The Influence of Luxury Brands’ Firm Engagement on Customer Engagement on Social Media: An Abstract

Abstract

Unlike non-luxury brands, luxury brands thrive on the principles of rarity associated with a high-quality product, premium pricing, controlled distribution, and personalized communication. Despite such unique characteristics of luxury branding, luxury brand managers lack guidance on how to utilize their social media to engage and influence consumers through the targeted use of social media. Although previous researchers have documented the effect of luxury brands’ social media marketing efforts on customer engagement, most research relies on case studies or self-reported survey data that measure behavioral intentions instead of capturing actual behaviors of the customer. Furthermore, research to date has focused only on a limited number of luxury brands and utilized cross-sectional data collection. Today, big data are available from both firm and consumer activities, making it possible to investigate firm–consumer interactions in social media. Luxury brand managers may benefit from utilizing big data to obtain a more accurate understanding of customer engagement on social media and consequently formulate more effective customer engagement strategies. The purpose of this research is to utilize big data in investigating the impact of a luxury brand’s social media marketing activities on customer engagement. In particular, applying the dual perspective of customer engagement, this research examines the influence of focusing on the entertainment, interaction, trendiness, and customization dimensions of a luxury brand’s social media activities on customer engagement with brand-related social media content. Using big data retrieved from a 60-month period on Twitter (July 2012 to June 2017), this paper analyzes 3.78 million tweets from the top 15 luxury brands with the highest number of Twitter followers. Our results suggest that a luxury firm’s social media engagement to enhance entertainment, interaction, and trendiness pays off in terms of increasing customer engagement with brand-related social media content. An unexpected finding of our analysis is that customization efforts as part of luxury brands’ social media activities did not increase customer engagement with the brands’ social media content. The findings have important implications for the design, delivery, and management of social media marketing for luxury brands to engage customers with social media content.