Paper Example on Effects of Social Media Marketing and E-Store on Luxury Brand Exclusivity

Paper Type:  Research paper
Pages:  7
Wordcount:  1722 Words
Date:  2022-07-11


Advancement in technology in the past decades has led to a rise in the social media as a modern marketing tool (Goyal & Subramanian, 2017, p. 46). Businesses are shifting widely from traditional marketing to online marketing, therefore, changing the way consumers and businesses communicate and behave in the market. Social media has allowed easy and instant communication access by the consumers with fewer efforts and has allowed companies to create a meaningful and deeper relationship with their buyers than before (Bowen & Ozuem, 2016, p. 244). Consumers connect with fellow buyers who share similar interests and able to communicate with other companies worldwide. Technological advancement relates to how sellers' market their products. Unlike the traditional way where the internet was not a common tool in our daily lives, in this modern life, every single aspect of our lives can be traced back to internet activity (Latter, Phau, & Marchegiani, 2010, p. 211). With most people shifting online, marketers have decided to market their products online too in an attempt to remain in contact with their prospective customers. However, luxury brands have not been quick to embrace this new marketing platform for their wares. Instead, they have opted to use the online platform as a communication tool with clients rather than a distribution channel to sell.

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The most popular online networking sites include Instagram, Twitter, Pinterest, and Facebook. Facebook, for instance, has over1.57 billion users who access the site daily thereby enabling consumers to connect with each other and with the companies through official company pages; personal profiles and applications build on the site (Phan, Thomas, & Heine, 2012, p. 218). Online platforms allow consumer engagement by connecting with the brand leading to the interaction between the parties. Interaction results in satisfaction hence customer retention that ends up being committed and advocates for the product. Active customer engagement leads to increased trust, satisfaction and brand loyalty. The platforms are effective and able to reach millions of consumers; therefore, promoting the luxury brands (Celik, 2016, p. 439). One of the possible reasons why the platform act as a source of communication is that these brands fear to lose their prestige upon selling online since this would deprive their stores of a potential customer base who would shift online (Keller et al. 2017, p.70).

Although today most people are constantly browsing the internet and shopping online from time to time, luxury brands are still reluctant to sell online since some people state that extensive internet availability could result in dilution of the luxury brands, instead they preferred to use their outlet stores, a move that has raised concern among most people who constantly shop online (Kohli et al. 2015, p.40). Specialists have however encouraged the adoption of social media marketing since the majority of luxury consumer groups those below the age of 35 are active users of the internet.

Aims and Objectives of the Study

The overall aim of the study is to identify the advantages and disadvantages of luxury brands using e-stores. Based on the analysis, the study will then assess whether luxury brands should exploit social media marketing as much as other brands (Godey et al., 2016). The study will focus on the past, present and the future of luxury brands in the digital world.

The research will examine the consumer behavior of modern luxury customers and what they want in assessing whether luxury brands can satisfy their market through online stores. It will assess people's perception of, modern luxury brands and the use of online marketing (Bloomfield et al., 2016, p. 353).

Research Questions

The research questions focus on the effects of social media marketing and e-store on luxury brand exclusivity and brand dilution. The questions are related to luxury brands and how they use online marketing techniques such as e-store and e-retailing. The research questions examine the relationships between online marketing and luxury brands' image (Keller, 2017).

  • How does the modern luxury fashion brand meet the target consumer's needs?
  • What does the modern luxury consumer focus on?
  • How might online marketing affect the exclusivity of the luxury brands?
  • Can e-retailing cause brand dilution of luxury brands?
  • What factors would allow luxury fashion products to thrive in e-retail?


The information required to answer these questions and conduct this research is available online, in some articles and books that are easily accessible. The topic is based on marketing, the field that I specialized. Hence, I have the necessary background skills and knowledge to conduct the study.

The information required can also be gathered through methods including; questionnaires, interviews, observations and even case studies (Finch, 2009). The surveys will involve question designed in forms and presented to the target consumers to gather information. The meetings will include personal interaction with the luxury fashion brand consumers for a better understanding of their attitudes. Through observation method, a specified section of target consumers will be carefully examined to understand their behavioral patterns relating to luxury fashion brands. (Mishra, 2014, p.293).

The problems encountered in information collection include finding the right and responsive participants. This is where responsiveness of the target consumers of luxury fashion brand will matter. Some consumers are hesitant in giving information or not willing at all.

Besides the online books and articles, customer survey and interviews to analyze the customers' attitude towards luxury fashion brands and their online and offline experience to get an idea of the purchase behavior (Adenwala, 2014).

Literature Review

Social Media Marketing and Brand Image

According to Bowen & Ozuem (2016, p. 205), many people spend more of their time on the internet than sleeping or working. Luxury consumers have greatly embraced the use of internet and e-commerce forcing luxury brands to be present online. It has forced many luxury brands to invest in the digital technology since its becoming more accessible to a wide number of clients on a 24/7 basis. Around three-quarters of all the purchases of luxury, commodities are influenced by customer's behavior on digital media even if the sales occur in physical stores. It is noted that 99% of sales on luxury goods whether online or physically is influenced by technology in one way or another (Kim & Ko, 2010, p. 167). Despite various skeptics suggesting that digital media will dilute the brand, most luxury brands have succeeded at least to some degree with social media marketing. The use of social media marketing has led to a decline in marketing budgets resulting in more savings. The marketing budgets of luxury watches in the past were concentrated on magazines where they could advertise the product as highlighted by (Han et al. 2010, p. 19). The costs associated were very high unlike currently where the industry does not spend even half of what was spend before (Sandelowski, 2003, p.315). Every brand of the luxury watches has databases where new customers can be recruited and the existing ones tailored hence easy marketing (Wang et al. 2015, p. 1428). Many watch sellers use Instagram to market their products since the platform attract more consumers with Instagram's budgets significantly lower than advertisements in magazines, billboard, and televisions (Goyal & Subramanian, 2017, p. 44).

The adoption of e-commerce in luxury watches has resulted in high gross margins both relative and absolute. When a customer, for instance, purchases a watch for $10,000, the retailer receives $4,000 because it is as a result of high capital intensity and inventory turnover is low (Kapferer, Bastien, & Dawsonera, 2012, p. 58). The stock remains in the stores for a long time, and also there is a high cost of real estate which is a loss to the company, unlike the online shopping where there are no costs associated with real estate hence more savings. Physical stores also carry small quantities of product collection, unlike the social media where it contains a variety of brands where customers can easily select from them. Social media acts as a cheaper and most effective means for luxury brand sellers to advertise themselves online by building its integrity and appearance since it can reach a wide variety of consumers globally. Most people nowadays are much busy and held up doing business, and they value convenience and accessibility; therefore, the presence of easier and communication tool like the internet is essential to them. Luxury consumers are mostly the wealthy and famous who live idle lifestyles just relaxing and consuming a lot of time and making one to visit the physical store looking for the product is a waste of their leisure time (Wang, Wu, & Dong, 2015, p. 1431). With social media marketing, the Consumers can shop online which is more convenient, less stressful in locating the physical store and saves on time since the client just orders the brand online, and delivery is done in a shorter period Social media, therefore, influences more sales since the rich who were not able to visit the physical stores can now purchase the luxury brands. Luxurious goods and other brands are always associated with scandals and corruptions which affect the industry. Since they are expensive individuals owning the luxuries brands are believed to have looted on public resources to acquire them. For example, various highly ranked government officials in the mainland were taken pictures wearing luxury watches by Omega, Rolex, Cartier or Piaget, with worth thousand dollars (Kim & Ko, 2010, p. 162). It results in harsh criticisms among the citizens since they consider that the officials are misusing tax payer's money in purchasing personal luxury brands. Embracing social media in luxury industry helps to solve and eliminate various crises which occur from time to time because it would promote accessibility for a wide variety of audiences.

Social media marketing provides the basis for brand improvement and getting to know consumer tastes and preferences. Through digital media, the sellers of luxury watches can monitor and analyze consumer conversations thus gaining insights into consumer likes and dislikes (Kim & Ko, 2010, p. 168). It helps to identify buyer's interests, know the product weakness and improve on it leading to more sales. Social media provides information about the customer's age, interests, geographical location, profession and gender, which assists in the improvement of brand marketing techniques (Celik, 2016, p. 440). Online marketing brings better understanding, communication, and engagement with clients hence helping the company to embrace modern, innovative communication and marketing strategies. For example, the revenue of Burberry's digital, for instance, has grown by 14 percent to $528m during Christmas quarter as a result of monitoring customer conversations and making changes (Goyal & Subramanian, 2017, p. 45). Social media marketing reduces uncertainty and risks associated with online buying s...

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