Luxury brands building customer based equity

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Journal of Strategic Marketing
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How luxury brands build customer-based brand
equity through phygital experience
Hyowon Hyun, Jungkun Park, Matthew A. Hawkins & Dongyoup Kim
To cite this article: Hyowon Hyun, Jungkun Park, Matthew A. Hawkins & Dongyoup Kim (2022):
How luxury brands build customer-based brand equity through phygital experience, Journal of
Strategic Marketing, DOI: 10.1080/0965254X.2022.2052937
To link to this article: https://doi.org/10.1080/0965254X.2022.2052937
Published online: 16 Mar 2022.
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How luxury brands build customer-based brand equity
through phygital experience
Hyowon Hyuna
, Jungkun Parka
, Matthew A. Hawkinsb and Dongyoup Kimc
a
School of Business, Hanyang University, Seongdong-gu, Seoul, Korea; b
ICN Business School, CEREFIGE,
University of Lorraine, Nancy, France; c
School of Business, Gachon University, Sujeong-gu, Seongnam, Korea
ABSTRACT
Digitization has significantly impacted the purchasing behavior of
luxury consumers. Now, luxury brands are trying to maximize consumers experiential value through phygital marketing. Considering this
trend, it is crucial to analyze how luxury brand websites are structured
and perceived by consumers. Accordingly, this study investigates how
the attributes of luxury brands websites build customer-based brand
equity (CBBE), satisfaction, and repurchase intention. To examine the
relationship, an online survey was conducted with 422 consumers in
the United States who had previously visited luxury brand official
websites and had previous online shopping experiences. The results
show that emotional appeal, web design, and customer service have a
positive effect on CBBE, which positively influences satisfaction and
repurchase intention. For luxury brands, it is important to not only
increase sales but also to improve brand equity. In this context, this
research verifies the effect of the website attributes of luxury brands on
CBBE.
ARTICLE HISTORY
Received 21 January 2021
Accepted 9 March 2022
KEYWORDS
Luxury website attributes;
phygital experience; luxury
brand; customer-Based
brand equity
Introduction
Despite the struggling economy, there are no signs of slowing down in the luxury sector,
especially considering the dramatic increase in online sales. According to DArpizio et al.
(2021), the size of the global luxury online market in 2020 was USD 56 billion, accounting
for 23% of the entire luxury goods market. In the past, the luxury goods market had
undergone a sluggish digital transition, with over half of buyers categorized as highinvolvement businesses where with sellers are crucial. However,
today, the luxury market is creating a new market trend by using IT solutions designed for
a variety of purposes. Due to this change in the luxury market environment, top luxury
brands including Prada, Gucci, Christian Dior, and LVMH, which had previously pursued
offline sales exclusively, have opened official websites to sell online. The online luxury
market can enhance sales by providing brand experience opportunities to a larger
number of consumers (Okonkwo, 2009). While online sales do not account for
a significant portion of total sales, 78% of all purchases are influenced by online services
(Remy et al., 2015). This signifies that the indirect brand experience in the online environment has an important influence on actual purchases.
CONTACT Dongyoup Kim [email protected]
JOURNAL OF STRATEGIC MARKETING
https://doi.org/10.1080/0965254X.2022.2052937
2022 Informa UK Limited, trading as Taylor & Francis Group
Arora and Sahney (2017) found that consumers are more likely to collect information
on brands through online channels before purchasing, especially when the products are
high-involvement ones, such as luxury goods. Because consumers channel preference
plays an important role in motivating shopping behaviors (Boardman & McCormick, 2018;
Hu & Tracogna, 2020), it is critical to examine the shopping channel preferences of luxury
consumers. Most consumers still prefer shopping offline; however, searching for information via online before purchasing offline has been a growing trend (Petit et al., 2019). In
this environment, the fact that tech-savvy luxury consumers are relatively alienated from
phygital marketing compared to general consumers raises a question about the late
acceptance of phygital marketing in luxury brands where the customer experience is
more important (Batat, 2019).
Phygital is a word combining physical meaning offline space and digital referring to
online space (Grewal et al., 2020). Embracing a phygital strategy has the advantage of
implementing a more delicate and richer customer experience by adding the convenience
of online to the strengths of offline distribution channels (Kim & Sullivan, 2019). Considering
the growth in online luxury shopping, it is essential to analyze how well-structured a luxury
brand website is and how consumers perceive a luxury websites attractiveness.
Additionally, how can phygital marketing be applied to the luxury area in a way that
reinforces the brands luxury perception. The positive effects of phygital shopping experience on factors such as status-seeking and opinion leadership, which form the basis of
luxury perception, are expected to contribute to brand equity (Lawry, 2021).
Reflecting the growing influence of phygital marketing, luxury brands are gradually
expanding the scope of their online marketing efforts (Banik, 2021). For example, in terms
of online and offline integration, luxury brands have begun to parallelize product visualization and explanation of attributes by applying augmented or virtual reality in offline
stores (Batat, 2021; Talukdar & Yu, 2021). Nevertheless, the online customer experience of
luxury brands is still mainly delivered through websites or social network services. For this
reason, the influence of luxury brands physical marketing efforts has been investigated
through online customer experiences on websites or social network services (Godey et al.,
2016; Zollo et al., 2020). Existing studies that have investigated the effect of luxury brands
online marketing efforts on CBBE are artificially limited to the aesthetic perception or
design elements of the website (Kusumasondjaja, 2019; Shen et al., 2016). Restricting the
type of influence that can be formed by the various attributes of a website only to the
aesthetic element hinders the ability of luxury brands to optimize the consumer experience. In this regard, further investigation is required for luxury brands.
The key objectives of this study are, first, to verify the influence of luxury brand website
attributes on the formation of brand awareness and brand loyalty. Second, this study aims
to confirm whether brand awareness and brand loyalty, formed by the positive influence
of website attributes, lead to satisfaction with online purchases and repurchase intentions. Lastly, this study aims to enhance the understanding of the continuously advancing
the online luxury market environment and clarify attributes that can offer an optimal
brand experience tailored to transformed consumer tastes.
This study empirically examines website attributes that can drive consumer preferences in the luxury context. Moreover, this research adds to the current understanding of
customer-based brand equity (CBBE) by developing a model that identifies the relationship among luxury website attributes and CBBE as well as key customer outcomes. The
2 H. HYUN ET AL.
results of this study can be used by luxury retailers to develop appropriate strategies that
meet the needs of affluent online consumers. In addition, luxury brands can establish
website development strategies that enhance brand assets drawing on the findings of
this study. Finally, luxury brand managers can utilize the study results to develop effective
phygital marketing strategies to manage the channel-switching behavior of consumers in
a multi-channel luxury retail environment.
Theoretical background relationship marketing theory and customer
experience
The concept of relationship marketing indicates a relational exchange among the partners surrounding a firm, as well as suppliers and other peripheral business partners
(Morgan & Hunt, 1994). By combining the conceptual model of relationship marketing
with the concept of customer experience, the relationship between a firm and customer,
which was previously limited in the service marketing area, was expanded (Lemon &
Verhoef, 2016). Through this, relationship marketing covers all marketing activities that
build and develop relational exchanges between firms and customers. The customer
experience, defined as the customers response through the offerings and the interactions
at all touchpoints during the purchase journey, encompasses all the brands communication including online marketing efforts (Ahmad & Akbar, 2021). The attributes of all stimuli
perceived by consumers appear as sensory, cognitive, and affective responses. Through
customer engagement, customers not only establish and build trust with the brand but
may also transform into a long-term relationship (Rather & Hollebeek, 2021). As a result,
marketing activities performed in the online context cumulate into brand equity and are
expressed as a continuous behavioral response (Godey et al., 2016).
Literature review
Online brand experience on the brand website
Official brand websites aim to deliver a distinctive experience to customers through
digitizing the functional and emotional elements of products or services (Morrison &
Crane, 2007). In a market environment with a growing emphasis on the online experience,
it is essential that brands have websites regardless of their size or sector (Islam & Rahman,
2017; Vinyals-Mirabent et al., 2019). This is because websites have a wider advertising
scope as compared to other forms of advertising and are, ultimately, a powerful marketing
tool. In recognition of such importance, academic research on online experiences via
websites is vibrant and active (Martnez-Sala et al., 2020; Petit et al., 2019). As such, various
studies have been conducted on effective website attributes. Chenet al. (2010) identified
usability, delivery, trust, convenience, and security as the main variables that derive
website experience. Thereafter, Yang et al. (2020) identified customer services, usability,
fulfillment/reliability, personalization, ease of use, selection, informativeness, experiential
atmosphere, and security/privacy as key variables. Overall, website attributes are closely
related to the formation of positive brand attitudes (Islam et al., 2020), suggesting the
crucial nature of identifying website attributes that can effectively express brands in an
online business environment.
JOURNAL OF STRATEGIC MARKETING 3
Website attributes affect not only brand attitudes, but also revisit intentions (Kim et al.,
2015). Moreover, the e-service qualities of luxury brands, such as informativeness and
convenience, are strongly associated with e-satisfaction (Shen et al., 2016). Thus, online
luxury consumers consider website attributes as important as they affect revisit intents,
brand attitudes, product evaluations, customer satisfaction, and the online service perceptions. Geerts (2013) analyzed the website content of luxury brands and identified four
categories based on three key distinct elements: e-shopping, interactivity, and usability.
Here, e-shopping describes the functional aspects of shopping. Further, Ryu et al. (2021)
explained that luxury brand websites possess high expectations in terms of aesthetics.
Accordingly, based on the existing literature on luxury websites attributes, this study
investigates the influence of brand websites on brand equity by considering the brands
emotional appeal, website design, customer service, and efficiency as key attributes.
Attributes determining website quality of luxury brands
For a website to be successfully launched and operated, it must provide good quality and be
supported by many attributes. Receiving good assessments of these attributes plays an
important role in generating revenue and retaining existing customers. Moreover, the online
market must be constructed with careful combination of attributes because service providers
are not physically present to implement tactics to improve service encounters (Glushko &
Nomorosa, 2013). Additionally, visiting a website does not necessarily lead to a direct purchase
but serves as part of their information gathering process, especially in the luxury sector (Arora
& Sahney, 2017). Zeithaml et al. (2002) laid the groundwork for e-commerce research by
outlining website quality. Since their work, many scholars have explored the influence of
website quality on online shopping behavior (Davis et al., 2008). Website quality is an
important antecedent of the effectiveness of online retailing (Ahmad et al., 2017). It is
determined by web atmospherics, which is everything that a customer can experience on
a website. Well-organized online atmospherics have a positive influence on consumer behavior (Dhaliwal et al., 2020). However, there is not yet a dominant standard for defining good
web atmospherics. Websites should be configured differently according to the characteristics
of the industries and their main target customers. The assessment of website quality is critical
to understanding whether a brand provides the desired information and interaction experience (Loureiro et al., 2018).
Emotional appeal
Emotional appeal refers to an indirect experience created by visiting a website. It directly
influences a consumers attitude toward a brand (Pengnate & Sarathy, 2017). When
consumers have limited brand recognition the emotional appeal can lead to a more
positive attitude, as opposed to rational appeal (Kapoor et al., 2021). In addition,
Kusumasondjaja (2019) found that emotional appeal is an effective way to communicate
the benefits and properties of services to consumers. Moreover, customers emotional
appeal is manifested in various consumer behavioral responses, such as repurchase
intention (Wu et al., 2018). In experiential marketing, that seeks to provide sensual and
pleasurable experiences to consumers (Cleff et al., 2014), the emotional appeal can be
used most effectively. Luo et al. (2011)found that sensual elements of emotional appeal
4 H. HYUN ET AL.
greatly influence the formation of consumer preferences for a brand. Furthermore, an
emotional connection between customers and brands created by the brand experience
can lead to positive brand identification and brand loyalty (Rather & Hollebeek, 2019).
Website design
Khn and Petzer (2018) proposed a positive effect of online cues, such as design and layout, on
consumers affective states. The tangible elements on the SERVQUAL scale refer to the physical
facilities, equipment, and appearance of the staff (Parasuraman et al., 2005). However, in the
web environment of e-service, the tangible element refers to the websites design because it
covers the main entrance to the brand and a successful transaction process (Li & Suomi, 2009).
Poor website design can result in a negative website quality impression, thereby motivating
potential customers to exit the purchasing process. In the field of human-computer interactions, research has shown that website design needs to go beyond usability to accommodate
consumers emotional, affective, and aesthetic needs and wants (Zhang et al., 2010). Existing
research emphasizes that website aesthetics, including display readability and information
abundance, impact vendor trust and customers beliefs (Li & Yeh, 2010). Aesthetically welldesigned websites also influence visitor loyalty (Cyr et al., 2006).
Customer service
Customer service is an indispensable factor in successfully managing an online shop (Zeithaml
et al., 2002). Extant literature on customer service scale development details the importance of
customer service (van Riel et al., 2001). According to the literature, customer service is highly
correlated with service reliability, customer sensitivity, personalized service, and timely
response to complaints. When a store employee delivers excellent service, customers feel
happy, excited, and attracted. For example, positive emotions are observed when customers
expectations of a salespersons service are met. Customer service is also important in online
environments (Cao et al., 2018; Prasad et al., 2019). In the apparel and fashion industries, where
luxury brands mainly retail, customer service is considered a key dimension of e-service quality
(Chung et al., 2020). The e-service quality represented by customer service significantly
contributes to the formation of e-loyalty by providing a satisfying online shopping experience
(Kim, 2019). The importance of online customer service is also emphasized in the service
recovery situation. When customers receive favorable recovery outcomes after a service failure,
brand loyalty increases (Shams et al., 2020).
Efficiency
Various aspects of website efficiency have a positive effect on a customers value perception of
online services (Rafiq et al., 2012). For example, in the online banking industry, system
efficiency was found to have a positive effect on brand equity, such as brand image, brand
awareness, and brand loyalty, along with responsiveness and fulfillment (Abu-El Samen, 2015).
Similarly, Jayawardhena (2004) found that web interfaces and access to transaction options
improve service quality. Overall, efficiency is positively related to customer satisfaction; therefore, it is considered an essential website element. In addition, from the point of view that
a website is a communication channel between the brand and customers, the official website
of a specific brand is assessed in terms of efficiency as well as effectiveness (Keller, 2003a). In
terms of service delivery, efficiency is primarily referred to as a dimension of online service
JOURNAL OF STRATEGIC MARKETING 5
quality (Rabinovich et al., 2008). Finally, transaction efficiency has also been shown to directly
influence hedonic or utilitarian value perceptions when customers form attitudes toward the
website (Carlson & OCass, 2011).
Brand awareness
According to Keller (1993), brand awareness is defined as a customers ability to recognize and
recall a brand. Brand awareness is a fundamental dimension of brand equity (Aaker, 1991), as
brand equity cannot form unless consumers are aware of the brand. Thus, building brand
awareness must take precedence above all else. Additionally, when the brand is more broadly
known, individuals are more likely to have an intention to purchase and recommend the
brands services and products (Horng et al., 2012). Thus, brands should strive to establish
a strong brand awareness among its website visitors to improve the likelihood that visitors
purchase and recommend the brand (Oh, 2000).
The perceived quality of the brands offerings is only one element that helps build brand
awareness. Other elements include store image, emotional arousal, and customer service that
customers can feel in the retail space (Rather & Camilleri, 2019). Similarly, in the online retail
environment, website quality has been found to support the formation of brand awareness as
well as strengthening the consumer-brand relationship (Christodoulides et al., 2006). From this
perspective, a brands official website influences brand awareness by representing the overall
atmosphere (thier et al., 2006). In this regard, various attributes that determine website quality
act as direct predictors of brand awareness. For instance, Madhavaram et al. (2005) found that
the overall design of a website or its visual attributes for emotional appeal influence brand
awareness over time. In addition, system quality including customer service and efficiency has
a positive effect on brand awareness (Chen & Chang, 2008). Importantly, online users with
brand awareness are more likely to become customers of the brand (Albert et al., 2004).
Several studies on brand awareness have reported that the experience on a brand website
improves brand awareness (Cheung et al., 2019; Quan et al., 2020). As such, it is predicted that
website attributes will have a positive effect on the formation of brand awareness.
H1a: The assessment of a websites emotional appeal is positively related to luxury brand
awareness.
H1b: The assessment of a websites design is positively related to luxury brand awareness.
H1c: The assessment of a websites customer service is positively related to luxury brand
awareness.
H1d: The assessment of a websites efficiency is positively related to luxury brand awareness.
Brand loyalty
Brand loyalty is the second core dimension of brand equity following brand awareness
(Aaker, 1996). Brand loyalty is defined as a deeper commitment to a preferred product or
service and is characterized as customer attachment (Oliver, 1999). From the brands point
6 H. HYUN ET AL.
of view, it is regarded as a key factor for building and maintaining long-term relationships
with customers (Kandampully et al., 2015). Past studies have consistently revealed that
customers form brand loyalty based on their evaluation of their experiences in service
encounter situations (Brodie et al., 2013; Rather & Hollebeek, 2019).
In the context of online customer experience, the website environment or customer service
quality has a positive effect on brand loyalty. A well-designed website that is convenient for
consumers to use can evoke positive emotional responses from consumers (Lin & Lee, 2012).
When a website visitor positively perceives the brand experience on the website, the visitor will
have a favorable feeling toward the brand, which contributes indirectly to the formation of
brand loyalty. For example, determinants of website quality assessments, such as website
design and interactivity, contribute to generating brand loyalty through brand affect and
brand trust (Islam et al., 2019). In addition, website quality benefits the brand by reducing
shopping risk of consumer thereby increasing e-loyalty, which is loyalty to the website (Hsieh &
Tsao, 2014). In previous studies, website quality has been reported as having a significant
impact on brand loyalty (Candiwan & Wibisono, 2021). In addition, the perception of a brand
website affects the repurchase decision of consumers (Zhou et al., 2009). Thus, specific website
attributes are expected to have a positive effect on the formation of brand loyalty.
H2a: The assessment of a websites emotional appeal is positively related to luxury brand loyalty.
H2b: The assessment of a websites design is positively related to luxury brand loyalty.
H2c: The assessment of a websites customer service is positively related to luxury brand loyalty.
H2d: The assessment of a websites efficiency is positively related to luxury brand loyalty.
Aaker and Keller (1990) insist that a brand with higher brand awareness and positive
recognition is likely to receive greater brand loyalty from its customers, thereby leading to
higher purchasing intentions. Moreover, Peng (2006) suggests that brand awareness is
the most significant factor leading to brand loyalty. The link between brand awareness
and brand loyalty has been supported by many studies (i.e. Alkhawaldeh et al., 2017). The
luxury sector possesses greater entry barriers than ordinary sectors; therefore, brand
awareness may be regarded as more critical in shaping brand loyalty for luxury brands.
H3: Luxury brand awareness is positively related to luxury brand loyalty.
Online customer service satisfaction and repurchase intention
Highly recognized brands have advantages during the consumers learning, deliberating,
and decision-making processes (Keller, 2003b). For example, customers rarely make purchase decisions when the brand is unrecognizable. The better customers know the service,
product, or brand, the more likely they are to purchase them and recommend them to other
people (Horng et al., 2012). In other words, establishing strong brand awareness has
a positive impact on website visitors purchasing desires (Nofal et al., 2020). To summarize,
positively perceived website service quality leads to brand awareness, and accordingly, it
may increase customer satisfaction and repurchase intention toward its products or services.
JOURNAL OF STRATEGIC MARKETING 7
H4: Luxury brand awareness is positively related to online customer satisfaction.
Brand loyalty has both behavioral and attitudinal dimensions. The behavioral dimension places weight on the consumers practical loyalty to the brand applied during the
decision-making process. The attitudinal dimension emphasizes a consumers intention to
be loyal to the brand (Yoo et al., 2001). Attitudinal brand loyalty refers to preferences
formed through previous usage and experience with the brand (Aaker, 1991). As such,
attitudinal brand loyalty determines loyal behavior. The behaviors arising from brand
loyalty are expressed as an intention to repurchase a specific brand iteratively or to pay
a premium price (Chaudhuri & Holbrook, 2001; Rafiq et al., 2020). Positive experiences
across various website attributes are expected to build brand loyalty and drive repurchase
intentions (Roy & Butaney, 2014).
H5: Luxury brand loyalty is positively related to online customer satisfaction.
In the field of marketing, customer satisfaction has long been a central topic for
researchers (Kim, 2012). Customer satisfaction is a psychologically positive state that
comes from the evaluation process of ones own experience and encourages behavioral
intention (Dai et al., 2015). In addition to the purchase experience, when consumers are
satisfied by confirming or exceeding their expectations in their online shopping experience, they develop a positive brand relationship and are more likely to repurchase the
brand in the future (Pee et al., 2018). For this reason, customer satisfaction has been found
in numerous studies as a key factor that induces positive consumer behaviors such as
a desire to repurchase the brand (Rather, 2018). In this regard, current research suggests
that there will be a positive relationship between customer satisfaction and repurchase
intention. The hypotheses are presented in Figure 1.
H6: Online customer satisfaction is positively related to repurchase intention.
Figure 1. Conceptual framework.
8 H. HYUN ET AL.
Methodology
Sample and data collection
We implemented an online survey via Amazons Mturk to collect data from shoppers who
had visited the official website of a luxury brand and made a purchase on the website. Mturk
is appropriate for recruiting enough participants and achieving reliability with diverse
demographic characteristics (Casler et al., 2013). Given its inherent advantages, prior
research on luxury brands has collected data from Mturk (Yu et al., 2018). As the data
collection was conducted before the COVID-19 outbreak, it is expected that the experience
of participants on the luxury brands official website will be lower than that after COVID-19.
As this study was conducted on consumers with a luxury brand online shopping experience,
a random sampling method was used. However, to screen consumers who do not have
a luxury brand shopping experience, the following procedure was configured.
The survey consisted of four sections. The first section was the screening part, which
asked the participants whether 1) they were aware of ten different luxury brands, and 2) if
they had visited the official website(s) of each of the luxury brands. If they answered, NOT
aware of any brands, the survey was terminated. This study identified respondents prior
awareness of ten different luxury brands representing various product categories, such as
apparel products, bags, shoes, jewelry, and watches from a major marketing website
(Table 1). The ten luxury brands were selected because they are the top 10 brands
surveyed by Brand Z, who comprehensively evaluates the companys sales, industry
leadership, and brand influence. Additionally, participants were asked if they had any
previous purchase experience through the official websites of any of the ten luxury
brands. Considering that luxury products or services purchases do not occur frequently
among general consumers, screening through information on the number of purchases or
frequency was excluded, and the survey participants were identified only as having or not
having purchase experience.
The second section identified which luxury brand(s) the participants had purchased
through the official website. The participants indicated their online familiarity with luxury
consumption and online purchases for general consumption. Online familiarity identified
in the general consumption situation showed an insignificant effect.
The third section included questions to measure the key constructs in the conceptual
framework. In this section, participants were asked to recall their visits to the official
website. If they were not able to remember the website experience, they could access the
official website through the link inside the survey and spend 510 minutes browsing the
website. Participants visited the luxury brands official website using the same method as
the access environment. The final section consisted of the participants demographic
information. After the data screening, 422 participants completed the survey (Table 1).
Measurements
This study measured key constructs by adopting scales from prior studies. All items were
measured using a seven-point Likert scale ranging from 1 (strongly disagree) to 7 (strongly
agree). The emotional appeal was measured using the items used by Loiacono et al. (2007)
and Etemad-Sajadi and Ghachem (2015). The website design was measured using items
JOURNAL OF STRATEGIC MARKETING 9
Table 1. Sample profiles.
Sample profiles Frequency
%
Gender
Male 215 50.9
Female 207 49.1
Age (years)
Age 17 or younger
2
5
18 – 24 90 21.3
25 – 30 165 39.1
31 – 35 81 19.2
36-45 49 11.6
46-55 21 5.0
56-64 11 2.6
Age 65 or older
3
7
Education
Did not complete high school
6 1.4
High school/GED 51 12.1
Associates degree 29 6.9
Bachelors degree 230 54.5
Masters degree 99 23.5
Advanced graduate work/PhD
7 1.7
Annual household income before tax
Less than $10,000 47 11.1
$10,000 to $19,999 65 15.4
$20,000 to $29,999 62 14.7
$30,000 to $39,999 55 13.0
$40,000 to $49,999 37 8.8
$50,000 to $59,999 44 10.4
$60,000 to $99,999 77 18.2
$100,000 to $149,999 31 7.3
Greater than $150,000
4
9
Known brands
Louis Vuitton 66 15.6
Herms
9 2.1
Gucci 69 16.4
Chanel 44 10.4
Rolex 126 29.9
Cartier
4
9
Burberry 60 14.2
Prada 26 6.2
Christian Dior 11 2.6
Yves Saint Laurent
7 1.7
Device used most often when shopping online
Smartphone
Most used 225 53.3
Often 109 25.8
Sometimes 51 12.1
Least used 37 8.8
Tablet
Most used 44 10.4
Often 114 27.0
Sometimes 129 30.6
Least used 135 32.0
Laptop
Most used 95 22.5
Often 154 36.5
Sometimes 126 29.9
Least used 47 11.1
Desktop
Most used 58 13.7
Often 45 10.7
Sometimes 116 27.5
Least used 203 48.1
n = 422.
10 H. HYUN ET AL.
from Kim et al. (2015). The measurement scales for customer service were borrowed from Li
and Suomi (2009), Santos (2003), and Parasuraman et al. (2005). The measurement items for
efficiency were the same as those in the study by Parasuraman et al. (2005) and Boshoff
(2007). Brand awareness and brand loyalty were measured using items from Mahfooz
(2015) and Kim et al. (2001). Koo and Ju (2010) employed the measurement items of
brand satisfaction and repurchase intention. Table 2 and the Appendix list all survey items.
Validity and reliability test
The validity and reliability of the measurement model were demonstrated through the
following steps. A confirmatory factor analysis (CFA) was applied as it is useful for measurement validation and yields a confirmation of the multidimensionality of a theoretical construct (Byrne, 2001). Table 2 presents the results of the CFA. The measurement model
Table 2. Measurement of validity and reliability.
Constructs
Factor
loadings t-Value CR AVE
Emotional appeal 0.83 0.83 0.62
I feel cheerful due to the friendliness of the website. 0.81 –
I feel happy when I use the website. 0.81 17.75***
I feel sociable when I use the website. 0.75 16.35***
Website design 0.83 0.83 0.62
The website has an attractive layout and design. 0.82 –
The website has an attractive image overall. 0.79 17.66***
Background color used on this website fit well with content. 0.74 16.27***
Customer service 0.89 0.89 0.66
The customer service representatives are very friendly. 0.83 –
In case of problems, I can talk to a customer service representative. 0.84 20.52***
The customer service representatives are very helpful. 0.78 18.18***
The advice of the customer service representatives is competent. 0.81 19.44***
Efficiency 0.88 0.88 0.61
The website makes it easy to find what I need. 0.80 –
The website makes it easy to get anywhere on the site. 0.78 17.37***
Information at the website is well organized. 0.77 16.90***
The website loads its pages fast. 0.75 16.58***
The website enables me to get on to it quickly. 0.79 15.59***
Brand awareness 0.88 0.88 0.61
I can recognize my brand among competing brands. 0.79 –
I am aware of my brand 0.74 16.34***
Some characteristics of my brand come to my mind quickly. 0.75 16.74***
I can quickly recall the symbol or logo of my brand 0.80 18.08***
My preferred brand has a personality of its own. 0.80 18.14***
Brand loyalty 0.84 0.84 0.64
I will use this brand in spite of competitors deals. 0.82 –
I would buy additional products and service in this brand. 0.80 19.16***
I prefer the brand to others. 0.78 18.46***
Customer satisfaction 0.85 0.83 0.63
I am satisfied with my decision to purchase this brand. 0.78 –
My choice to buy this brand was a wise one. 0.80 19.10***
I truly enjoy my purchase of this brand. 0.80 17.14***
Repurchase intention 0.86 0.86 0.67
I will keep using this website to buy this brand in the future. 0.86 –
I will frequently use this website for purchasing this brand in the future. 0.78 18.82***
I will recommend others to use this website for purchasing this brand. 0.81 19.91***
Goodness-of-fit (Chi-square = 676.41, DF = 346, p < .001, Chi-square/DF = 1.95, RMR = .05, CFI = .96, RMSEA = .05).
*P < .05.
**P < .01.
***P < .001.
JOURNAL OF STRATEGIC MARKETING 11
showed a satisfactory level of goodness-of-fit (Chi-square = 676.41, DF = 346, p < .001, Chisquare/DF = 1.95, RMR = .05, CFI = .96, RMSEA = .05). All standardized factor loading scores
were within the recommended benchmark range .57.84 with significant p-values (p < .001),
which supports convergent validity. Cronbachs for all constructs was above the threshold
value of .80, and the AVE for each construct was above .50, demonstrating sufficient
reliability. The Pearson correlation matrix is shown in Table 3. Moreover, multicollinearity
was tested, and VIF values ranged from 2.215 to 2.729. Because all the values were lower
than the threshold of 3.3 (Kock, 2015) multicollinearity is deemed unproblematic.
Hypothesis testing
Structural equation modeling (SEM) using the maximum likelihood via AMOS 21.0, was
employed to test the proposed hypotheses. Table 4 presents the detailed SEM results. The
structural model indicated a satisfactory level of goodness-of-fit (Chi-square = 711.70, DF
= 356, p < .001, Chi-square/DF = 2.00, RMR = .05, CFI = .96, RMSEA = .05). Hypothesis testing was performed sequentially in the order of the proposed method.
Table 3. Construct means, standard deviation, and correlation
EA WD CUS EF BA EL BE CS
EA 1.00
WD 0.560 1.00
CUS 0.670 0.660 1.00
EF 0.630 0.690 0.680 1.00
BA 0.630 0.640 0.720 0.650 1.00
EL 0.670 0.620 0.760 0.600 0.820 1.00
CS 0.570 0.530 0.700 0.580 0.760 0.780 1.00
PI 0.630 0.600 0.670 0.610 0.700 0.770 0.730 1.00
Means 5.32 5.44 5.15 5.42 5.30 5.16 5.31 5.19
S.D 1.12 1.08 1.08 1.04 1.04 1.19 1.14 1.20
EA: Emotional appeal; WD: Web design; CUS: Customer service; EF: Efficiency; BA: Brand awareness; EL: Brand loyalty; CS:
Customer satisfaction; PI: Repurchase intention.
Table 4. Hypothesis testing results.
No. Structural paths Standardized path t-value Sig. Support
H1a Emotional appeal Brand awareness 0.07 0.85 0.40 No
H1b Website design Brand awareness .12 1.48 0.14 No
H1c Customer service Brand awareness 0.34 4.04 *** Yes
H1d Efficiency Brand awareness 0.18 1.93 0.05 Yes
H2a Emotional appeal Brand loyalty 0.29 4.08 *** Yes
H2b Website design Brand loyalty 0.35 3.72 *** Yes
H2c Customer service Brand loyalty 0.34 4.44 *** Yes
H2d Efficiency Brand loyalty .14 1.85 0.07 No
H3 Brand awareness Brand loyalty 0.64 7.98 *** Yes
H4 Brand awareness Customer satisfaction 0.10 0.97 0.33 No
H5 Brand loyalty Customer satisfaction 0.88 7.55 *** Yes
H6 Customer satisfaction Repurchase intention 0.90 16.33 *** Yes
Goodness-of-fit (Chi-square = 711.70, DF = 356, p < .001, Chi-square/DF = 2.00, RMR = .05, CFI = .96, RMSEA = .05).
*P < .05.
**P < .01.
***P < .001.
12 H. HYUN ET AL.
First, the relationship between the attributes to determine website quality and CBBE
were investigated. In terms of brand awareness in CBBE, customer service and efficiency
were positively related to luxury brand awareness, which supports H1c and H1d ( = .34,
t = 4.04, p < .001; = .18, t = 1.93, p = .05). However, aesthetic elements of the website, such
as emotional appeal (H1a) and website design (H1b), were not significantly related to luxury
brand awareness (p > .10). In terms of brand loyalty in CBBE, all attributes except efficiency
(H2d) showed a significant relationship with luxury brand loyalty, which supports H2a
( = .29, t = 4.08, p < .001), H2b ( = .35, t = 3.72, p < .001), and H2c ( = .34, t = 4.44,
p < .001). Website customer service significantly affected both luxury brand awareness
and loyalty. Efficiency showed a positive relationship with luxury brand awareness, whereas
it had a marginally negative effect on luxury brand loyalty. Second, the relationship within
CBBE was also investigated. As we hypothesized, luxury brand awareness was positively
related to luxury brand loyalty ( = .64, t = 7.98, p < .001), which supports H3. Third, we
examined the relationship between CBBE on customer satisfaction (H4) and repurchase
intention (H5). Luxury brand loyalty was positively associated with customer satisfaction,
whereas luxury brand awareness was not; thus, only H5 was supported ( = .88, t = 7.55,
p < .001; = .10, t = .97, p = .33). However, the results show that brand awareness indirectly
affects customer satisfaction by increasing luxury brand loyalty. Lastly, the effect of customer satisfaction on repurchase intention was also significant, thereby supporting H6
( = .90, t = 16.33, p < .001).
Discussion
Luxury brands launch and operate websites to create another avenue for consumers to
access information about their products and make purchases. Previous research shows
that perceived website quality can generate positive customer attitudes, which in turn
drives purchases (e.g. Shen et al., 2016). This research aimed to further investigate how
each attribute responsible for website quality influences customers attitudinal and
behavioral responses with the mediating role of CBBE. The findings indicate that
a luxury brands website quality increases brand awareness and brand loyalty, resulting
in customer satisfaction and repurchase intention. However, not all attributes of the
website sufficiently contribute to building brand equity for the luxury brand, and only
some of the CBBE dimensions have a positive impact on repurchase intention via the
luxury brand website. The following sections discuss and highlight the important findings
of this study.
The results revealed that luxury brand awareness is influenced by online customer
services. Previous research conducted in an offline environment suggests that marketing
communication has an impact on brand awareness (Yoo et al., 2001). Moreover, brand
awareness improves as the brand relationship between a customer and a brand grows
(Tran et al., 2021), thereby reaffirming the importance of customer service. This study
emphasizes that customer service on the luxury brands official website is imperative for
improving brand awareness in the online environment because it exerts a stronger
positive effect on brand awareness when compared to other website quality attributes.
However, this result contrasts with the findings of Quach et al. (2016), who observed an
insignificant role of customer service in the online service context. Our findings refer to
luxury brands and not general brands. Thus, customer service appears to be more
JOURNAL OF STRATEGIC MARKETING 13
important when designing online spaces for luxury brands. Luxury shoppers tend to seek
assistance from service providers to help them make informed decisions when purchasing
luxury brands. During this interaction, service employees can answer questions about
a particular brand, provide detailed and updated brand information, and recommend
their newest products or services. As such, online shoppers visiting a luxury brands
website, which has a well-organized customer service, appear to become more aware of
brands and are better able to recall some important aspects of the brand.
Brand loyalty is influenced by trust and affective commitment (Bilgihan & Bujisic, 2015).
Our findings indicate that emotional appeal, website design, and customer service have
a significant influence on luxury brand loyalty. Importantly, the effect of customer service
on brand loyalty appears to be the most important website attribute, supporting the
findings of Ganguli and Roy (2011). Since an affective bond between a consumer and
a brand improves purchase intentions (Yu, 2020), building an emotional relationship with
customers based on high-quality customer service is crucial to establishing brand loyalty.
The present study reconfirms the influence of customer service on brand loyalty by
revealing that the likelihood of luxury shoppers repurchasing the same brand increases
as online customer service improves.
The results also demonstrate that customer satisfaction is positively influenced by the
customer service of a luxury brands website. More specifically, customer satisfaction
depends on the service providers performance in maintaining a long-term relationship
with a brand (Song et al., 2019). Thus, the better the customer service, such as providing
professional knowledge and accurate brand information, handling customers requirements
politely, returning responses promptly, and being available when they need help, the higher
the customer satisfaction. Because attachment toward a brand (e.g. brand loyalty) is formed
by experiences and memories of a customer (Hwang & Lee, 2018), more caution and
attributes should be invested in designing the phygital customer service environment.
Overall, this research reveals that the significant predictors of repurchase intention can
be derived from a luxury brands website. This means that repurchase intention is an
outcome of satisfaction describing the behavior of customers who are satisfied with
a luxury brands online service via the luxury brands official website attributes. This
finding supports previous studies that show that customer satisfaction positively affects
purchase intentions (e.g. Tsiotsou, 2005) and repurchase intentions (e.g. Gee et al., 2008).
Theoretical implications
This study contributes to the existing literature by illustrating a framework that explains
how online branding activities enhance brand equity through improving consumer
responses to a luxury brands official websites operating environment (Oliveira &
Fernandes, 2020; Raji et al., 2020). Although past studies have investigated the effect of
each website attribute in the operation of a companys official website (Kim, 2019;
Shankar & Datta, 2020), the empirical results of this study demonstrate the effects and
details of the four website attributes in a holistic framework. In this research, emotional
appeal, website design, and customer service were identified as having a positive influence on customer responses.
14 H. HYUN ET AL.
Another contribution of this study is identifying the effect of the official website
attributes of luxury brands on the two main dimensions of brand equity: brand awareness
and brand loyalty. The results of this study indicate that the e-retailing of luxury brands is
divided between raising brand awareness and directly creating brand loyalty according to
the type of attributes. In particular, the efficiency of the official website has an indirect
effect on brand loyalty by reinforcing brand awareness, while emotional appeal and
design directly increase brand loyalty. More importantly, customer service affects both
brand awareness and brand loyalty and is the area that luxury brands should pay
attention to when constructing a website. For consumers, luxury consumption is
a consumption behavior that requires high involvement; therefore, to build brand loyalty,
communication about purchases that can attenuate perceived risk is essential (Baek et al.,
2010; Xie & Lou, 2020).
Finally, this study specifies the mechanism by which online marketing activities of
luxury brands affect brand equity and subsequently affect outcomes related to consumers online behavior. The underlying mechanism suggested in this study is that CBBE
should be supported for luxury brands that require a higher level of customer experience
to acquire customers, which is consistent with relationship marketing and customer
experience theory (Morgan & Hunt, 1994; Rather & Hollebeek, 2021). The dimensions of
website attributes play a significant role in building a strong relationship between brands
and customers, which in turn helps achieve greater e-retailing outcomes. This means that
even for luxury brands that emphasize exclusivity and rarity, online marketing activities
should be delivered to maintain and strengthen CBBE while simultaneously encouraging
retailing through offline stores.
Practical implications
The current research suggests the following implications for practitioners, especially those
who promote and sell luxury products or services via their websites. First, this study
provides new insights for managers on how to potentially improve service quality on their
websites to attract more luxury buyers. Due to the easy process of buying luxury brands
online, the value of luxury brands, such as uniqueness and exclusivity, may not be fully
appreciated in online stores as compared to (Dauriz
et al., 2014). However, if managers enhance customers perception of website quality by
focusing on the aspects of customer service (e.g. availability, friendliness, problemsolving, and excellent advice) and emotional appeal (e.g. content, message, and story),
they can enhance customers positive responses to the luxury brand (Panchapakesan
et al., 2021). Consequently, this should lead to a higher behavioral intention to repurchase
luxury brands via official websites.
Second, this study suggests that it is worthwhile to have a thorough understanding of
the different effects of each website quality attribute. Each quality attribute tends to differ
in generating perceptions of brand awareness and brand loyalty. For example, several
quality attributes on a luxury brands website, such as emotional appeal, website design,
and customer service, lead to increased brand loyalty, while others do not (e.g. efficiency).
More importantly, the effect of efficiency on brand loyalty appears to be negative. This
shows that inappropriate management of official websites can hinder brand awareness
and brand loyalty. The research also suggests that managers must enhance the role of
JOURNAL OF STRATEGIC MARKETING 15
efficiency on a website, especially in the search stage, rather than in the purchase stage. In
the search stage, website efficiency enables customers to reduce risk by allowing them to
find information about the products or services (e.g. return policy, place of return, refund,
and warranty) at a high speed (Roggeveen & Sethuraman, 2020). Therefore, this type of
online service may help shoppers gain better brand awareness (Grewal & Roggeveen,
2020). In this regard, there is an implication for managers on how to create differentiated
marketing strategies to promote luxury brands on their websites by targeting different
shoppers. It is advisable to emphasize the most potent factors and their roles in
a particular stage of the shopping process (Wong & Haque, 2021). Managers should also
be careful in defining the linkage between each quality attribute and the shopping
process.
Third, the current findings provide marketing strategies for the omni-channel retailing
of luxury brands. Todays consumers are no longer limited to buying in either an offline
store or an online store as they often move between online and offline environments
during the purchasing process (Zhang et al., 2021). Morever, consumers now use several
devices when shopping online (see Table 1). The way consumers shop through omnichannels is atypical and complex, and they are experiencing a much longer customer
journey than ever before, exposing themselves to a wider range of alternatives (Bijmolt
et al., 2021; Verhoef, 2021). The acquisition of vast amounts of information, which is
difficult to satisfy in an offline store, is mainly provided in the online environment. Omnichannel retailing, which emerged from such consumer demands and technical support,
has caused various challenges, such as channel integration and optimization (Zhang et al.,
2021). Faced with these challenges, retailers are encouraged to implement more consumer-oriented service provisions. Existing luxury consumers have high expectations for
the retail environment, emotional appeal, and customer service in physical stores when
purchasing luxury products (Klein et al., 2016). Even under the limited shopping experience of physical stores, consumers rely on the store atmosphere to reinforce their brand
experience and perceive uniqueness (Dion & Arnould, 2011). Likewise, the results of this
study show that consumers expect to experience an exclusive sense of luxury in the
online retail environment and the online brand experience directly affects brand equity.
Providing a wealth of customer service elements to reduce perceived purchasing risk, as
well as improving the aesthetic quality and emotional appeal of a luxury brands official
website, is required in todays omni-channel retailing environment (Park & Kim, 2021). In
addition to the continuously morphing market conditions, such as the global recession,
the COVID-19 pandemic, and trends that emphasize value for money, the unique and
instinctive characteristics of luxury goods remain (Peng & Chen, 2021). Thus, luxury brand
managers should establish marketing strategies that utilize the unique characteristics of
luxury brands.
Limitations and directions for future research
This study has limitations that provide avenues for future research. Although this study
did not find significant effects on some relationships, it did provide a theoretical framework linking website quality to the branding process of CBBE to understand consumer
behavior in an online context for luxury brands. Given that the proposed conceptual
16 H. HYUN ET AL.
framework explores the relationship between atmospheric qualities on luxury brands
websites and consumer attitudes, future research may consider applying the proposed
conceptual model in non-luxury settings to extend the findings to different sectors.
This study establishes significant effects of emotional appeal, website design, and
customer service on luxury brand awareness and brand loyalty within CBBE and indirectly
on satisfaction and repurchase intention. Previous literature on regular brands has
revealed that the impact of website quality on brand equity is positive for a variety of
attributes, but this study of luxury brands showed some insignificant influence.
A plausible reason may be that most of the respondents tend to use smartphones
when they shop online, and some constraints on smartphones may lead to their infrequent usage for purchasing. According to Gao et al. (2015), smartphones have limited
display capacity because of their smaller screen size compared to other devices, such as
desktops and tablets. Subsequently, some website features may not be displayed or
presented on smartphones. In addition, Wang et al. (2015) reported that online shoppers
tend to use mobile devices to buy products that they have previously purchased. This
implies that devices used when shopping online can have an impact on consumer
decisions regarding luxury brand purchases. Therefore, it is worthwhile for future research
to further explore the moderating effect of device type on consumers online buying
intention for luxury brands. This study also tested the research model using crosssectional data. Longitudinal data and other sampling techniques should be used in future
studies to examine the effects online shopping experience has on CBBE and repurchase
intention (Raza et al., 2020).
Disclosure statement
No potential conflict of interest was reported by the author(s).
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