED
12 2 2 Low
13 1 1 1 3 Medium
14 2 2 2 6 High
15 0 0 0 0 Low

Appendix 1

Primary results

Dhaoui, C. (2014), “An empirical study of luxury Brand marketing effectiveness and its impact on consumer engagement on Facebook”, Journal of Global Fashion Marketing, Vol. 5 No. 3, pp. 209-222. Godey, B., Manthiou, A., Pederzoli, D., Rokka, J., Aiello, G., Donvito, R. and Singh, R. (2016), “Social media marketing efforts of luxury brands: influence on Brand equity and consumer behaviour”, Journal of Business Research, Vol. 69 No. 12, pp. 5833-5841. Heine, K. and Berghaus, B. (2014), “Luxury goes digital: how to tackle the digital luxury brand-consumer touchpoints”, Journal of Global Fashion Marketing, Vol. 5 No. 3, pp. 223-234. Hughes, Ü.M., Bendoni, W.K. and Pehlivan, E. (2016), “Storygiving as a co-creation tool for luxury brands in the age of the internet: a love story by tiffany and thousands of lovers”, Journal of Product & Brand Management, Vol. 25 No. 4, pp. 357-364. Jin, S.-A.A. (2012), “The potential of social media for luxury brand management”, Marketing Intelligence and Planning, Vol. 30 No. 7, pp. 687-699. Kim, A.J. and Ko, E. (2010), “Impacts of luxury fashion brand’s social media marketing on customer relationship and purchase intention”, Journal of Global Fashion Marketing, Vol. 1 No. 3, pp. 164-171. Kim, A.J. and Ko, E. (2012), “Do social media marketing activities enhance customer equity? An empirical study of luxury fashion brand”, Journal of Business Research, Vol. 65 No. 10, pp. 1480-1486. Ko, E., Phau, I. and Aiello, G. (2016), “Luxury Brand strategies and customer experiences: contributions to theory and practice”, Journal of Business Research, Vol. 69 No. 12, pp. 5749-5752. Ng, M. (2014), “Social media and luxury fashion brands in China: the case of Coach”, Journal of Global Fashion Marketing, Vol. 5 No. 3, pp. 251-265. Park, S.-Y. and Yang, Y. (2012), “The effect of celebrity conformity on the purchase intention of celebrity sponsorship brand: the moderating effects of symbolic consumption and face-saving”, Journal of Global Fashion Marketing, Vol. 1 No. 4, pp. 215-229. Parrott, G., Danbury, A. and Kanthavanich, P. (2015), “Online behaviour of luxury fashion brand advocates”, Journal of Fashion Marketing and Management: An International Journal, Vol. 19 No. 4, pp. 360-383. Phan, M. and Park, S.-Y. (2014), “Introduction: social media marketing and luxury brands”, Journal of Global Fashion Marketing, Vol. 5 No. 3, pp. 195-196. Stokinger, E. and Ozuem, W. (2014), “Social media and customer retention: implications for the luxury beauty industry”, Computer-Mediated Marketing Strategies: Social Media and Online Brand Communities, IGI Global, Hershey, PA, pp. 200-222. Stokinger, E. and Ozuem, W. (2016), “The intersection of social media and customer retention in the luxury beauty industry”, Competitive Social Media Marketing Strategies, IGI Global, Hershey, PA, pp. 235-258. Wu, M.-S.S., Chen, C.-H.S. and Nguyen, B. (2015), “Luxury brand purchases and the extended self: a cross-cultural comparison of young female consumers in Taiwan and the UK”, Asia-Pacific Journal of Business Administration, Vol. 7 No. 3, pp. 153-173.

Appendix 2

Table AI

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Corresponding author

Elisa Arrigo can be contacted at: elisa.arrigo@unimib.it

About the author

Elisa Arrigo, PhD, is an Associate Professor of Management at the University of Milan-Bicocca, Department of Economics, Management and Statistics (DEMS), Milan (Italy). She holds a PhD in Marketing and Business Management from the University of Milan-Bicocca, and during her PhD studies, she was a Visiting Scholar at the Stockholm School of Business (Sweden) and London Business School (UK). She teaches marketing and corporate global communication at the University of Milan-Bicocca, and her research interests lie primarily in global business management with a particular reference to luxury and fashion firms. She has published books, book chapters and papers in managerial academic journals based on various aspects of her research topics, and she is an active reviewer for various management journals and conferences.