SOCIAL MEDIA MARKETING AND CUSTOMER ENGAGEMENT IN THE ITALIAN FASHION INDUSTRY: EVIDENCE OF AN EMPIRICAL RESEARCH

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1 2015 Global Fashion Management Conference at Florence Proceedings: (June 2015) SOCIAL MEDIA MARKETING AND CUSTOMER ENGAGEMENT IN THE ITALIAN FASHION INDUSTRY: EVIDENCE OF AN EMPIRICAL RESEARCH Virginia Fani, University of Florence, Italy 1) Romeo Bandinelli, University of Florence, Italy 2) Monica Faraoni, University of Florence, Italy 3) Rinaldo Rinaldi, University of Florence, Italy 4) ABSTRACT The aim of this paper is to understand which are the most effective social media strategies for gaining customer engagement for fashion companies. The study has been conducted using the empirical research methodology and the information has been collected with the use of an online survey distributed among companies belonging to the fashion industry. 42 questionnaires have been collected and therefore discussed. The analysis led to the definition of a list of strategies used by fashion companies on the adoption of social media tools. Subsequently, activities and the social tools able to improve customer engagement have been analysed. Finally, according to the size of the companies and to their positioning on the market, a descriptive analysis of the results have been carried out, comparing companies with similar characteristics. The research shows that companies of the same segment adopt the same approach to social media as well as a similar set of social media marketing strategies. The findings of this paper confirm the growing interest both from academics and practitioners for Social Media Marketing tools and they will suggest implications to fashion brands to manage their customer engagement and their social media activity. Keywords: fashion brands, social media, customer engagement, social media marketing tools, social media activity INTRODUCTION Social media have become vital tools for marketing manager to communicate with consumers increasingly eager to share opinion and to be involved in the brand life. Safko and Brake (2009) define social media as activities, practices and behaviours among communities of people who gather online to share information, knowledge, and opinion using conversational media. Several studies point out that if executed effectively, 1) virginia.fani@unifi.it 2) romeo.bandinelli@unifi.it 3) monica.faraoni@unifi.it 4) rinaldo.rinaldi@unifi.it 326

2 social media can be a valuable communication instrument to enhance brand consumer engagement (Sashi, 2012), which in turn, lead to a significant positive impact on long term customer relationships (Hofmann & Fodor 2010) and on brand loyalty (Erdogmus & Cicek, 2012). Consumer engagement is the level of a customer s cognitive, emotional and behavioral investment in specific brand interactions (Hollebeek, 2011). Today s consumer is more powerful and busy than ever. The degree of his involvement in interaction with brand is deeply related to the effectiveness of the social media strategy. It derives that companies need to carefully define the dimensions of their social media strategy and taking decision about the number and types of social media to use, the purposes of the interactions, communication contents, expected results, budget allocation and so on in order to gain customer engagement in all its facets. In social media marketing (hereinafter SMM) managers need to shift the strategic focus from trying to sell to making connection with the consumers (Gordhamer, 2009) and this imply a new definition of the strategy dimensions. This is especially true for fashion brands that can no longer based their success on secure regular customers, as in the past (Kim and Ko, 2012). Nowadays, increasing brand image and customer engagement has become one of the most critical asset for getting a positioning into the fashion market (Brun et al., 2008). In this context, one of the most effective and almost costless way to increase companies appeal is pushing on SMM strategies (Kim and Ko, 2010). Their effectiveness is demonstrated by the growing interest in the use of SMM among fashion brands (Kim and Ko, 2012) even if, at the beginning, that brands showed low commitment towards integrating advanced Internet technologies (Okonkwo, 2009), not completely believing in their potential to attract customers (Kim and Ko, 2010). Despite this significant attention a structured research on fashion companies social media strategies is still missing and an empirical analysis on these aspects could produce interesting findings. We propose a research conceptual design as showed in fig. 1 Specifically, the present paper aims to investigate the following research questions (RQs): RQ1. Which are the dimensions of social media strategy used of fashion companies in gaining customer engagement? In go deeper in the analysis we take into consideration company size as a discriminant variable in social media strategy. Small business can benefit from social media, since they can e.g. present their products and services to an extremely large audience and still maintain a close relationship with them (Lacho & Marinello 2010). Moreover, social media tools are often relatively inexpensive (Kahle & Valette-Florence 2012), which can be a huge advantage for small companies with a tight marketing budget. The research question on this aspect is: RQ2. Does company size matter in social media strategies to gain consumer engagement? 327

3 We then consider the fashion brand market position (mass market, accessible luxury and luxury) as an indicator of social media strategic behaviour in capturing customer engagement. The relative research question is: RQ3. Does company market position matter in social media strategic behaviour to gain consumer engagement? RESEARCH METHODOLOGY Aiming to investigate the research questions, a self-administrated questionnaire has been developed. The online survey has been online distributed, collecting 42 completed answers. The questionnaires is structured in five sections: the first one collects general company information (e.g. dimension); Section 2 analyses company s SMM strategies in both a qualitative and quantitative way, investigating the main used social media tools; the third section is focused on the implemented SMM activities, their monetary and timerelated investment and their effectiveness in terms of gaining cognitive, emotional or behavioural engagement; Section 4 investigates the monitoring of SMM activities; the final section analyses the company s SMM future orientation. RQ1 hypothesis was tested producing some measure of the element under customer engagement as for example, the intention to inform consumer on brand and company event (cognitive engagement), the purpose to consolidate and strengthen the brand attachment (emotional engagement), the sharing of opinion on brand and generation of consumer communication content, website traffic generation and so on (behavioural engagement). Moreover in terms of social media strategy dimensions we use six (Dn.) different elements as showed in fig. 1. RQ2 hypothesis was tested using company size as a sample discriminant (small, medium and large companies) measured by the number of employees according to the definition of SMEs of the European Commission. RQ3 hypothesis was tested using company market position (mass market, accessible luxury, luxury) as derived from Saviolo and Testa (2005) Even of in the extended abstract the results are reported with a descriptive approach, authors are testing the relationships using a stepwise multiple regression analysis and the full paper will report these data. PRELIMINARY RESULTS This paragraph summarizes the preliminary results coming out from the descriptive data analysis collected through the empirical research. As in the research design (fig.1) the dimensions of social media strategies considered were: communications goals, tools, practices, conversational themes, budget allocation and monitoring activities. 328

4 Regarding to the social media communications goals (D1) all the customer engagement facets seem to be pursued even if the emotional engagement, aimed to build a positive consumer brand attitude gains more attention than cognitive and behavioural engagement aspect. In terms of social media tools (D2), in addition to the corporate website, the 84% of the companies use both a social media institutional page and e-commerce site whilst only the 11% has an unique presence on the social media and the 5% of the sample uses mainly its own website. While the 95% of companies use in some way social networks, the 81% is present in some content community like YouTube, 51% in blogs, 3% on social news websites and 5% in collaborative projects. Simulation environment, such as virtual words (Second Life for example), are not used by anyone, showing that these tools are not yet perceived as strategically important, given the limited availability of resources. Referring to the social media practices (D3), publication of videos and posts on social networks gain main attention than publication on fashion blogs or on corporate website. Posting news on corporate website or in the website blog are instead practices chosen less. In terms of post content and conversational themes (D4) publication of information about the company or the product as well as sharing of photos, videos and history of companies products and services especially related to the launch of a new product collection are the ones most frequently performed. Activities such as publishing of promotional content and collection and analysis of user comments are instead performed only a few times. Budget allocation (D5) data show that 87% of fashion companies spend by about 0-25% of the marketing budget in social media. Finally, given the fact that literature about SMM highlights the importance to control what users do and say in these environments, the companies monitoring activities (D6) regarding these aspects have been analysed. The result shows that 73% of companies uses social media analytics tools to monitor customer activities on the social networks. This result confirm the evidence of the literature. The result of a multiple regression analysis will determine which dimension, between those listed before contributes primarily to define SM strategy to gain the cognitive, emotional and behavioural consumer engagement (RQ1) A similar analysis will be carried out for testing RQ2 assumption. From a descriptive point of view a first evidence emerges on the social networks, blogs and communities presence: while Large and Medium size companies are present on all of these channels, Small ones do not manage social networks institutionally. Such diversity can be related not to a different strategic perception, but to the lower budget (D5) that small-size companies are able to invest, both in terms of resources and time. This assumption is confirmed by two different results of the survey. First, a positive opinion regarding the use of these instruments and their implementation has been expressed by marketing managers of companies of every dimension, secondly by the different invested resources dedicated to these activities (between 0-25% of the marketing budget for small companies against more than 25 % for medium and large one). The same results emerge 329

5 in the analysis of time assigned for performing these activities (10 hours per week for the first one, against 20 for the others) A different company approach emerges in the strategic tools dimension (D2) to gain customer engagement. In details, small and mid-size companies use blogs more frequently than large ones and they believe that making such kind of activities can create an average involvement, while large-size companies assign only a limited level of engagement related to these activities. In testing RQ3 assumption, companies have been grouped according to the different brand market position (mass market, accessible luxury and luxury). Results does not show important evidences in terms of social media utilization and practices. Social media tools (D2) are considered useful by all the companies even if mass market firms mainly use blogs to communicate with customers, whereas accessible luxury and luxury ones use such channels rarely. On the other hand, a difference in terms of invested budget (D5) can be evidenced. While mass market companies declare to spend about 25% of their marketing budget on online activities, the budget of the remaining two groups seem to be lower (from 0 to 25%). Concerning the use of time resources dedicated to SMM activities, the situation is the opposite: companies belonging to the luxury group invest more time (from 20 to 30 hours per week) while the others invest less (from 10 to 20). In terms of posting activity (D4) publishing information content about the products and sharing of photos, videos and history are carried out frequently or continuously by all the companies, independently from brand market position while the activities of publishing promotional content and comment their collection are performed frequently by companies belonging to the mass market segment, whilst other companies carried out these activities occasionally. CONCLUSIONS AND IMPLICATIONS Even if the preliminary nature of the research can not demonstrate any kind of assuming, this work gives a contribution on the analysis of fashion companies social media strategies to engage customer and to the relationship among SMM strategies and firms size and brand market position. A first result of this study confirms the growing interest of the companies on SMM: tools and practices in this area are considered strategic for the success on the market. All of the companies of the sample declared to implement communication strategies with the use of social networks achieving a positive feedback from the customers. The main contribution of the study is to provide a conceptual framework through the analysis of various dimension of SM strategy used by fashion companies to gain consumer engagement in all its facets. 330

6 The recipients of this research work are the companies, whether they are getting started with these tools, but also in the case of a more consolidated usage. For companies facing for the first time the use of social media, the study can be initially helpful because it provides an overview of the strengths and weaknesses of each strategic dimension as well as possible uses within the organization in relation to specific consumer engagement goals. For companies that already use social media, the usefulness of the study can be twofold: to identify those activities that better allow to get the highest benefits in terms of customer engagement and the tools upon which to act in the future because more effective than others. Although the analysis sample is sufficiently large, it would be appropriate to validate the results with a larger sample and, in addition, such studies for companies belonging to other sectors. References Brun, A., Caniato, F., Caridi, M., Castelli, C., Miragliotta, G., Ronchi, S., Sianesi, A., Spina, G. (2008). Logistics and supply chain management in luxury fashion retail: empirical investigation of Italian firms. International Journal of Production Economics, 114 (2), Erdogmus I.E. and M. Cicek (2012). The impact of social media marketing on brand loyalty. Social and Behavioral Sciences, 58, doi: /j.sbspro Gordhamer, S. (2009). 4 Ways social media is changing business. Retrieved from (accessed on 29 December 2014). Hoffman D. and M. Fodor (2010). Can you measure the ROI of your social media marketing. MIT Sloan Management Review, 52 (1), Brodie R.J, Ilic, A., Juric, B., Hollebeek, L. (2013). Consumer engagement in a virtual brand community: An exploratory analysis. Journal of Business Research, 66, Lacho, K. and C. Marinello (2010), How small business owners can use social networking to promote their business, The Entrepreneurial Executive, 15, Kahle, Lynn R. and Pierre Valette-Florence (2012), Marketplace Lifestyles in an Age of Social Media: Theory and Method. Armonk, NY: M. E. Sharpe. Kim, A. J., Ko, E. (2010). Impacts of luxury fashion brand s social media marketing on customer relationship and purchase intention. Journal of Global Fashion Marketing, 1 (3), Kim, A. J., Ko, E. (2012). Do social media marketing activities enhance customer equity? An empirical study of luxury fashion brand. Journal of Business Research, 65 (10), Kort, (2006). Brand image and brand dilution in the fashion industry. Automatica, 42 (8), Okonkwo, U. (2009). Sustaining the luxury brand on the Internet. Journal of Brand Management, 16, Sashi, C. M. (2012). Customer engagement, buyer-seller relationships, and social media. Management Decision, 50 (2),

7 Saviolo S. and Testa S., Le imprese del sistema moda. Il management al servizio della creatività, Etas Libri, 2005, ISBN Figure 1. Research design 332