Drivers, Constraints & Consequences of Consumer Brand Engagement in the Luxury Fashion Sector Dr. Kate Armstrong
Keywords Engagement: being involved Luxury: Something that is not essential but provides pleasure and comfort Fashion: The prevailing style or custom, as in dress or behavior Retail: The sale of goods or commodities in small quantities directly to consumers. Brands: Unique design, sign, symbol, words, or a combination of these, employed in creating an image that identifies a product and differentiates it from its competitors Consumers: One that consumes, especially one that acquires goods or services for direct use or ownership rather than for resale or use in production and manufacturing. Behaviour: manner of behaving or conducting oneself Introduction The purpose of this chapter is to conceptually explore the drivers and constraints of the Consumer Brand Engagement (CBE) concept in the context of the luxury fashion retail sector, along with identifying the resulting consumer behavioural outcomes for this specific industry genre. Using the theoretical lens of the CBE Scale, a consumer viewpoint is taken in order to gauge an in-depth understanding of engagement during or related to focal brand interactions, through the dimensions of Cognitive Processing, Affection and Activation. The CBE concept is gaining traction in branding academia due to its predictive qualities in determining consumer behavioural outcomes, such as loyalty, and so is considered insightful for luxury fashion management. Little research has been conducted in this discipline utilising the lens of CBE as a conceptual framework. As a result of the extensive review of the literature, the authors propose that the drivers and constraints identified by luxury fashion consumers play a large role in mediating the consequential consumer behavioural outcomes being brand loyalty and customer value, which in turn affects attainment of optimum CBE levels being reached.
Defining Luxury 1
By definition, the term luxury originates from the Latin word luxus, which translates to “extravagant living, luxuriousness and opulence”, (Oxford Latin Dictionary, 1992, p. 599). Nueno and Quelch (1998, p. 62) consider luxus as the “indulgence of the senses, regardless of cost”. While Kapferer (2015, p. 717) argues that luxury does not in fact descend from the Latin lux, meaning light and enlightenment, but rather derives from the word luxatio that translates to “a disruption or an excess of”. Luxury brands are recurrently defined from a product centric point of view in terms of their excellent quality, exclusivity, high transaction value, craftsmanship and distinctiveness (Fionda and Moore, 2009). Yet to date, there is still a lack of clarity amongst authors as to defining the more generic term of luxury and in turn what parameters constitute brands as being luxurious. However, there are a variety of characteristics that the literature does conclude as worthy that this chapter will go on to explore. Jackson (2004) purports that there are four principal categories of luxury goods made up of fashion (couture, ready-to-wear and accessories), perfumes and cosmetics, wines and spirits, and watches and jewellery. This study’s primary focus is on luxury fashion goods, which are composed of apparel, accessories, shoes, handbags, jewellery, watches and perfumes (Vigneron and Johnson, 2004). Luxury as an industry has witnessed steady growth since 1985, so it is therefore not surprising that the sector has expanded its reach into further categories such as luxury automobiles, tourism, home furnishings, hotels, airlines and private banking (Chevalier and Mazzalovo, 2008). The Luxury Marketplace The luxury market has been an increasing source of interest for both academia and marketing industry professionals in recent years. This is largely due to the witnessed steady growth of an industry that overall, including luxury extension segments of automobiles and hospitality, exceeded a staggering €850 billion in 2014, with a healthy global growth of 7% (Bain & Company, 2014). Within this gigantic figure are personal luxury goods, known in this study as luxury fashion goods, which mostly comprise of apparel, accessories, shoes, handbags, jewellery, watches and perfumes. Over the past two decades, this segment has more than tripled, going from €73 billion in 1994 to €223 in 2014, (Bain & 2
Company, 2014). With projections of the personal luxury goods segment expected to reach between €250-€265 billion by 2017 (Bain & Company, 2014), it comes as no surprise that attention is being drawn to identifying who these luxury consumers are and what is motivating them to spend. With regards to customer demographics, Experian Marketing Services (2014), estimate the ratio of luxury consumers as 55% female and 45% male, with the largest age groups of luxury buyers being 25-34 years (20%), 35-44 years (20%) and 45-54 years (18%). While these figures provide thoughtful insights toward target marketing and have aided in the development of sample criteria in this study, it is the growing figures of emergent countries and tourist spending that instils real excitement. This year, the current number of luxury consumers worldwide is thought to be just over 350 million people (Bain & Company, 2015), 130 million of whom are from emerging market countries with Chinese consumers in particular making up more than 30% of global luxury spending. According to Data Monitor (2014) Asia Pacific will continue to be a driving force of luxury expenditure growth with countries such as Indonesia, Vietnam, Thailand and Malaysia expected to propel spending in South East Asia by 76% in the next five years alone. Bearing all of this in mind, there is no doubt that the number of luxury consumers worldwide is significantly rising. In tandem with the evidence of increased expenditure and market growth for personal luxury goods, this in turn means that the sector is witnessing the highest volume of interactions with consumers to date. Due to innovations in technology, today’s modern consumer is more empowered than ever before by virtue of having access to a wealth of online resources that greatly influence their decision-making. In a report by McKinsey & Company (2014), it is calculated that 48% of luxury consumers now research online before buying. This indicates that the ways in which highly informed consumers interact with brands is undergoing change. It is therefore hugely relevant and thus important for brands to examine the nature of these interactions in order to secure retention and loyalty of consumers, especially in light of the high levels of competition seen in the industry at present. 3
Fionda and Moore (2009), suggest that the branding of luxury fashion goods in particular is more complex than other sectors due to the speediness of change i.e. goods being deemed less desirable or dormant towards the end of fashion seasons. It stems from this ideology that Kapferer and Bastien (2009) argue that fashion and luxury are separate concepts not to be confused. Fashion is observed as closely linked to the ebb and flow of time (Tungate, 2004, Okonkwo, 2007), whilst in contrast to this the aim of luxury is timelessness. Bernard Arnault of LVMH however, highlights the importance of luxury brands staying modern and current, suggesting this may even be dubbed fashionable. The luxury CEO maintains that ‘star’ luxury brands, such as Louis Vuitton, must be both old and new at once, honouring their heritage and past while inventing their future simultaneously (Arnault, 2001, p. 122). For the purposes of this study, it is maintained that the two are interlinked and the concept of luxury fashion brands is intact. The academic literature goes on to posit heritage as being a fundamental characteristic of luxury brands (Moore and Birtwistle, 2005, Alleres, 2003, Beverland, 2004). Heritage takes years, even decades to develop and is therefore inimitable, serving as a critical differentiating factor for the brand and thus contributing to the brand identity. Each brand is unique and the concept of identity is crucial to the management of luxury brands, (Kapferer, 1997). Many luxury fashion brands tend to have a long history, (Jackson, 2001), often with roots as small family businesses dating back a hundred years if not more. This adds to the authenticity of a brand and is seen as one of the defining characteristics of luxury brands today. Miller and Mills (2012) correlate with this sentiment by citing ancestral history as an important consideration factor to the discernable luxury consumer. Kapferer and Bastien (2010), claim that in order to remain truly luxurious and avoid confused association with premium brands, luxury brands must remain loyal to their country-of-origin roots and manufacture ‘on home soil’. The same authors in 2009 proposed that in order to truly qualify as luxury, goods must be at least partly handmade. Such facets in turn often lead to a lengthy 4
manufacturing process, a contributing feature resulting in the next proposed characteristic of luxury brands, limited production. Another contributing factor to this luxury characteristic is the often-rare resources and materials used in producing luxury goods, particularly in handbags and accessories, such as exotic animal skins, and in Haute Couture garments, such as highly trained seamstresses (Corbellini and Saviolo, 2009). It has been uncovered that limited production, along with controlled distribution, is fundamentally linked to the maintenance of the brand exclusivity appeal, (Nueno and Quelch, 1998 & Okonkwo, 2007). This element of scarcity further adds to the allure of luxury brands. Building on this, Kapferer and Bastien (2009) also recommend that luxury brands make it difficult for clients to buy products through the creation of obstacles to immediate consumption, concluding that waiting for a luxury product should always be necessary and by doing so adds to the exclusivity factor that luxury consumers thrive on. Further contributing to the exclusivity facet of luxury brands are the high prices incurred by goods in this sector. There is a consensus in the literature that luxury products command premium price tags in comparison to other goods in the same category (Fionda and Moore, 2009). Because high prices act as a barrier to entry this therefore adds to the exclusivity of the luxury brand, as it is not deemed financially accessible to mass audiences. Okonkwo (2007) identifies constant justification of high prices as a defining feature of luxury brands while Arnault (2001), claims luxury brands cannot charge such high prices for simply giving people what they expect, citing that innovation is in fact at the root of premium pricing when it comes to luxury. Kapferer and Bastien (2009) take a more subjective and psychological approach to pricing, arguing that money alone is not adequate in defining luxury brands as by itself monetary value is merely a measure of the buyer’s wealth, not taste. The authors view money as raw material and luxury as the means by which this raw material is converted into a “culturally sophisticated product that is social stratification” (Kapferer and Bastien, 2009, p. 3). It is this conversion process itself, i.e. the choice of luxury good, at the discretion of the owner, which is what makes it personal.
5
On this note, the literature concludes that the concept of luxury is hugely subjective in nature. Unless there is a powerfully personal and hedonistic element present, luxury may be seen as mere snobbery (Kapferer and Bastien, 2009). However, it is undeniable that there is at least an element of snobbery in the consumption of luxury goods, as ultimately the degree of accessibility of these goods is a reflection of the social class level of the consumer (Vickers and Renand, 2003), and is a conspicuous reflection at that. Fionda and Moore (2009) reinforce this sentiment through their identification of luxury by virtue of its function as a status symbol and also as a highly involved consumption experience that strongly corresponds to an individual’s self-concept. To further build on this, Dubois and Duquesne (1993) suggest that consumers use the purchasing of luxury goods as a means to convey an extreme form of expressing their values. The status value associated with luxury brands is a crucial part of the complex, multifaceted social value (Sheth, Newman and Gross, 1991) and is a factor that companies should be observant of as it heavily attributes to consumers’ perception of brands. The following section will explore the various luxury consumer segments and their respective cognitive processes and motivations for decision-making, in line with the brand symbolism theories purported.
New Luxury Dubois and Paternault (1995), identify the aspirational theme of ‘dream’ as a consumer association with the concept of luxury. However, in tandem with the Rarity Principle underlying conspicuous consumption (Veblen, 1899 & Mason, 1981), when luxury goods become overly diffused, i.e. more accessible, they eventually loose their luxury lustre. This in turn proceeds to be detrimental to the dream theme as ability to purchase makes the dream a reality and thus ultimately contributes to its destruction. Returning to the onus on social value, it is clear that the consumer views the now accessible brand as less worthy and not maintaining of its luxury lustre i.e. the brand no longer correlates with how the consumer views themselves or their aspirational view of self. Furthermore, the brand does not represent how the consumer wants others to view them, which may result in dire consequences regarding brand loyalty. Miller and Mills 6
(2012) identify the level of conspicuous consumption and fixation of brand symbolism as new luxury. It is therefore justified to conclude that the brands that most fulfil the needs of new luxury consumers may run the risk of alienating and deterring current clientele, whose needs are very different. The growth of this phenomenon, abbreviated as new luxe luxury, and its consumers has gained traction in recent years due to a myriad of societal, demographic and geographic developmental changes. To these consumers, who are typically younger and make their money sooner (Dubois, Czellar and Laurent, 2005), symbolism ranks higher in importance than aesthetic beauty, (Berry, 1994, Dubois and Laurent, 1996), as trademarks or logos have gradually moved from the insides of goods to the outside in order to be conspicuously displayed for everyone to see. While this calibre of consumer may seem relatively easily satisfied and in turn highly profitable from the outset, Kapferer and Bastien (2009) warn that luxury brands should avoid over reliance on clients with the sole interest of reputed signs of recognition, as their buying behaviour proves to be erratic and unpredictable. The authors claim that these new luxe consumers will simply meander from one symbol or logo to another, showing no consistent loyalty to any one-luxury brand in particular. It can be argued that this is due to their consistent need to conspicuously display their status as an officially established luxury buyer to others, which therefore constrains their confidence to buy products that do not reinforce this external message. Another proposed trait of new luxe consumers that is worrying to luxury brands is impatience, as this genre of clientele does not fully understand or appreciate the necessity of waiting for their luxury purchases. Kapferer (2015) accredits this demanding nature to technological advances, specifically eCommerce where basic expectations of online fashion consumers include services such as worldwide next day delivery. Luxury pure players such as Net-a-Porter and Moda Operandi have greatly contributed to this online movement and indulgence of immediate consumption, with the goal of the latter brand to significantly reduce the waiting period between fashion shows and point of purchase. Such agendas put enormous pressure on managers and are in direct 7
opposition to the luxury fashion principles of hand craftsmanship and limited production (Kapferer and Bastien, 2010, Nueno and Quelch, 1998), thus resulting in shifting dynamics that must be managed efficiently by brands. In addition to managing the aforementioned changes brought forth by new luxe consumers, the luxury fashion sector is simultaneously witnessing changes in the buying behaviour of older luxury consumers, identified by Miller and Mills (2012) as connoisseurs. These consumers are generally individuals of good taste (Kapferer and Bastien, 2009) who have been accustomed to luxury goods for longer periods of time than the previously mentioned new luxe consumers and thus maintain the ability to identify brand products without looking at the label (Han, Nunes and Dreze, 2010). With the plethora of fast fashion powerhouses being at the height of popularity, churning out trends descending from the catwalk at a rapid, unprecedented pace, these wealthy luxury consumers are not hesitating to mix and match luxury with premium, even mass-market brands, such as Zara, in their wardrobes (Cailleuz, Mignot and Kapferer, 2009), as they possess the confidence to select products based on aesthetic appeal, not labels alone. This change in mentality proposes new challenges to luxury brands and adds to the impetus for brands to investigate such transitioning behaviours.
Challenges Faced by Luxury Kapferer (2015) purports two driving forces that result in change within any economic sector being new technology and the evolution of society. As the literature has demonstrated thus far, the luxury sector is no exception to this proposition, with new technology playing a key role in the evolution of consumer behaviour and journey to purchase. Cailleuz, Mignot and Kapferer (2009) however, argue that luxury brands have no place online and should not open e-stores. The same authors propose that luxury brand boutiques should be the epicentre of consumer experience first and foremost, which Okonkwo (2007) accredits as a core reason behind why luxury fashion brands have been more hesitant with the online migration seen across industries globally. While maintenance of in-store experience is hugely important, it would be foolish for 8
luxury brands to ignore the needs of their growing online audiences. Academics often overlook the fact that luxury is ultimately a business sector and like all business sectors, luxury must eventually go where the market is and where the riches are fast growing (Kapferer, 2015). This further reiterates the fact that general marketing literature, and thus practices, are not always as straight forward and applicable when it comes to luxury and that this industry truly presents a unique set of challenges within marketing and branding alike. These challenges must be met with a thorough understanding of consumers needs if brands hope to maintain and increase their success in order to be industry leaders. A third driving force that is especially pertinent to the luxury sector is one of political nature, in the form of emerging countries, the most prominent of which being China. Chinese consumers typically display similar traits to new luxe consumers in the form of startlingly high levels of brand symbolism, aspiring to own whatever is perceived as the most luxurious of all brands. Vickers and Renand (2003) dub this as symbolic interactionism, whereby the desire for goods meets internally generated needs for group membership, selfenhancement, ego identification or role position. Such fickle behaviour as demonstrated by this new era of younger consumers should lead marketers to question the creation and maintenance of lasting engagement with luxury brands. In many ways China epitomizes the present and future challenges faced by the luxury industry (Kapferer, 2015). Due to the aforementioned factors in tandem with other criteria such as globalisation and what will be the inevitable rise of new luxury consumers in future emerging countries, luxury brands need to reassess their relationships, or lack thereof, with consumers in addition to the nature of engagement within these relationships. This, in combination with the fact that luxury is already a growing sector as highlighted in the previous introductory chapter, means that the management of relationships will be more important than ever before. It should therefore be a high priority for luxury brands to have a deep understanding of how to best manage growing relationship dynamics. Brands need to leverage the task of attracting new 9
customers without alienating existing clients (Keller, 2009), in their bid to exploit these new opportunities in order to grow. Additionally, in the face of heightened competition seen in the luxury fashion industry at present, brands must simultaneously focus on weaving tighter relationships with consumers in general (Kapferer and Bastien, 2009). This section has made it clear that market and consumer needs are in a state of evolution. Vickers and Renand (2003) propose that elaboration of the dimensional components of luxury products is becoming increasingly important and with brands now having so many points of contact with consumers, it is largely through marketing communications and management of relationships, that this can be achieved. These brands cannot rest on their laurels waiting for new era, chameleon-like consumers to flock to them (Cailleuz, Mignot and Kapferer 2009). This adds further momentum to the importance of examining the extent and nature of luxury fashion consumers’ interactions with brands, an investigation which this study maintains to be best analysed through the lens of engagement.
The Engagement Construct As a concept, Consumer Brand Engagement (hitherto referred to as CBE), has been postulated to comprehensively reflect the nature of consumers’ interactive relationships with brands (Hollebeek, Glynn and Brodie, 2014), thus making it an ideal lens through which to investigate. With its conceptual roots originating in disciplines such as psychology and sociology (Brodie et al., 2011). CBE has been esteemed by authors as a valid predictor of consumer behavioural outcomes including Customer Value and Brand Loyalty (Hollebeek, 2011a). Such outcomes are highly valuable to retailers and in turn are coveted by luxury fashion brands, further adding to the incentive of utilising CBE as a conceptual framework. Specifically, this research uses the CBE Scale constructed by the authors Hollebeek, Glynn and Brodie (2014), which examines consumers’ cognitive, emotional and behavioural activity during interactions with brands. This scale has been deemed the most appropriate method for investigating luxury consumers’ engagement with brands as it is expected to unearth 10
valuable findings that are multi-dimensional in nature and therefore fitting to explain the typically multi-faceted nature of luxury fashion interactions. As a construct, CBE element has been postulated to comprehensively reflect the nature of consumers’ interactive relationships with brands (Hollebeek, Glynn and Brodie, 2014), thus making it an ideal lens through which to investigate. With its conceptual roots originating in disciplines such as psychology and sociology (Brodie et al., 2011), CBE has been esteemed by authors as a valid predictor of consumer behavioural outcomes including Customer Value and Brand Loyalty (Hollebeek, 2011a). Such outcomes are highly valuable to retailers and in turn are coveted by luxury fashion brands, further adding to the incentive of utilising CBE as a conceptual framework. Specifically, this research uses the CBE Scale constructed by the authors Hollebeek, Glynn and Brodie (2014), which examines consumers’ cognitive, emotional and behavioural activity during interactions with brands. This scale has been deemed the most appropriate method for investigating luxury consumers’ engagement with brands as it is expected to unearth valuable findings that are multi-dimensional in nature and therefore fitting to explain the typically multi-faceted nature of luxury fashion interactions.
The current challenges faced by the luxury fashion industry are by and large brought forth by the surge of new luxury consumers in recent years. These new era luxury consumers impose demanding expectations on brands, as they do not possess an appreciation or comprehension for the founding characteristics on which luxury was built. Additionally, current consumers of luxury brands are also imposing challenges in the form of changes in shopping habits, such as mixing high street or premium brand in their wardrobes. The combination of all these challenges means that brands must strike the right balance of maintaining satisfaction of current clientele whilst simultaneously taking advantage of the opportunities presented by the wave of new consumers.
11
Over the last two decades the general term ‘engagement’ has been utilised across various academic disciplines, including sociology (Jennings and Stoker, 2004), psychology (Achterberg et al. 2003), organizational behaviour (Saks, 2006) and political science (Resnick, 2001). The use of the term in businessorientated literature can be traced back as far as 2001 (Appelbauum, 2001), while marketing specific literature did not begin coining the term until the last decade or so (Patterson, Yu and de Ruyter. 2006, Bowden 2009, Mollen and Wilson 2010 & Hollebeek, 2011b) employing a customer centric narrative, the same position undertaken by this study. This interest by marketing practitioners’ has only emerged relatively recently, due to the beneficial role of engagement as a predictor of consumer behaviour outcomes, such as intent to repurchase and recommend (Appelbauum, 2001), being increasingly expressed. Such outcomes are highly desirable, making engagement a promising medium to analyse an industry such as luxury fashion, where retention of customers is becoming increasingly difficult in the face of high competition. Brodie et al. (2011, p. 258) describe customer engagement as a psychological state occurring as a result of “interactive, co-creative customer experiences with a focal agent/ object”, i.e. a brand. The same author expects consumer engagement will complement academic perspectives in the broader literature of Relationship Management and Service-Dominant logic (Brodie et al. 2011). This is based largely on defining characteristics of the concept, such as interactivity (Gambetti & Graffigna, 2010) and co-creativity (Prahalad and Ramaswamy, 2004). For instance, the specific level of interactivity affecting certain engagement forms is dependent on various factors. These include personal characteristics such as initiative (Achterberg et al., 2003) or motivation (London, Downey and Mace, 2007), which are subject to the consumers’ perceived value gained from particular interactions (Hollebeek, 2013). Another factor is contextual contingencies, which may interact with specific interpersonal characteristics, for example the notion of self-concept oftentimes seen in luxury consumers (Fionda and Moore, 2009). As has been evidenced, the luxury sector is regarded as predominantly hedonic in nature, with its consumers viewing the process as hugely symbolic and conspicuous in consumption (Vickers and Renand, 2003), It is clear that such consumers 12
possess traits of initiative and motivation and so, these defining characteristics of engagement prove to demonstrate the appropriateness of the concept as a means to examine the context of luxury fashion. When examining engagement in a branding context, it is important to note how CBE differs from other branding concepts, such as brand experience. Main facets of CBE are the proactive customer cognitions, emotions and behaviours that are present whereas brand experience presumes responsive natured customers with no motivation present (Brakus, Schmitt and Zarantello, 2009). As literature purports brand luxury being co-created by consumers and brand owners (Tsai, 2005 and Tynan et al, 2010), it is evident that CBE with its motivational facet is the more appropriate choice for exploration. For the purposes of this study, the Hollebeek, Glynn and Brodie (2014, p. 1) definition of CBE is adapted, whereby the authors conceptualise the term as a consumer's “positively valenced brand-related cognitive, emotional and behavioural activity during or related to focal consumer/brand interactions”. While some previous authors present definitions of the engagement concept as a unidimensional behaviour construct (Heath, 2007, Catteeuw, Flynn and Vonderhorst, 2007) the multidimensional CBE approach taken here is deemed more fitting for this examination, due to the multi-faceted nature of luxury consumption (Sheth, Newman and Gross, 1991).
13
Consumer Brand Engagement Consequences As previously stated, a valuable prospect of CBE is seen in its ability to predict consumer behaviour outcomes, most notably brand loyalty. Oliver (1999) states that brand loyalty is a strong internal commitment to repurchase or repatronize a preferred service or product regularly in the future, despite the potential for switching behaviour. This combination of behavioural and attitudinal loyalty (Day, 1969) is seen as a potential consequence of CBE and therefore as a potentially positive relationship between the two. However, Hollebeek (2011a) argues the relationship between CBE and loyalty to be curvilinear in nature, during direct physical interactions, as opposed to positively linear. The author proposes that higher levels of CBE might be conducive to increased brand loyalty outcomes up until a certain point after which CBE in excess of this optimum point, may ultimately prove detrimental to brand loyalty outcomes for specific consumer segments, (Hollebeek, 2011a). The basis for this proposition stems from the psychology education concept of a job and/or study related stress reaction occupational burnout, which occurs as a result of excessive employee (Schaufeli et al, 2002) and/or student (Salanova, Agut and Peiro, 2005) engagement levels. The author purports that a similar rationale may be applicable to the CBE concept, meaning that excessive CBE levels could result in customers feeling stressed, drained or fatigued, which in turn may be potentially detrimental to future behavioural outcomes, including loyalty (Hollebeek, 2011a). It is noted that the particular extent or parameters analogous to such customer feelings might differ across various consumer segments but it is concluded that burnout is most likely to occur amongst highly engaged consumers. The author conceptualises two consumer segments that display such high engagement levels, as ‘Activists’ and ‘Variety Seekers’ (Hollebeek, 2011a). Variety Seekers ultimately tend to deflect from the organisation but are likely to remain in the product or service category, and so are essentially partaking in brand switching. It is therefore arguable that this consumer segment represents similar traits to the previously mentioned new luxe consumers, who display low levels of loyalty with their often erratic, unpredictable behaviour. For these reasons, luxury brands should heed authors’ warnings of this consumer genre, as while they 14
may look highly profitable from the outset (Kapferer and Bastien, 2009), new luxe consumers may not prove valuable in the long run. The Activist segment is perceived to be relatively loyal but also presents similar characteristics to the new luxe genre of consumers. Activists are prone to encountering undue levels of consumer perceived physical and/or emotional fatigue due to their high CBE levels, thus resulting in reduced likelihood to repurchase the brand in question (Hollebeek, 2011a). In the context of luxury, this could perhaps be especially pertinent during the exclusivity strategy deployed by brands that aim to make it difficult for consumers to purchase, by means of limited production (Nueno and Quelch, 1998). This aspect of prolonged waiting may be seen as excessive to the already highly engaged Activists and therefore may decrease their propensity to repurchase the brand in the future. In any event a looming risk for brands, including those in the luxury sector, is the possibility of Activists migrating towards becoming Variety Seekers. In the luxury fashion context this could be seen as Activists switching to more readily available brands, where long waiting lists for products are not a regular occurrence. This leads to the question of what factors prevent luxury consumers from engaging with brands. An additional curvilinear relationship is presented between consumer engagement and Customer Value (CV) for utilitarian and hedonic brands. Holbrook (1994) describes CV as consumers’ perceived net benefits arising from specific brand interactions. Hollebeek (2013) proposes that once again up until a focal optimum point, growing Consumer Engagement generates stronger Customer Value increases for hedonic rather than utilitarian brands. As luxury fashion is regarded as being a highly hedonic and experiential consumption category, these findings indicate that higher engagement levels between consumers and brands will result in a customer base that holds the brands in high regard and therefore favourably. With customer retention viewed as growing increasingly difficult for luxury fashion brands to manage, research regarding the specific motivation or drives for engagement in this context may be extremely valuable, due to the proven positive consequences of this concept. Additionally, the literature continually mentions an optimum level of 15
CBE, whereby the level of engagement and ensuing consequences are only favourable up until a certain point, i.e. the optimum point, and after this point detrimental effects may occur. With the specific context of this study being luxury fashion, an investigation of optimum CBE levels is called for, as there is a gap in the literature.
The Consumer Brand Engagement Scale To probe these identified research gaps, the Hollebeek, Glynn and Brodie (2014) CBE Scale will be utilised as the theoretical lens through which this study’s context of luxury fashion will be investigated. There have been few previous authors who have presented conceptualisation scales of engagement in the past. However, as it has been established that the element of interactivity is a grounding characteristic in the definition of engagement and with luxury fashion consumers being highly engaged, alternative scales such as Sprott, Czellar and Spangenberg’s BESC scale (2009) or Calder, Malthouse and Schadel’s scale of Online Engagement (2009), lack this element and so are therefore not fit for the purposes of this study as they lacks this crucial CBE element. Hollebeek, Glynn and Brodie (2014), present a 10-item scale of CBE comprising of three dimensions; Cognitive Processing, Affection and Activation. It is through these dimensions that the authors assess the level of an individual consumer’s overall involvement in direct interactions with brands. Cognitive Processing alludes to the consumer’s level of immersion or brand-related concentration during specific consumer brand interactions, (Hollebeek, 2011b), therefore revealing the degree of the individual customer’s attentive investment in said interaction. This presents an area for investigation within this study regarding potential factors that may disrupt, or alternatively hone, this brandrelated elaboration of thought processing within a luxury fashion environment. This in turn leads back to the earlier question of determining factors that drive and/or constrain engagement during or related to interactions. Figure 1: CBE Scale 16
(Source: Hollebeek, Glynn and Brodie, 2014)
The second dimension, Affection, regards the degree of a consumer’s ‘brand related affect’ or passion in particular interactions between the consumer and brand, (Hollebeek, Glynn and Brodie, 2014). It is noted that the authors evolve the wording of the title from affect to affection, as the dimension encompasses only the positive, not negative, emotional investment into the interactions. It is expected however, that upon collecting narrative rich data from luxury fashion consumers, constraints of engagement will emerge and will likely be negatively affected in nature. Stemming from this emotional investment comes the propensity for consumers to endure a sense of identification with the brand (Hollebeek, 2011a). This notion of self-brand connection (Escalas, 2004), the extent to which consumers incorporate one or more brands into their selfconcept, is reverberative of the ideology purported by Dubois and Duquesne (1993) regarding luxury consumers conveying an extreme form of expressing values via their consumption of luxury goods. It has been acknowledged that 17
luxury consumption encompasses multi-faceted social and aspirational values within consumers. Hollebeek, Glynn and Brodie (2014) posit self-brand connection as having a positive association with CBE, thus adding further incentive to the use of this scale to analyse the context of luxury fashion. The final dimension, Activation, refers to the amount of time, energy and/or effort spent by consumers in specific interactions with the brand (Hollebeek, Glynn and Brodie, 2014). This descends from the Social Exchange Theory (Blau, 1964) whereby an individual customer can recognize what (s) he contributes in an interaction with a brand as a cost and what (s) he receives in exchange as a reward or benefits. The buyer’s behaviour is then modified as the perceived profit of the exchange, i.e. the difference between the two (Homans, 1958). This perspective correlates with the interactive nature of engagement and so Activation is thus reflective of the behavioural facet of CBE. As this dimension is the most representative of consumer behaviour, it is fair to estimate that consumer behaviour outcomes are likely to occur here. Additionally it may be argued that the concept of burnout is most likely to take place here. In this instance, it could be articulated that the consumer does not ultimately perceive the exchange with the brand as personally profitable, when taking into consideration their high level of CBE and therefore interaction. In the specific context of luxury fashion, this is a concept that requires further investigation. The literature regarding the burnout concept in branding however has only been written about in the context of direct, first hand physical interactions between consumers and brands (Hollebeek, 2011a). Considering the way in which current mass marketing communications present many nonphysical (i.e. digital) brand touch points to consumers, the question arises of how these online interactions, if at all, impact direct offline interactions. Conclusions & Recommendations The first section of the literature review saw working definitions of fashion luxury established and exposed the nature of current challenges faced by the industry at present. The second section of the review went on to examine these challenges through the conceptual lens of CBE, specifically utilising the CBE 18
scale, while the broader concept of engagement was also analysed in order to gain further insights. A core challenge faced by the luxury fashion industry at present is retention of customers. As discussed, this issue has been mainly driven by the influx of new luxe consumers in tandem with the changing shopping habits of older luxury consumers. The resulting effects of such change translates to a potential decrease in loyalty towards brands that cannot be ignored and so, luxury fashion brands must look to reassessing their relationships with consumers. Upon adopting a consumer engagement point of view, individuals are no longer viewed as simply submissive recipients of marketing cues but rather as proactive contributors in value generating and interactive co-creating processes (Hollebeek, 2013). As the review demonstrates, CBE is inextricably linked to Relationship Management, meaning highly valuable insights may be gleaned from the examination of consumers’ direct interactions with brands. As witnessed in the literature, it is evident that authors correlate positive relationships between high CBE levels and positive consumer behavioural outcomes such as brand loyalty and customer value. Specifically, the literature review alludes to the existence of optimum CBE levels that results in the most positive of these consumer behavioural outcomes possible. An investigation of the driving, along with constraining, factors needed to reach this optimum level are absolutely necessary. It is therefore in the interest of this study that the nature of this optimum CBE level be explored. References •
Achterberg, W., Pot, A., Kerkstra, A., Ooms, M., Muller, M. and Ribbe, M. (2003), ‘The Effect of Depression on Social Engagement in Newly Admitted Dutch Nursing Home Residents’, The Gerontologist, 43(2), pp. 213-218.
•
Alleres, D. (2003) Competing Marketing Strategies of Luxury Fashion Companies. New York: Elsevier Butterworth-Heinemann.
•
Appelbaum, A. (2001) The Constant Customer. Available at: http://gmj.gallup.com/content/745/ constant-customer.aspx (Accessed June 10, 2015). 19
•
Bain & Company (2014) ‘Luxury Goods Worldwide Market Study FallWinter 2014: The rise of the borderless consumer’. Available at: http://www.bain.com/publications/articles/luxury-goods-worldwidemarket-study-december-2014.aspx (Accessed: 10 May 2015).
•
Bain & Company (2015) ‘Worldwide Luxury Markets Monitor 2015 Spring Update’. Available at: http://cn.cnstudiodev.com/uploads/document_attachment/attachment/6 82/bain_luxury_study_spring_2015_update.pdf (Accessed 30 May 2015).
•
Berry, C.J. (1994) The Idea of Luxury: A Conceptual and Historical Investigation. Cambridge, MA: Cambridge University Press.
•
Beverland, M. (2004) ‘Uncovering ‘theories-in-use’: Building luxury wine brands’, European Journal of Marketing, 38(4), pp. 446–466.
•
Blau, P. (1964). Exchange and power in social life. New York: Wiley.
•
Bove, L.L. and Johnson, L.W. (2002) ‘Customer trust of and commitment to an individual service worker: Predictors of personal loyalty’, Australasian Marketing Journal, 10(1), pp. 24–35.
•
Bowden, J.L. (2009) ‘The Process of Customer Engagement: A Conceptual Framework’, Journal of Marketing Theory and Practice, 17(1), pp. 63-74.
•
Brakus, J.J., Schmitt, B.H. and Zarantello, L. (2009) ‘Brand Experience: What is it? How is it Measured? Does it Affect Loyalty?’, Journal of Marketing, 73(3), pp. 52-68.
•
Brodie, R.J., Hollebeek, L.D., Ilic, A. and Juric, B. (2011) ‘Customer engagement: Conceptual domain, foundational propositions, and research implications’, Journal of Service Research, 14(3), pp. 252-271.
•
Brun, A. and Castelli, C. (2013) ‘The nature of luxury: a consumer perspective’, International Journal of Retail & Distribution Management, 41(11/12), pp. 823 - 847
•
Cailleux, H., Mignot, C. and Kapferer, J.N. (2009) ‘Is CRM for luxury brands’, Journal of Brand Management, 16(5/6), pp. 406–412.
•
Calder, B.J., Malthouse, E.C. and Schadel, U. (2009) ‘An Experimental Study of the Relationship Between Online Engagement and Advertising Effectiveness’, Journal of Interactive Marketing, 23 (Nov), pp. 321-331.
20
•
Catteeuw, F., Flynn, E. and Vonderhorst, J. (2007), ‘Employee Engagement: Boosting Productivity in Turbulent Times’, Organization Development Journal, 25(2), pp. 151-157.
•
Chevalier, M. and Mazzalovo, G. (2008) Luxury Brand Management: A World of Privilege. Singapore: Wiley and Sons.
•
Coffey, A.J. and Atkinson, P.A. (1999) Making sense of qualitative data. Thousand Oaks, CA: Sage.
•
Corbellini, E. and Saviolo, S. (2009) Managing Fashion and Luxury Companies. Firenze: Rizzoli Etas.
•
Cronin, J.J., Brady, M.K. and Hult, T.M. (2000) ‘Assessing the effects of quality, value, and customer satisfaction on consumer behavioral intentions in service environments’, Journal of Retailing, 76(2), pp. 193– 205.
•
Data Monitor (2014) ‘Global Luxury Retailing | Verdict Sector Report’. Available at: http://www.datamonitor.com/store/Product/?productid=CM00279-013 (Accessed 22 April).
•
Day, G.S., (1969), ‘A Two-Dimensional Concept of Brand Loyalty’, Journal of Advertising Research, 9 (Sept.), pp. 29-35.
•
Denscombe, M. (2010) Ground Rules for Good Social Research, Guidelines for Good Practice. 2nd edn. Berkshire: Open University Press.
•
Dubois, B., Czellar, S. and Laurent, G. (2005) ‘Consumer segments based on attitudes towards luxury: Empirical evidence from twenty countries’, Marketing Letters, 16(2), pp. 115–128.
•
Dubois, B. and Duquesne, P. (1993) ‘The market for luxury goods: Income versus culture’, European Journal of Marketing, 27(1), pp. 35– 44.
•
Dubois, B. and Laurent, G. (1996) ‘The functions of luxury: A situational approach to excursionism’. In: Corfman, K.P. and Lynch, J.G. (1996) Advances in Consumer Research. 23rd edn. Provo, UT. Association for Consumer Research, 23, pp. 470–477.
•
Dubois, B. and Paternault, C. (1995) ‘Observations: Understanding the world of international luxury brands: The ‘dream formula’’, Journal of Advertising Research, 35(4), pp. 69–76.
21
•
Escalas, J.E. (2004) ‘Narrative Processing: Building Consumer Connections to Brands’, Journal of Consumer Psychology, 14(1/2), pp. 168-180.
•
European Commission (2010) European Textbook on Ethics in Research. Luxembourg: Publications Office of the European Union.
•
Experian Marketing Services (2014) ‘Behind the Label: Luxury consumers in a digital world’. Available at: http://www.slideshare.net/ExperianMkt/behind-the-label-luxuryconsumers-in-a-digital-world (Accessed 18 May 2015).
•
Fionda, A.M. and Moore, C.M. (2009) ‘ The anatomy of the luxury fashion brand’, Journal of Brand Management, 16 (5/6), pp. 347-363.
•
Gambetti, R.C. and Graffigna, G. (2010) ‘The concept of engagement: A systematic analysis of the ongoing marketing debate’, International Journal of Market Research, 52 (1), pp. 801–826.
•
Han, Y.J., Nunes, J.C. and Dreze, X. (2010) ‘Signalling status with luxury goods: The role of brand prominence’, Journal of Marketing, 74(July), pp. 15–30.
•
Heath, R. (2007) ‘How Do We Predict Advertising Attention and Engagement?’, University of Bath School of Management Working Paper Series, 09, pp.1-18.
•
Hirschman, E.C. and Holbrook, M.B. (1982) ‘Hedonic consumption: Emerging concepts, methods and propositions’, Journal of Marketing, 46(Summer), pp. 92–101.
•
Holbrook, M.B. (1994) ‘The nature of customer value: An axiology of services in the consumption experiences’, pp. 21-71. In: Rust, R. and Oliver, R.L. (1994) Service Quality: New Directions in Theory and Practice. Thousand Oaks, CA: Sage.
•
Hollebeek, L.D. (2011a) ‘Demystifying customer brand engagement: Exploring the loyalty nexus’, Journal of Marketing Management, 27(7), pp. 785-807.
•
Hollebeek, L.D. (2011b) ‘Exploring customer brand engagement: Definition & themes’, Journal of Strategic Marketing, 19(7), pp. 555-573.
•
Hollebeek, L.D. (2013) ‘The Customer Engagement/Value Interface: An Exploratory Investigation’, Australasian Marketing Journal, 21(1), pp. 1724.
22
•
Hollebeek, L.D., Glynn, M.S. and Brodie, R.J. (2014) ‘CBE in Social media: Conceptualization, Scale Development and Validation’, Journal of Interactive Marketing, 28(2), pp. 149-165.
•
Homans, G.C. (1958) ‘Social behavior as exchange’, American Journal of Sociology, 63, pp. 597–606.
•
Jackson, T. (2002) ‘International Herald Tribune Fashion 2001 – a conference review’, The Journal of Fashion Marketing and Management, 6(4).
•
Jackson, T. (2004) International Retail Marketing. Oxford: Elsevier Butterworth-Heinemann.
•
Jennings, M.K. and Stoker, L. (2004), ‘Social Trust and Civic Engagement across Time and Generations’, Acta Politica, 39(4), pp. 342-379.
•
Kanter, R.M. (1977) Men and women of the corporation. New York: Basic Books.
•
Kapferer, J.N. (1997) ‘Managing luxury brands’, Journal of Brand Management, 4, pp. 251–260.
•
Kapferer, J.N. (2015) ‘The future of luxury: Challenges and opportunities’, Journal of Brand Management, 21, pp. 716-726.
•
Kapferer, J.N. and Bastien, V. (2009) ‘The specificity of luxury management: Turning marketing upside down’, Journal of Brand Management, 16(5), pp. 311-322.
•
Kapferer, J.N. and Bastien, V. (2010) The Luxury Strategy: Break the Rules of Marketing to Build Luxury Brands. London: Kogan-Page.
•
Keller, K.L. (2009) ‘Managing the growth trade-off: Challenges and opportunities in luxury branding’, Journal of Brand Management, 16(5/6), pp. 290–301.
•
London, B., Downey, G. and Mace, S. (2007), ‘Psychological Theories of Educational Engagement: A Multi-Method Approach to Studying Individual Engagement and Institutional Change’, Vanderbilt Law Review, 60(2), pp. 455-481.
•
Mason, R. M. (1981) ‘Conspicuous Consumption — A Study of Exceptional Consumer Behaviour’, Westmead: Gower Publishing Company.
23
•
McKinsey & Company (2014) ‘Luxury shopping in the digital age’. Available at: file:///Users/ambre/Downloads/04%20Luxury%20shopping%20in%20th e%20digital%20age.pdf (Accessed 16 April 2015).
•
Miller, K.W. and Mills, M.K. (2012) ‘Probing brand luxury: A multiple lens approach’, Journal of Brand Management, 20(1), pp. 41-51.
•
Mollen, A. and Wilson, H. (2010) ‘Engagement, Telepresence, and Interactivity in Online Consumer Experience: Reconciling Scholastic and Managerial Perspectives’, Journal of Business Research, 63(9/10), pp. 919-925.
•
Moore, C.M. and Birtwistle, G. (2004) ‘The Burberry business model: Creating an international luxury fashion brand’. International Journal of Retail & Distribution Management, 32(8), pp. 412–422.
•
Nueno, J.L. and Quelch, J. (1998) ‘The mass marketing of luxury’, Business Horizons, 41(6), pp. 61-68.
•
Okonkwo, U. (2007) Luxury Fashion Branding. London: Palgrave MacMillan.
•
Oliver, R. (1999). ‘Whence customer loyalty?’ Journal of Marketing, 63(4), pp. 33–44.
•
Oxford Latin Dictionary (1992). Oxford: Oxford University Press.
•
Patterson, P., Yu, T. and de Ruyter, K. (2006) ‘Understanding Customer Engagement in Services: Advancing Theory, Maintaining Relevance’, ANZMAC 2006 Conference, Brisbane, 4-6 December.
•
Peterson, T. (2007) How to Measure Visitor Engagement, Redux. Available at: http://blog .webanalyticsdemystified.com/weblog/2007/10/how-to-measurevisitorengagement-redux.html (Accessed 12 July 2015).
•
Prahalad, C.K. and Ramaswamy, V. (2004) ‘Co-Creation Experiences: The Next Practice in Value Creation’, Journal of Interactive Marketing, 18(3), pp. 5-14.
•
Resnick, E. (2001), ‘Defining Engagement’, Journal of International Affairs, 54(2), pp. 551-566.
•
Saks, A.M. (2006), ‘Antecedents and Consequences of Employee Engagement’, Journal of Managerial Psychology, 21(7), pp. 600-619.
24
•
Salanova, M., Agut, S. and Peiro, J.M. (2005) ‘Linking organizational resources and work engagement to employee performance and customer loyalty: The mediation of service climate’, Journal of Applied Psychology, 90(6), pp. 1217–1227.
•
Schaufeli, W.B., Martinez, I.M., Pinto, A.M., Salanova, M. and Bakker, A.B. (2002) ‘Burnout and engagement in University students: A crossnational study’, Journal of Cross-Cultural Psychology, 33, pp. 464–481.
•
Sheth, J.N., Newman, B.I. and Gross, B.I. (1991) Consumption Values and Market Choices: Theory and Applications. Cincinnati: Southwestern Publishing Company.
•
Sprott, D., Czellar, S. and Spangenberg, E. (2009) ‘The Importance of a General Measure of Brand Engagement on Market Behaviour: Development and Validation of a Scale’, Journal of Marketing Research, 46(1), pp. 92-104.
•
Tsai, S.P. (2005) ‘Impact of personal orientation on luxury-brand purchase value: An international investigation’, International Journal of Marketing Research, 47(4), pp. 429–454.
•
Tungate, M. (2004) Fashion Brands: Branding Style from Armani to Zara. London: Kogan Page.
•
Tynan, C., McKechnie, S. and Chhuon, C. (2010) ‘Co-creating value for luxury brands’, Journal of Business Research, 63(11), pp. 1156–1163.
•
Veblen, T. (1994) The theory of the leisure class, 1899. London: Penguin Books.
•
Vickers, J.S. and Renand, F. (2003) ‘The marketing of luxury goods: An exploratory study – Three conceptual dimensions’, Journal of Marketing Review, 3(4), pp. 459–478.
•
Vigneron, F. and Johnson, L.W. (2004) ‘Measuring perceptions of brand luxury’, Journal of Brand Management, 11(6): pp. 484-506.
•
Wetlaufer, S. (2001) ‘The perfect paradox of star brands: An interview with Bernard Arnault of LVMH’, Harvard Business Review, 79(9), pp. 117-123.
•
Zeithaml, V.A. (1988) ‘Consumer perceptions of price, quality, and value: A means–end model and synthesis of evidence’, Journal of Marketing, 52(3), pp. 2–21.
25
26