164 A.J. Kim, E. Ko / Journal of Global Fashion Marketing 1-3 (2010) 164-171

Impacts of Luxury Fashion Brands Social Media Marketing on Customer Relationship and Purchase Intention

Angella Jiyoung Kim1)*, Eunju Ko2)

Abstracts

Luxury brands have always been fashion industry leaders, with admirable aesthetic value and innovative yet traditional business management. The brands constantly struggle to secure profits by providing novel value to customers through quality products and services, customer management, retail strategies, and innovative marketing mixes. However, the recent entry of numerous fashion brands in the luxury market coupled with decreased sales related to economic downturns have led to new challenges for luxury firms. Because the luxury fashion business is considered high value-added with guaranteed high profit margins and secure regular customers, the lower sectors have begun to heat up the competition.

To survive the recent unforeseen challenges of heated competition, they have turned toward marketing communication using social media. Social media are the two-way communication platforms that allow users to interact with each other online to share information and opinions. Use of social media sites such as Twitter and Facebook has already expanded to almost every luxury fashion brand and been evaluated as business take-off tools. With the increased use of social media as a means of marketing communication for luxury brands, it has become necessary to empirically analyze the effect of social media marketing (SMM). Thus, the study presented here investigated the effects of this SMM on customer relationships (involving intimacy and trust) and purchase intention.

A preliminary test was conducted in order to draw a sample of a luxury fashion brand for this study. Self-administrated questionnaires with visual stimuli were used to collect data from luxury consumers in the Seoul area. Respondents were restricted to consumers who had purchased any luxury fashion brand item within the previous two years. Among 150 questionnaires distributed, 133 questionnaires were finally employed for statistical analysis.

Principal component analysis using varimax rotation was conducted to figure out the properties of luxury fashion brands SMM. The social media contained five properties: entertainment, customization, interaction, word of mouth, and

1) * Corresponding author: Graduate Student, Dept. of Clothing and Textiles, College of Human Ecology, Yonsei University, Korea,Tel. +82-10-7252-0423, E-mail: ngkim@yonsei.ac.kr

2) Professor, Dept. of Clothing and Textiles, College of Human Ecology, Yonsei University, Korea, E-mail: ejko@yonsei.ac.kr

2010 KAMS. All rights reserved.

trend. Factor loadings ranged from .84 to .52. Cronbachs lay between .80 and .88, demonstrating adequate construct reliability.

Multiple regression analysis was conducted to test the effects of SMM on customer relationship (i.e., intimacy and trust) and purchase intention, as well as relationship between customer relationship (i.e., intimacy and trust) and purchase intention. Results show that entertainment has a significant positive effect on intimacy (=.25, t=3.48, p

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entertainment and communication provided on the sites seems to contribute greatly toward a luxury brands profit.

With the growing interest of luxury fashion brands in providing luxurious value to customers in every way possible, using social media appears to be appropriate for retaining old customers and attracting cross-shoppers. As competition among luxury fashion brands becomes more intense by providing plenty of alternatives to customers, the brands prosperity seems no longer quite so promising. The importance of managing customers as valuable assets cannot be emphasized more. As such, more luxury brands should engage in social media marketing activities to anticipate a positive contribution to the brands by providing new luxury value to customers.

Keywords: Luxury fashion brand, Social media marketing, Customer relationship, Intimacy, Trust, Purchase intention

Twitter Facebook

150 133

.84 .52Cronbachs .

80 .88

=.25, t=3.48, p

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customers. As a means to provide value to their customers in every

way possible, luxury brands have now turned to social media, the two-way communication platforms that allow users to inter-act with each other online to share information and opinions. Use of social media sites such as Twitter and Facebook has already expanded to almost every luxury fashion brand and been evaluated as business take-off tools. Advanced technology has begun to benefit the luxury fashion industry while brands and customers are building and strengthening relationships via the social media sites. Even more, brands are able to introduce themselves and provide information while engaging in a casual interaction with customers. In the beginning, as evident in the brands use of websites and e-commerce, the luxury market showed a passive attitude toward the use of technology and did not believe in its potential to attract customers. Most were resistant because the technology worked against the firms de-sire to control their own brands. However, although the tech-nology is still seen as a threat to luxury brands, it is also inevitable.

With the increased use of social media as a means of mar-keting communication for luxury brands, it has become neces-sary to empirically analyze the effect of social media market-ing (SMM). The purpose here is to define SMM properties and evaluate the impact for luxury brands on customer rela-tionships as well as on purchase intention. Luxury brands en-gage in social media activities mainly to build a strong rela-tionship with their customers and create purchase intention to ensure success in the long run. Therefore, the research pre-sented here studies the impact of luxury fashion brands SMM and details its effects. Moreover, as this study has been carried out at the beginning stage of luxury fashion brands SMM ac-tivities, it is hoped that the results will eventually serve as a guide to managing SMM for the rest of the fashion industry.

2. Literature Review

2.1. Social Media Marketing of Luxury Fashion Brands

Traditional designer houses such as Louis Vuitton are pro-viding live broadcasts of fashion shows on Facebook. Ralph Lauren, Chanel, Donna Karen, and Gucci have worked with Apple to create iPhone applications. Many luxury houses have created their own Twitter accounts or posted themselves on Facebook. Brands and customers are communicating with each other with no restriction in time, place, or medium so that old-fashioned one-way communication is transformed into inter-active two-way direct communication.

Social media are defined as the online applications, plat-forms and media which aim to facilitate interactions, collabo-rations and the sharing of content (Universal Maccann International, 2008). There are a variety of forms, including

weblogs, social blogs, microblogging, wikis, podcasts, pictures, video, rating, and social bookmarking. Two of the most com-monly used among luxury fashion brands are social blogs (e.g., Facebook) and micro-blogs (e.g., Twitter). The Facebook pages of luxury fashion brands provide a variety of contents such as video clips, pictures, and stories. The brands not only expose their PR contents on Facebook, but also designers lives and episodes, which draw attention from customers. On Twitter, users are able to get instant customer service or an-swers to personal questions, and can easily form a community through networking and to exchange opinions as well as information.

According to Miller, Fabian, and Lin (2009), the importance of social media lies in the interaction between consumers and the community, and in the facilitation of immediate, interactive, and low-cost communications. Nowadays, internet communities, blogs, and social networks have become a part of life for most people, so that social media have become alternative communication tools supporting existing relationships and activ-ities in a joyful way that can enrich the users experience. Moreover, increased use of social media provides a platform for nurturing brands and affecting consumers purchase decisions.

Luxury fashion brands actively make use of social media for advertising and marketing. Now that marketing has merged with services as joining of business and advertising, it will continue to align itself with services that users value. The shift to marketing-supported services opens up enormous oppor-tunities for marketers to expose consumers to brand messages and, more important, to interact with them. Commercial mes-sages and interactions with consumers will be partnered with media, events, entertainment, retailers, and digital services of all types. Social media have made it possible to perform in-tegrated marketing activity with much less effort and cost than before. Marketing is a multidimensional process made up from various strategies; however, one of the main goals of any mar-keting strategy is to increase sales and profitability. Thus, this study investigates the effects of this newly introduced market-ing phenomenon: social media.

2.2. Customer Relationships

Relying on a brand itself can no longer guarantee company performance as competition gets tough in the luxury environment. Loyalty toward a certain brand weakens as a va-riety of alternatives are provided to customers. Brands now need to build strong relationships with their existing customers in order to keep them around as long as possible. Intimacy and trust have received extensive exposure in the academic lit-erature on customer relationships in the fashion marketing field. While this study aims to investigate how SMM influen-ces customer relationships and purchase intention, it will focus on intimacy and trust as representative of a customer relation-ship that will eventually contribute to a brands performance.

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Fig. 1. Research model

2.2.1. Intimacy

Intimacy refers to feelings of closeness, connectedness, and bondedness (Sternberg, 1996). It is possible that consumers forge an emotional relationship such as intimacy with a certain brand, and perceptions of intimacy are required before the consumer will make an emotional investment in the brand and develop perceptions of trust (Elliot and Yannopoulou, 2007). Intimacy is a matter of knowledge that accumulates over time (Carroll and Ahuvia, 2006) and lasts longer than other emotional relationships (Sternberg, 1996).

2.2.2 Trust

A degree of tendency to believe in a certain brands ability to perform a promised function can define trust (Chaudhuri and Holbrook, 2001). Trust is considered one of the keys to an enhanced relationship between a consumer and a certain brand, and it has been recognized recently as a core variable of long-term relationships with customers. In order for custom-ers to attain firm and lasting relationships with a brand, trust must first be obtained. As one party trusts another, positive behaviors, such as intention to purchase and recommend, are created (Lau and Lee, 1999). Thus, strong belief in a brand becomes a fundamental element of a customer relationship.

2.3. Purchase Intention

Purchase intention is defined as the consumers possibility of purchasing in the future. Since it is expressed as a customers will to promise certain activity related to future consumption, many studies have employed purchase intention to estimate a brands future profits. Understanding consumers purchasing be-havior is essential to a firm in order to attract and retain its customers (Ko, Kim, and Zhang, 2008). According to previous studies, purchase intention is strongly related to attitude and preference toward a brand or a product (Kim and Ko, 2010; Kim and Lee, 2009). As customer relationship is built on atti-tude toward a brand, purchase intention is expected to be in-fluenced by such relationships.

3. Methods

3.1 Research Questions, Hypotheses, and Proposed Model

According to Samsung Design Net (2009), the use of social media among luxury fashion brands builds friendly affection toward brands and stimulates customers desire for luxury. Because of the recent emergence of the use of SMM among luxury fashion brands, academic work dealing with its effects is rare. However, in light of the luxury industrys growing in-terest in SMM, it has become necessary to empirically inves-tigate those effects. Within a limited body of literature, the

following research questions and hypotheses have been devel-oped: Research Question 1. What are the properties of luxury fashion

brands social media marketing?Research Question 2. How does each property affect customer

relationships (i.e., intimacy and trust) and purchase in-tention?

H1. Social media marketing will have a significant positive in-fluence on customer relationships (i.e., intimacy and trust).

H2. Social media marketing will have a significant positive in-fluence on purchase intention.

Research Question 3. What is the relationship between custom-er relationships (i.e., intimacy and trust) and purchase in-tention?

H3. Customer relationships (i.e., intimacy and trust) will have a significant positive influence on purchase intention.

Figure 1 presents a proposed model for outlining the hy-pothesized relationships among SMM, customer relationships, and purchase intention.

3.2. Preliminary Test, Sampling, and Data Collection

In advance of the final development of survey ques-tionnaires, a preliminary test was conducted among fifteen graduate students majoring in fashion marketing in order to draw a sample of a luxury fashion brand for this study. Participants were asked to list three such brands. After a fre-quency test using SPSS 17.0, Louis Vuitton was mentioned most often and was selected to represent the brands. Louis Vuitton is currently engaging in a variety of social media ac-tivities and is ranked at the top in international luxury brand rankings (e.g., Interbrand, 2008; Millward Brown, 2008).

Data were collected from a convenience sample in the Seoul metropolitan area. Respondents were restricted to consumers who had purchased any luxury fashion brand item within the

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On June 2009, Louis Vuitton created its official account on Facebook called The Art of Travel by Louis Vuitton(www.facebook.com/louisvuitton) as a first among luxury brands. Louis Vuittons Facebook has been visited by 850 thousand people around the world up to now, and it is creating intimacy between the public and brand since its page on Facebook provides exclusive details such as designersdaily lives, preparation for collection, or episodes which are not found on its official webpage. On October 2009, Louis Vuitton attempted service to feed real-time fashion shows on line, and it also

receives real-time feedback from customers by Facebook and Twitter. In addition, Louis Vuitton established official Twittie (http://www.twitter.com/ LouisVuitton_HQ) on Twitter for users to lively exchange information or diverse opinions based on the network created on-line.

Fig. 2. Visual stimulus of Louis Vuittons social media

Factors Items Factor loading Cronbachs

Entertainment

The contents found on Louis Vuittons social media seem interesting.

.82

.88

It is exciting to use Louis Vuittons social media. .73

It is fun to collect information on brands or fashion items through Louis Vuittons social media.

.70

It is easy to kill time using Louis Vuittons social media. .69

Customization

It is possible to search customized information on Louis Vuittons social media.

.79

.87

Louis Vuittons social media provide customized services. .76

Louis Vuittons social media provide lively feed information I am interested in.

.67

It is easy to use Louis Vuittons social media. .63

Louis Vuittons social media can be used anytime, anywhere. .52

Interaction

It is easy to convey my opinion through Louis Vuittons social media. .84

.88

It is possible to exchange opinions or conversation with other users through Louis Vuittons social media.

.73

It is possible to do two-way interaction through Louis Vuittons social media.

.69

It is possible to share information with other users through Louis Vuittons social media

.66

Word of Mouth

I would like to pass out information on brands, products, or services from LVs social media to my friends.

.87

.80

I would like to upload contents from LVs social media on my blog or micro blog.

.72

I would like to share opinions on brands, items, or services acquired from Louis Vuittons social media with my acquaintances.

.70

Trend

It is a leading fashion to use Louis Vuittons social media. .82

.82Contents found on Louis Vuittons social media are up-to-date. .73

Table 1. Factor analysis of social media marketing

previous two years. Self-administrated questionnaires were dis-tributed to 150 customers and, after excluding incomplete an-swers, 133 questionnaires were finally employed for statistical analysis.

3.3. Measurements

The questionnaires consisted of three parts, with the first part measuring the brands SMM activities. In order to do this, a visual stimulus of Louis Vuittons activity on the two most commonly used social media, Facebook and Twitter, was de-veloped (See Figure 2). Participants were asked to review the proposed visual stimulus and answer 25 measurement items, which were developed from previous literature related to luxu-ry fashion brands social media marketing (i.e., Kim, 2010).

The second part of the questionnaire included eight items to measure customer relationship and purchase intention. In this study, customer relationship was to include overall intimacy to-ward a brand (e.g., I am a true fan of this brand, I feel in-timacy toward this brand, I know this brand well), trust (e.g., I have a strong belief in this brand, This brand provides pre-cise service information). Measures were developed from Hennig-Thurau, Gwinner, and Gremler (2002) and Ju and Chung (2002). Items to measure purchase intention were devel-oped from Park, Jeon, and Kwak (2007). All statements were measured by five-point Likert-type scales (1 = Strongly Disagree, 5 = Strongly Agree). The last part measured demo-graphic characteristics of the sample, including age, education, marital status, occupation, average household income, spending on fashion goods, and spending on luxury purchases.

A.J. Kim, E. Ko / Journal of Global Fashion Marketing 1-3 (2010) 164-171 169

Independent variable Dependent variable t-value R2 F

Entertainment

Intimacy

.25 3.48**

.12 3.72**Customization .10 1.47

Interaction .01 .22Word of Mouth .14 1.92*

Trend .05 .75Entertainment

Trust

.34 5.75***

.35 14.18***Customization .13 2.28*

Interaction .07 1.18Word of Mouth .10 1.74

Trend .32 5.30***Entertainment

Purchase intention

.31 4.32***

.24 8.42***Customization .13 1.85

Interaction .25 3.54**Word of Mouth .19 2.65**

Trend .04 .63***p

170 A.J. Kim, E. Ko / Journal of Global Fashion Marketing 1-3 (2010) 164-171

Independent variable Dependent variable t-value R

2 F

IntimacyPurchase intention

-.00 -.01.51 45.55***

Trust .34 4.85***

***p

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