Chapter 1: Introduction

With the increased usage and traffic experienced from social media applications such as Instagram, there is a huge untapped marketing potential that could be used to target customers for various products and services. As a result, the majority of the marketers have gradually shifted to extensive social media marketing where significant financial resources have been used to attract the customer’s attention, therefore, increasing the probability of product purchase (Jansom et al. 2021). The majority of the current social media worldwide are millennials who account for a significant percentage of social media users. For example, statistics indicate that 79% of the millennials in the UK utilize social media applications per day while millennials constitute of approximately 33% of all online purchases in Canada (White, 2018). The luxury fashion brands have taken this opportunity by storm by utilizing social media applications such as Instagram to attract millennials since they are also the largest consumers of the latest fashion trends (Jansom et al. 2021).  As a result, the luxury fashion brands have benefited massively from this new opportunity of marketing by attracting more and more millennials.  For example, luxury brands such as Louis Vuitton, Gucci, and Prada have extensively marketed their luxury products on Instagram attracting more millennials as a result (White, 2018). This dissertation intends to make a critical evaluation of how luxury fashion brands have used Instagram to attract millennials in the UK by investigating how the UK’s millennials engage with social media regarding fashion brands.

The use of social media platforms has significantly transformed the way different brands promote and market their products. Social medial platforms such as Instagram and Tiktok offer platforms with a rich diversity in terms of the number of users and demographic variety hence brands can reach out to a diverse population worldwide which has been essential in helping the brands expand and engage with a multitude of potential buyers (Stephen, 2016). Since the majority of the social media users are millennials and younger human demographics popularly known as Gen Z they offer a young and dynamic market base (Kaur, 2016). Fashion and luxury brands have taken advantage of this potential market by using social media to promote their fashion brands to millennials and Gen Z who are more fashion conscious than older groups hence these brands increase the probability of their products being purchased by these social media users (Dwivedi et al. 2021). By studying the purchase behavior and intention of the millennials, the fashion brands are in an ideal position to present their products in a way that appeals to the target consumers. As a result, these brands have been able to experience some significant benefits such as increased sales figures, increased brand loyalty, and gaining a competitive edge over other competitors in the industry.

These luxury fashion brands have been able to implement competitive and effective social media marketing strategies which are mainly targeted at attracting millennials (Jansom et al. 2021). However, the negative result which has been experienced from such instances is that there has been increased polarization in that the fashion brands with significant market shares have continued to increase the market share in comparison to smaller fashion brands over the past 5 years which has gradually reduced the competitions levels while increasing monopoly (White, 2018).  For instance, statistics on the luxury fashion brand Gucci indicate that 50% of its annual sales can be attributed to millennials while 65% of Saint Laurent’s sales, another major luxury fashion brand can be directly attributed to millennials and social media marketing (White, 2018). The statistics presented illustrate how social media applications such as Instagram have come to be vital tools in marketing and improving profitability margins. The effectiveness of Instagram marketing to millennials can also be indicated through the sheer number of followers these fashion brands have on the application. For example, Gucci has 20.3 million followers while Louis Vuitton has 48.6 million followers with over 50% being millennials (White, 2018). Therefore, it is necessary to investigate the different social media strategies employed by such brands to enable an understanding of how such strategies can be applied in other similar marketing ventures.

The digital world has significantly changed the way people interact with each other and how brands get to reach their customers. As a result, social media has grown increasingly relevant as an effective tool, especially for luxury fashion brands which they can utilize to reach out to a wider customer segment (Helal et al. 2018). Additionally, the majority of the customers for luxury fashion brands are one the most active users of Instagram in the UK which makes the social media application an ideal target for marketers (Simpson, 2018). The reason why this is so is that such avid Instagram users are more likely to consume a lot of content and post content more often in comparison to the average user which makes them an ideal target to promote their products (Helal et al. 2018). The digital world has also made it necessary for fashion brands to engage their customers through multiple channels which can be seen in the Chinese luxury shopping sector with over 15 touchpoints for their customers in which half of which are digital which shows how the business environment has changed in terms of the requirements to be successful and profitable (Simpson, 2018). Digital engagement requires effective strategies which understand the way millennials interact with social media applications such as Instagram and fit their strategies to align with this knowledge.

Statistics on Instagram usage in the UK indicates that the number of users in the country has grown significantly over the users in which the usage has grown by 35% since 2016 (Simpson, 2018). Based on these statistics, it is approximated that the UK’s  Instagram users are about a quarter of the total UK population. Additionally, the luxury global consumers are known to carry the most influence on Instagram since they have more followers than the average user and they also like staying in the know by following more accounts which provides a good revenue that can be applied to raise awareness about a certain luxury product or service (Helal et al. 2018). Majority of the Instagram users in the UK are known to spend their time on their site engaging with brands in which 56% of the user use the platform for viewing the latest fashion trends and collections while 58% use the application to keep up (Simpson, 2018). The nature of Instagram usage provides an ideal marketing environment for luxury brands since Instagram gives a natural platform for showcasing fashion trends. For instance, in the fashion month of AW17, 64 million people on Instagram had generated 387 million likes and comments which indicates a prime market (Simpson, 2018). With the right strategy and approach, fashion brands can benefit from marketing.

There are a variety of strategies that have been implemented in Instagram marketing by the luxury fashion brands. For example, one of the strategies is the use of influencers. Influencers provide an effective social media strategy since they use their power and appeal to attract the target audience to view the product being advertised in which they establish a positive feeling with the product, therefore, increasing the probability of product purchase (Richardson, 2016). The influencers also exploit their huge following to increase the level of product exposure in which they demonstrate the products in a manner that seems beneficial to value addition to the customer’s life (Richardson, 2016). The advantage of using influencers as a marketing strategy is that they make the product accessible and tangible since the marketing technique used is memorable and a powerful approach to attracting the millennial demographic (Simpson, 2018). However, one of the main challenges of influencer marketing is that it may be challenging to find the right influencer who might match the brand’s image (Simpson, 2018). There is also the possibility of influencer fraud which might mean loss of financial resources with no value gained. Therefore, luxury fashion brands take measures such as signing official partnership documents which promote integrity and accountability.

1.2 Justification

The potential contribution from the research findings is that they will provide valuable insights and knowledge on the possible different ways and methods that are applied in brand promotion and marketing. The research will be important for fast fashion brands and luxury brands since they will gain knowledge of how millennials and generation z use social media platforms and the strategies which can be applied in promoting their products based on this knowledge (Evans, 2021). This contribution can also add additional knowledge in the field of online marketing therefore marketers can find significant knowledge to inform their respective marketing and brand promotion strategies hence this proposed research can be considered important and valid.

1.3 Research questions

• In what way do the millennials in the UK engage with social media regarding luxury fashion brands?
• What strategies do luxury brands use through social media platforms and particularly Instagram in the UK?
• What are the millennial’s purchase intentions of luxury fashion through Instagram?

 

1.4 Research objectives

• To examine the way Millennials in the UK engage with social media (Instagram) regarding luxury fashion brands.
• To investigate what strategies luxury brands (Versace, Louis Vuitton, Gucci), use through social media platforms and particularly Instagram in the UK.
• To investigate the Millennials’ purchase intentions of luxury fashion through Instagram.

 

 

Chapter 2: Literature Review

 

2.1 Theoretical framework

 

As the technological advancements have resulted in significant improvements in terms of internet usage and a rapid increase in social media usage, there is a need to evaluate the relevant theoretical models that can be applied in understanding social medial marketing and how it is used as a tool of influencing target customers (Dawot, 2014). Developing a theoretical framework of reference is necessary for establishing a coherent understanding of the social media marketing environment, how it works and how it can be leveraged by a luxury fashion brands to increase the probability of purchase. For example, one of the theoretical frameworks that can be applicable is the honeycomb of social media which gives guidelines that explain the different blocks which make up the various social media platforms (Linea, 2015). The honeycomb model is primarily divided into two main components that are each comprised of seven distinct blocks which define the building blocks of the social media platforms (Dawot, 2014). The first division of the honeycomb model gives a depiction of the different functionalities of the applications and the other honeycomb explains the implication of each of the functionality for brands and firms that may have the intention of using the social media framework for marketing.

The figure below gives a visual illustration of the honeycomb model of social media marketing.

Figure 1: The honeycomb of social media                 Source: (Linea, 2015).

According to Kietzmann et al. (2012), the main building block of this model is based on identity in which the social media identity largely depicts the intensity and level through which the social media users reveal their nature. For example, the ways in which such users can make revelations about themselves are based on demographic factors such as age, gender, and even occupation (Dawot, 2014). The different social media applications each provide their users with the ability to express information about themselves which builds up a sort of identity on the social media platforms. For instance, social media applications such as Facebook and Instagram have functionalities in which the users can generate their user profiles or bios which leads to the creation of virtual identities that may or may not match the true physical identity of the user (Linea, 2015). However, one of the challenges faced by such service providers is based on aspects such as preserving the privacy and trustworthiness of the personal information given out by the users (Dawot, 2014). The data presented by the users as identify presents a vast pool of information which is important for marketers since they can use their data to generate customer segments and profiles that suit their brand, therefore, targeting these segments of customers.

Based on the honeycomb model of social media, these platforms have realized a monetary from marketing through the data provided by the customers. For instance, social media companies are known to collect information on their users frequently in which this information is sold to brands and firms that wish to promote their products on social media platforms (Kietzmann et al. 2012). However, there is a significant limitation on the reliability of the information presented due to the number of online fake accounts with fake identities. Statistics conducted to investigate the number of fake accounts on Instagram reveal that the social media application has an estimated 95 million fake accounts run by bots which amounts to the notion that in every 10 Instagram accounts, there is 1 fake account (Statista, 2022). Such statistics indicate that the information given to brands might be biased or misinformed which might lead them to develop wrong marketing strategies which may end up being ineffective leading to considerable losses. As such, brands should ensure that they have ways in which they can ensure the credibility and reliability of the information provided (Kietzmann et al. 2012). Establishing a positive relationship with online social media users is significant for generating a significant following and wielding significant influence that may result in a positive brand image and increased sales through marketing.

Another essential aspect of the model is based on sharing. The element of sharing focuses on the extent to which social media users contribute to the exchange, creation, and distribution of content. Sharing is a crucial element of social media marketing because the more people share content on a particular product, the more there is an increased chance that there might be willing customers to purchase the product (Linea, 2015). Therefore, brands that might intend to use Instagram as an avenue for marketing their fashion products should make a point of understanding the different sharing habits and trends and the content preferences of the social media users (Kietzmann et al. 2012). Understanding this sharing process on social media platforms is essential for two main reasons. Firstly, understanding how users share content can help the luxury fashion brand to have a positive impact on the purchase intention of the customer (Kietzmann et al. 2012). Secondly, the knowledge might help the firm understand what content should not be posted which might offend the users and have a negative effect on the marketing strategy (Linea, 2015). Therefore, the customers should have a proper understanding of the brand and its products which will make them more emotional when using the product and develop a sort of positive association with the product which is beneficial to the brand’s profitability and competitiveness.

Figure 2: The marketing communication tetrahedron                        Source: (Linea, 2015).

Another theoretical framework that can be applied in understanding how luxury fashion brands use Instagram to influence millennials is the marketing communication tetrahedron. The figure above illustrates how the marketing communication tetrahedron works and how it can be integrated to improve communication with consumers through the different marketing channels. For example, one of the applications of this marketing framework is that it helps brands gain knowledge on how the consumers respond to different marketing messages which inform on which marketing approach is the most effective and should be implemented for achieving maximum efficiency (Linea, 2015). However, in order to apply this framework and integrate it holistically, there is a need to evaluate the different marketing messages that are sent out to target consumers which helps to evaluate the firm’s presence and position in the marketing environment (Bayazovna, 2020). Failure to incorporate such factors can result in negative impacts on the marketing strategies. Additionally, the marketing communication tetrahedron provides more capable for understanding how other elements such as time and place may have an impact on how the consumers interpret the marketing messages which prompts the brand to establish the ideal time and place to post their content to the target customers (Bayazovna, 2020). This tool can help in understanding the way fashion luxury brands utilize Instagram as a social media marketing tool.

2.2 Instagram

The social media application called Instagram was initially launched in the year 2010 and was accessible through the use of smartphones (Linea, 2015). The main idea behind the development of Instagram was to provide the target users with the ability to upload pictures, videos, and other content and share them with friends and family through an online community. However, the platform has evolved rather quickly since now there are additional features that give more capabilities to the users such as the ability to incorporate filters to the liking of the user. Statistics on the usage of Instagram worldwide do reveal that there are more than 1.2 billion users worldwide with more than 500 million accounts being active daily as per 2020 statistics (Statista, 2022). The statistics on usage make Instagram the second most used application behind Facebook based on the number of daily logins. Furthermore, the statistics on the user demographic on Instagram indicate that a significant portion of the users are well below 25 years which implies that most of the Instagram users are millennials since a few percent are above 55 years old (Linea, 2015). For instance, in countries such as Sweden, the main consumers of social media application are between 9-16 years old which creates a vast potential market (Linea, 2015). The reason why Instagram stands out from other social media applications is that there is less traffic to ads which indicates users enjoy uninterrupted viewing.

Instagram provides an ideal opportunity for marketers to post video content on their products, therefore, advertising to their users the potential benefits to be gained from the use of their products. Providing a variety of marketing content through different formats such as pictures, videos or text gives an inclusive opportunity in which users with different tastes can choose the advertising content they most prefer hence more effective (Huey et al. 2014). Research also indicates that the majority of the users on Instagram do establish a positive relationship with the advertisement and promotional content that may seem self-selected to them as compared to direct text messages hence Instagram provides the ideal platforms for such kinds of advertisements (Khan, 2018). The reason why it is an ideal avenue is that the users are deliberate in the content they view which makes them feel in control. As a result, there has been an attempts to establish viral marketing strategies that can generate the optimal customer trigger. For example, one of the ways it is achieved is through the hashtag functionality of the application which is effective since it gives affiliation to a bigger movement that motivates people to follow a certain ideology or brand (Khan, 2018). Hashtags can be seen as an ideal way to create a pull on the target consumers to purchase the product.

2.2.1  Instagram as a marketing tool

Despite its original development as a tool for social interaction and communication, Instagram has slowly evolved into a digital marketing tool that is sought after by different brands including luxury fashion brands as a way of attracting more people and generating more web traffic on their content. The reason why Instagram has grown to be a significant marketing tool over the years can be attributed to how it allows for effective communication which allows the marketers to have more direct interaction with their customers hence an efficient way of gaining essential feedback. Huey et al. (2014) recognize the fact that Instagram can be applied as a marketing tool in which companies actively advertise their products while also establishing a friendly and positive relationship with their customers. The emphasis of Instagram on visuals through a visual-based strategy makes it ideal to use photographs as a means of advertisements (Huey et al. 2014). It is said that photography conveys a lot of information that words can which makes Instagram marketing very effective since marketers can develop aesthetic photographs to appeal to their users (Khan, 2018). Furthermore, Instagram is effective as a marketing tool since it helps the brand advertisers to save on costs incurred through brand design since the photographs can be edited, and filtered through the photography functionalities on the application.

The other reason that Instagram has grown to be an effective marketing tool is that it allows firms to have a better understanding of customer preferences based on their user profiles and the content they share online. For example, the aspect in which users can reply to comments and leave comments on the content posted makes it a valuable avenue for gaining insightful feedback on what aspects can be improved on the products which also increases customer satisfaction (Huey et al. 2014). The comments section also provides an opportunity for the markets to actively engage with the consumers allowing for prompt feedback (Khan, 2018). Apart from comments, there is also the functionality of direct messaging which allows for one on one conversations and provided an opportunity to communicate directly with the most important and viable customer segments which prove to be effective (Huey et al. 2014). Despite its advantages as a marketing tool, there have been criticisms on the overall state of the application to prevent fraud through security measures (Huey et al. 2014). For example, there have been numerous cases concerning privacy and accounts being hacked which discourages some users from using the application extensively which is a significant blow to the marketers (Linea, 2015). These concerns limit the effectiveness of Instagram as a marketing tool due to the negative responses observed from the users.

2.3 Marketing Strategies used by Luxury fashion brands through social media platforms

Luxury fashion brands have extensively integrated social media marketing into their marketing strategies due to the variety of opportunities that the different social media applications provide in terms of market base. Social media applications such as Facebook, Instagram, and Twitter are used by luxury fashion brands to showcase their luxury products to their customers which has proven to be an effective marketing technique for attracting the masses (Romao et al. 2019). The fashion industry especially luxury brands has shifted to social media and other forms of online marketing which has become an essential pivot of their trade. According to statistics, 28.8% of the Uk’s fashion sales can be attributed to online platforms which are considered a rise since in 2019 it was 20% (Romao et al. 2019). The results are an indication that social media advertising is not going to slow anytime soon but rather it is gaining traction which means more and more fashion luxury brand will shift their focus on how they can leverage of powerful capabilities offered by the social media applications. The positive impacts offered by social media advertising in terms of revenue gained and industry expansion presents lucrative opportunities for the fashion brands to explore which have ensured long-term sustainability.

Several marketing strategies are used by the luxury fashion brands such as Louis Vuitton and Gucci to promote their products online. For example, one of the marketing strategies applied on Facebook includes the conducting of in-depth marketing research in which the marketers learn information on customer behavior and how they can fit into the marketing model (Dryl et al. 2017). Conducting marketing research is key to an understanding of the customers based on their demographics and preferences which helps in establishing a marketing strategy that can fit the needs of the consumers. Facebook provides unique functionalities which allow marketers to study their target customer profiles and develop a message that resonates with them (Dhaoui, 2014). For example, luxury fashion brands such as Dolce and Gabbana have utilized their Facebook platform to engage their followers as an approach to acquiring rapid feedback on their products (Dryl et al. 2017). The brand is known to invite famous fashion bloggers to their shows in which the information is published on their Facebook handles.  The use of this social media marketing strategy has been effective in developing a mutually beneficial relationship with the customers which has been an advantage in establishing customer loyalty and gives an additional competitive edge over other competitors.

It is also essential to develop strategies that can be implemented in evaluating the effectiveness of the social medial strategies applied as a way of providing room for further improvement. For example, one such tool which has been applied by fashion luxury brands in evaluating the effectiveness is the posting density matrix (Dryl et al. 2017). The posting density matrix is essential because it helps to provide a clear depiction of how each content posted on the platforms generates engagement with the customers. The different kinds of engagements from the users may include likes, shares, comments, and retweets. The strategy allows the brand to evaluate its position in the marketing strategy through variables such as orators, networkers, introverts, and chatterboxes which give a scale on how comparison the number of posts and customer engagement (Dryl et al. 2017). For example, an analysis of the top fashion brands such as Burberry, Hermes, and Chanel indicates that the fashion brand Louis Vuitton is the most effective in generating significant levels of customer engagement from the content they share on their social media platforms (Dryl et al. 2017). Such strategies have been applied by luxury fashion brands as a way of determining which platforms have the highest return on investment and where to shift the focus.

The figure below illustrates the results from the posting density strategy comparison of different luxury fashion brands.

Figure 3: Engagement level of Facebook users                      Source: (Dryl et al. 2017).

 2.3.1 Marketing strategies used luxury fashion brands through Instagram

One of the marketing strategies used by Luxury fashion brands on the Instagram application is through the use of geotags. The use of geotags involves the transformation of a photograph which provides the user with the ability to search the picture by tagging the picture to a geographic location (Buinac, 2015). Photos that share the same geotags are placed in the same place on Instagram which increases visibility levels hence an effective marketing strategy. Famous luxury fashion brands have utilized the power of geotags to post their products on Instagram to reach out to more people. For example, through its large following on Instagram, Gucci has been able to use geotags as a form of raising brand awareness in the photographs are posted (Pratap, 2021). These photographs act as an ideal of keeping their followers and potential customers the opportunity to be more engaged and informed on the brand’s most recent activities. The Instagram advertisement strategy implemented by Gucci is an indication of how geotags can be effective marketing strategies on Instagram (Pratap, 2021). The main advantage of using geotags as a marketing strategy is that it helps to pull the interest of users by having a brief description of the product or location. However, the quality of the pictures taken and posted should be of high quality to increase the appeal and chances of high user engagement.

Most fashion luxury brands have leveraged and taken advantage of the opportunities provided by Instagram and the different marketing strategies that they can employ to target their customers. For example, one of the strategies implemented includes campaigns that aim to gain the awareness of users and invite them to participate in activities and virtual events created by the brands (Buinac, 2015). For instance, Instagram content has grown increasingly famous as a go-to Instagram strategy for enhancing page traffic and increasing user engagement. The Instagram content strategy has been effective since they vary in how they are applied which can range from asking the participants simple questions or other activities such as tagging as many friends as possible in which there is a prize they stand to win (Buinac, 2015). Having and hosting such content and giving out winning prizes that correlate to the product or service helps in free marketing which is more likely to increase the number of followers and product sales (Khan, 2018). For example, Louis Vuitton has hosted Instagram contests in which the winners were awarded original Louis Vuitton accessories and other luxury goods (Attest, 2022). Such strategies motivate more users to participate and win such gifts which is a great marketing technique (Attest, 2022). However, one limitation of Instagram contests as a marketing strategy is that not all people will participate which might not generate the expected customer engagement.

2.4 Millennials’ purchase intention of luxury fashion through Instagram

Jansom’s 2021 evaluation of how Instagram influencers affect the interpretation of value for the millennials in Thailand in terms of their purchase decision on luxury fashion brands indicates that the influencers play a huge role. The majority of the influencers do look up to the influencers hence they are more likely to try and emulate what the influencer does and the products they use so that they can look like them or have a life similar to them. As a result, the celebrity influencers have significant sway on the millennial’s purchase intention of luxury fashion brands based on their exposure to Instagram influencers (Jansom, 2021). Research indicates that the millennials often view the influencer’s perception as the best view which implies that they are most likely to embrace these given perceptions which increases the purchase intention in the process (Jegham, 2022). Therefore, the evaluation of the influence of Instagram marketing through the use of influencers provides evidence that influencers can have the effect of encouraging more followers. The analysis also shows that Instagram has a considerable impact on how the millennials perceive value and which luxury fashion brands are more trendy and more valuable (Jegham, 2022). By using Instagram as a tool for measuring value it is clear to see how the application influences the purchase intention.

The millennials have been born in a modern and digitalized world that is characterized by a lavish lifestyle in which everything is advanced. As a result, the millennial generation showcases characteristics such as an openness to follow the latest trends which implies that this kind of generation is more likely to be easily influenced and place a high priority on the opinions of other people (Jegham, 2022). By placing a high priority on the opinions and comments of other people, the millennial generation is likely to want a high-end lifestyle as a means of gaining social approval (Semuel et al. 2019). Instagram provides the platform which suits these needs since people can post lavish lifestyles as a way of keeping up with the trend (Semuel et al. 2019). The consumption culture creates a significant influence in this case since people want the latest trends in luxury goods. Therefore, Instagram presents a unique environment that motivates millennials to purchase luxury fashion brands so that they can keep up with the lifestyle.

2.5 How the millennials engage with social media regarding luxury fashion brands

Yamawaki (2017) investigates how millennials engage with the different social media platforms concerning the luxury fashion brands. The study aimed to make a critical comparison of the consumer brand involvement of the millennials especially the luxury brands which administered a questionnaire survey for 438 respondents (Yamawaki, 2017). The results from the analysis indicate that the millennials indicate a high level of consumer brand engagement with luxury brands through the social media applications such as Instagram, Facebook, and Twitter. The information from the analysis indicates that most millennials use their social media account to get information concerning the latest fashion trends and where they can purchase their latest outfits (Vinerean, 2019). Furthermore, the millennials are most likely to do their shopping through online channels where they order and learn about the products that they are about to purchase. Social media platforms are also used by the millennials to express their feelings about luxury fashion brands.

The millennial generation is known as an active contributor to the social media activity experienced by the luxury fashion brands on their pages. For example, the millennials are the ones have share content the most while also recording high likes and searches for the different brands online (Yamawaki, 2017). As such, these activities indicate how the millennials in the UK do engage with the social media application in terms of luxury fashion brands (Vinerean, 2019). However, there is little information that is known concerning how millennials do engage with specific brands from a cross-cultural perspective (Yamawaki, 2017). In essence, it can also be argued that factors such as culture have a significant effect on how millennials from different countries engage with the luxury fashion brands on their platforms (Vinerean, 2019). Despite the difference in cultures, there is a general observation across all millennials in terms of how they engage the fashion brands. By being digital savvy, the millennials indicate a high engagement level with luxury fashion brands.