The end of the world as we know it? The influence of online channels on the luxury customer experience

Luxury brands claim to offer consumers pleasure and prestige and deliver high profits to retailers. While the global demand for luxury goods is increasing, consumers expect that the purchasing process these goods will accommodate their preferences on how, where, and when they want to purchase them. The changing nature of luxury markets and customers' purchasing behavior makes it necessary to understand why customers would choose an online channel to purchase luxury offerings. What are the features that make so appealing, attracting consumers towards them? Our study explores customers' motivations, the benefits and the experiences they are expecting and perceiving from the Online Luxury Experience (OLX). We examine the OLX and establish three corresponding luxury customer segments using online channels to purchase their luxury goods and services: the purists, opportunists, and e-lux. We highlight the differences between the segment's customer journeys and the implications for theory and luxury customer experience management.     

Intra and inter-country comparative effects of symbolic motivations on luxury purchase intentions in emerging markets

Emerging markets, and especially lower-tier cities within these markets, are seen as the future growth engines for luxury brands. However, extant literature on the drivers of luxury consumption has predominantly focused on Tier-1 cities. Grounded in the theory of network effects, this study offers first such intra and inter-country comparison of the symbolic motivations (i.e. snob, bandwagon and Veblen motivations) underpinning luxury purchases between and within Tier-1 and lower-tier cities in two prominent emerging markets, China and India. The findings offer first account of similarities and differences in consumer motivations that drive luxury consumption within and between these markets. While most luxury brands have ubiquitous strategies for emerging markets, the results will assist managers in developing distinctive brand strategies catering to the intra and inter-country differences.     

Understanding the effect of personal and social value on attitude and usage behavior of luxury cosmetic brands

The growth of the luxury market has been phenomenal in recent years, especially in the emerging markets such as India. This research studied luxury value aspects (personal and social) of luxury cosmetic brands and their impact on consumer attitudes and usage behavior, with a focus on women consumers. Data was collected in the form of a survey from 372 women luxury cosmetic users. Structural equation modeling was used to analyze the framework. Hedonism and status value were found to have high significant relationship towards attitude whereas usage behavior was influenced by materialism and status value. Hence the symbolic and psychological traits among consumer will show their willingness to buy and preferences on luxury cosmetic brands. The findings of this study provide valuable insights to marketers and managers to understand consumer trends, attitudes and behavior in the luxury cosmetic market and develop marketing strategies to successfully market their products.     

Consumer values,motivation and purchase intention for luxury goods

There is considerable ambivalence in how different societies and cultures relate to the consumption of luxury goods. Thinly focused in the literature are Islamic societies (with rapidly emerging ‘super-rich’ consumer segments) where the concept of luxury may be in tension with religious values. Set against this background, this paper investigates how consumer values and motivation influence purchase intentions towards luxury goods. Based on a sample of 400 respondents drawn from Morocco and applying logistic regression models, the paper finds correlations between the intention to buy luxury goods, motivation and personal values. Paradoxically, the influence of religion appears to diminish as consumer affordability of luxury goods increase. Partly due to globalization of markets and impacts on consumer values, Moslems are not fundamentally different from western consumers with regard to predispositions towards luxury consumption. Potential impacts of religion on luxury consumption attitudes and personal values appear to be moderated by the global consumer culture. The results also show an important gender underpinning especially when considered alongside perceived gender biases in consumption decision-making in many Islamic countries. Regarding the nature of purchase behavior women were found to be more positively disposed to impulse purchasing of luxury goods compared to men while more educated people, generally, indicated a greater tendency towards rational than impulse buying decisions.     

Online luxury goods with price discount or onsite luxury goods with luxury services: Role of situation-specific thinking styles and socio-demographics

Today, the luxury goods and service market is growing faster than ever. However, despite its growth, we do not know much about the ways in which consumers choose to shop online or in store when buying luxury goods. We also lack insight into the factors that can affect such luxury consumption decisions. The purpose of this study is to investigate whether consumers prefer to buy luxury goods online at a discounted price or would rather buy luxury goods in store with additional luxury services at a cover price. This study also examines the extent to which such decisions can be driven by their situation-specific thinking styles as well as other socio-demographic variables. The results show that participants adopted a rational thinking style when deciding to buy luxury goods online with price discounts. On the other hand, an experiential thinking style was evoked when participants chose to visit a store offering luxury brands and luxury services. In addition to momentary thinking orientations, gender as well as income were found to be relevant to a consumer's choice in a shopping platform when seeking luxury brands. More details about the study's findings and their implications are discussed below.     

Consumer motivation and luxury consumption: Testing moderating effects

Despite the growth of luxury markets during the last decade, luxury brand management is facing tremendous changes and challenges. In previous research, the focus has largely been on the appeal of luxury brands to represent status and prestige. However, this study argues that luxury consumption is highly individualistic and is a means through which consumers pursue personal goals.This research examines the influence of consumer goal attainment (extrinsic and intrinsic) on intention to purchase luxury products (explicitly versus subtly marked). Study 1 examines the moderating role of consumer need for uniqueness. Study 2 examines the moderating role of self-monitoring of expressive behaviour. This research resulted in three major findings. Firstly, this research shows that all respondents were more willing to buy a luxury product when it was subtly marked rather than explicitly marked. Secondly, extrinsically motivated respondents showed a greater preference for the luxury product, irrespective of signal type, than did intrinsically motivated respondents. Thirdly, for the intrinsically motivated respondents, Study 1 showed that individuals whose needs for uniqueness is high are predisposed to inconspicuous consumption. This effect was observed for respondents who were intrinsically motivated, but not for those who were extrinsically motivated. Study 2 demonstrated that low self-monitors were more disposed to inconspicuous consumption. Again, this effect was observed for respondents who were intrinsically motivated, but not for those who were extrinsically motivated. Theoretical and practical implications are discussed.     

The manifestation of luxury value dimensions in brand engagement in self-concept

This research investigates what consumers in democratized luxury markets value when purchasing luxury items. Nonetheless, these consumers have a limited budget and can not always buy luxury items, yet they are drawn back to these luxury brands. Thus, we use brand engagement in self-concept (BESC) to explain the relationship between these consumers and luxury brands within democratized luxury markets. A conceptualized model of three luxury value dimensions (experiential, symbolic, and functional) is proposed, and 488 cases were gathered through a phone survey. The data were analyzed using partial least squares structural equation modeling (PLS-SEM). The results show that the most critical drivers of consumers' luxury purchase intention (LPI) are hedonism, escapism, conspicuousness, quality, and usability in democratized luxury markets. Also, BESC can unify luxury value dimensions into an integrated whole and mediate the relationship between them and LPI.     

The Cinderella moment: Exploring consumers' motivations to engage with renting as collaborative luxury consumption mode

Past literature argued that the purchase of luxury goods is driven by people's motivation to conform or fit into our economic and social system. In this study, the authors focus on a new aspect of consumption, that is, renting instead of purchasing luxury goods, backed by the emerging opportunities of sharing economy platforms. Drawing upon the analysis of spontaneous consumers' online communications (in the form of tweets), this study aims to investigate the motivations to engage with luxury garment renting within a collaborative consumption context. To this end, a series of automatic content analyses, via two studies, were conducted using the tweets posted with respect to the Run the Runway collaborative consumption platform. Results demonstrate consumers' increased willingness to show their social status through renting rather than owning luxurious apparel based on five main motivators (need to wear new clothes for a special event, inspirations created by the products/brands, possibility to explore a new way of consuming luxury goods, need to make more sustainable choices, and to increase the life cycle of each luxury product). The implications of these findings are discussed, while they pave the way for future research in collaborative consumption of luxury retailing.     

Consumers’ Perception and Misperception of Market Leadership and Market Pioneership

Abstract

Ever since Veblen and Simmel, luxury has been synonymous with conspicuous consumption. In this conceptual paper we demonstrate the rise of inconspicuous consumption via a wide-ranging synthesis of the literature. We attribute this rise to the signalling ability of traditional luxury goods being diluted, a preference for not standing out as ostentatious during times of economic hardship, and an increased desire for sophistication and subtlety in design in order to further distinguish oneself for a narrow group of peers. We decouple the constructs of luxury and conspicuousness, which allows us to reconceptualise the signalling quality of brands and the construct of luxury. This also has implications for understanding consumer behaviour practices such as counterfeiting and suggests that consumption trends in emerging markets may take a different path from the past.     

An investigation on the effectiveness of hedonic versus utilitarian message appeals in luxury product communication

This research studies the role of hedonic versus utilitarian message appeals in luxury goods communication, investigating how using one or the other type of message appeal affects product perceived luxuriousness and, in turn, product attitude, and consumers' willingness to buy. This research presents three experiments in which message appeal and brand prominence have been manipulated, while perception of luxuriousness, attitude toward luxury products, willingness to buy them and consumers' conspicuous consumption orientation have been measured. Hedonic, compared with utilitarian, message appeals increase perceived luxuriousness, thereby increasing product attitude and consumers' willingness to buy the product promoted. This effect is particularly likely to occur for consumers with lower levels of conspicuous consumption orientation and for products carrying lowly prominent logos. We extend the literature on luxury communication by studying the effect of hedonic versus utilitarian message appeals on consumers' responses, and the literature on hedonism versus utilitarianism by studying this dichotomy in the context of luxury goods communication. This research suggests that different message appeals used in luxury goods communication produce different effects on consumers' responses and that this differential effectiveness is particularly likely to manifest for certain types of consumers and certain types of luxury products.     

Brand prominence and social status in luxury consumption: A comparison of emerging and mature markets

This research investigated how the use of a prominent versus subtle branding strategy and status consumption affect consumers’ intention to buy luxury products across emerging and mature markets. To this end, an experimental study with consumers in India (emerging market) and the United States (mature market) was conducted. The results suggest that Indian (but not U.S.) consumers with a higher status consumption tendency are more willing to purchase prominently branded luxury products than subtly branded ones. On the other hand, U.S. (but not Indian) consumers with a lower status consumption tendency are more willing to purchase subtly branded luxury products than prominently branded ones. The paper discusses these findings, highlights their contribution to luxury research, and illustrates their practical value for luxury companies interested in targeting mature and emerging markets.     

Segmentation of German Consumers Based on Perceived Dimensions of Luxury Food

Recent trends in the German food sector have shifted and segmented consumer consumption motives toward indulgence, quality, and sustainability. Simultaneously, in Western countries there has been a change in luxury consumption motives, shifting emphasis to hedonism, self-actualization, and quality instead of prestige. These parallel developments give rise to the question of how food is related to luxury. This study investigates the perceived dimensions of luxury food and outlines a number of segmented consumer groups based on these dimensions. By means of principal component and cluster analyes, seven dimensions were revealed, which generated four consumer segments. Six of the perceived dimensions of luxury food correspond to those that are found within general luxury goods and services. Sustainability and authenticity form a further dimension, mirroring new luxury values. In the cluster analysis, two segments can be identified as target groups for classic premium foods, whereby one group is predominated by new luxury values and the other is expected to buy lower-quality food.     

Does Service Employee Arrogance Discourage Sales of Luxury Brands in Emerging Economies?

Upscalex stores selling luxury brands from Western, developed countries are having a strong presence in many emerging markets. However, it is not uncommon to find that the service employees of these stores are arrogant and inhospitable. This article uses a dual attitudes perspective to show how service employee arrogance affects customers’ attitudes and purchase intentions toward luxury brands in emerging markets. Experimental findings show that arrogance produces dual attitudes, with positive implicit attitudes exerting a stronger influence than unfavorable explicit attitudes on purchase intentions. In addition, for customers with high self‐esteem, service employee arrogance has a negative effect on their purchase intentions. In line with the expectation disconfirmation model, when service employees change their arrogant attitudes and subsequently show hospitality, customers also change their expectations. When the improved service exceeds customers’ expectations, their explicit attitudes turn positive and exert a stronger influence on purchase intentions than when service employees are consistently hospitable.     

Consumer insights into luxury goods: Why they shop where they do in a jewelry shopping setting

The question that guides this research concerns why consumers prefer to shop where they do for luxury goods. This study applies Tauber's (1972) motives, as representative of Sheth's (1983) nonfunctional shopping motives for luxury goods purchases. The study examines how well Tauber's motives describe consumers’ shopping motivations at each retail outlet in a jewelry shopping setting. These retail outlets consist of store- and non-store formats. The study identifies motives that are considered most important by consumers and that contribute to their shopping preferences. This study also identifies demographic profiles of jewelry shoppers at each retail outlet. Jewelry shoppers are more influenced by functional motives than nonfunctional motives.     

Local Retail Segmentation Using the CETSCALE

Abstract

The CETSCALE was used to segment a local retail luxury sedan market into pro-import and anti-import groups. Four versions of a newspaper advertisement for both Cadillac and Lexus luxury sedans were tested across these two segments. Non-comparative, weaker indirect comparative, stronger indirect comparative, and direct comparative advertising headlines were used in a between-subjects design. An existing automobile dealership selling both Cadillac and Lexus brands was used as the test sponsor. Results unexpectedly indicate that the pro-import segment favors the hard-hitting direct comparison format significantly less than the anti-import segment, finding it less believable, likable, convincing, and professional, plus more boring.     

Counterfeiting: Friend or Foe of Luxury Brands? An Examination of Chinese Consumers’ Attitudes Toward Counterfeit Luxury Brands

ABSTRACT

While the Chinese luxury industry is enjoying rapid growth, the market for counterfeit luxury brands is growing equally fast. There are contradictory views regarding the role counterfeit luxury brands play in the marketplace. Luxury brand owners denounce counterfeit luxury products for harming the reputation of luxury brands and reducing their profitability. Others believe that the availability of counterfeit luxury products may help increase the brand awareness of luxury names and thereby make authentic products more sought after. In this study, we examine the impact of counterfeit luxury products from the consumers’ standpoint. Specifically, the authors investigate whether and how Chinese consumers with different luxury consumption experiences view counterfeit luxury products differently. The study contributes to a better understanding of Chinese consumers’ attitudes toward counterfeit luxury products and thus helps marketers and policy makers develop more effective strategies for dealing with the issue.     

Ample Consumption Period Available Until Use-by Dates: A Potential Marketing Position for Store Brands

SUMMARY

Store brands, when moving upscale, inevitably relinquish their value for money appeal and therefore require some quality dimension to compete. This article is proposing that the promise of “generous” use-by dates as a surrogate for quality could be considered as a positioning plank to promote store brands as alternatives to manufactured brands. Logit analysis is employed to explain shoppers' perceptions and responses to use-by dates, of products that they regularly buy, and of alternative products that they have never bought before if the use-by dates of their regular items are perceived to be too short.     

Drivers of Brand Extension Success: What Really Matters for Luxury Brands

The use of brand extensions has become fundamental to the business model of most luxury brands. Many traditional luxury brands such as Louis Vuitton or Chanel have expanded into traditional luxury sectors beyond their core business. Some brands such as Armani or Prada even crossed boundaries to nontraditional lifestyle segments to pursue new business opportunities. Given the high practical relevance of brand extensions for luxury brands and the importance to understand the success factors for their extendibility and potential backward effects on the parent brand, surprisingly little research has addressed these issues for luxury brands in comparison to nonluxury brands. The current research reveals extension‐related differences between luxury and nonluxury brands by simultaneously analyzing key dimensions of parent brand value, fit, and extension category involvement on the consumer's attitude toward the brand extension, which in turn influences the postextension image of the parent brand. Results of a structural equation model based on a survey among 492 participants show that the predominant driver of brand extension success for both luxury and nonluxury brands is overall extension fit, followed by the consumer's involvement in the extension category. The influence of functional value of the parent brand on the extension evaluation is more important for nonluxury brands. The hedonic value of the parent brand is found to be of relevance only in case of luxury brands. Moreover, a reciprocal spillover effect between the extension evaluation and the parent brand evaluation is observed. The degree of luxuriousness of the parent brand moderates this relationship. This effect is weaker for luxury brands.     

The Utility of Prestige: Chinese and American Hedonic Ratings of Prestige Goods

ABSTRACT

China is rapidly becoming the most important luxury market in the world (Lung, 2005). The reason for this is not simply due to the market size but also to the Chinese consumer's particular penchant for luxury goods. This study will investigate the differences between U.S. and Chinese consumers based on their hedonic and utilitarian ratings of luxury goods and the relationship that these ratings have with individual and cultural traits, with the expectation that a collectivist background will lead to a more utilitarian view of prestige goods. A sample of more than 600 Chinese and U.S. respondents was analyzed based on the ratings of three prestige goods. The results show that China is rapidly becoming a more individualistic nation and that the expected utilitarian use of prestige goods is confirmed through multiple statistical techniques.