How Social Media Investments Can Increase Purchase Intentions among Consumers – A Four Step Approach Addressed Brand Managers in the Fashion Industry Part 1

October 9, 2014

Written by  Masters Student at Lund University

PART I

THE NEW ERA

The many and comprehensive developments within the technology sector are something that has had a tremendous effect on how individuals and firms live and work today (Wind, 2008). We have been able to see a new marketing era and it has become a rule rather than an exception for fashion brands to invest and focus in social media activities (Winer, 2009) where established accounts on Twitter, Facebook, Instagram, Youtube and blogs are the new common used communication tools (Phan, 2011). Even if theorists seem to advocate social media investments as a recipe for success, I know of companies operating in the fashion industry who do not know how to succeed with their social media activities. Scandinavia’s largest fashion PR agency is a good example of this, where I as an intern, early noticed the bureau manager’s lack of knowledge concerning how to manage their social media investments in order to increase purchase intentions among consumers.

This paper is therefore devoted to answer this question. By presenting relevant theory which subsequently will result in my own analytical recommendations, fashion managers will be inspired about how they can progress with their social media investments.

BRANDS, INTEGRATION AND COMMINICATION IN THE SOCIAL MEDIA

The Brand

It has been investigated among theorists that social media investments generate increased purchase intentions with consumers (Kim & Ko, 2012; Themba & Mulala, 2013; Wang et al. 2012). Even though, the customer’s intention to buy increases only if the brand achieves to deliver an added value to the customer, and even more so if the brand in question have transparent and strong values from the beginning- namely through value equity and brand equity (Kim & Ko, 2012).  Even if the fashion brand is highly present in the social media world and constantly updating and communicating in new creative ways, about 35 % of the respondents still perceive the brand as old- fashioned (Phan, 2011, example Burberry). This really demonstrates the strong correlation between a liking of a certain brand and the purchase intention. Therefore, there is no impact of social media investments on the purchase intentions if the customer does not like the brand from the beginning (Phan, 2011). Additionally, the perception a customer gets from different buzzes in the social media, is based on already existing thoughts and perceptions of the brand (Powers et al., 2012).

Recommendation #1:  Examine your brand

It is important to remember that an investment in social media activities will not increase purchase intentions if a consumer do not like the brand from the beginning, and that new information received will be based on already existing thoughts of the brand (Kim & Ko, 2012; Phan, 2011). It is therefore crucial that the brand image is the same perceived in the consumers’ eyes and in the brand manager’s. If the manager believes that the brand stands for good products and values but the reality occurs to be the reverse, the social media investments will be vain. I therefore have faith in building a clear image where the brand strives to be in the future and compare it, with the help of customer surveys, how they are perceived today. By doing this, the managers know in what areas they have to improve and where the major gaps are between the customer’s and manager’s brand perceptions. Managers must know what they have to work with and what negative rumors they might have to counter in order to be successful in their social media activities. It is essential to build a good image from scratch.

Interaction and e-WOM

The interaction and communication between consumers in the social media is something that has been investigated deeply and broadly (Wang et al, 2012). The research have contributed to the insight that  the way consumers interact with each other in Social Media forums, affect the way the consumers think in their purchase decision (Wang et al. 2012). The social media forums works as a kind of market place where the communication between individuals helps people correspond and argue with each other which further often leads to changed attitudes of brands and products (Wang et al, 2012).

A developed and established concept in the area of online communication is “e-WOM”, electronic word of mouth (Henning et al. 2004). It is a good idea for fashion retailers to invest in social integrated activities since it could be an easy way to create positive e-WOM traffic (Henning et al., 2004). Since e-WOM has been found to be a trustworthy source for information-seeking consumers, it is important that businesses in the fashion industry realize the importance of it (Themba & Mulala, 2013). Noteworthy is also that when a fashion retailer wants to intensify the spread of positive e-WOM, they must reflect upon the commitment of the customer in relation to the brand as well as the consumer’s commitment to fashion overall. If a customer is highly committed to a certain fashion brand, then his or hers engagement in social media activities in relation to that brand will increase (Wolny & Mueller, 2013). Furthermore, customers who have a high need of social interaction in general, are those consumers who are more collaborative in the social media than others (Wolny & Mueller, 2013). The more a brand manages to create a positive and comprehensive e-WOM related to the brand or to the product, the more the purchase intention from that consumer will increase (Themba & Mulala, 2013).

Communication Through Customer Reviews

Customer reviews are a part of the interaction era we experience today and are often to be found in different social media forums, in one way or another. It is important to not underestimate the impact of the reviews, since a positive customer review in some social media can affect the purchase intention among other consumers (Park et al., 2007). The reviews have a function of being both informative and recommendatory and are therefore playing an important role in the customer purchase decision process. The more and the better the reviews are, the more they have an impact on others (Park et al., 2007). One exception is consumers who are highly involved with a brand and its products. Those customers only learn and take note from it when he or she perceives the quality of the review to be rewarding (Park et al., 2007).

One could find it hard to understand that individuals, who are reading reviews online, are so credulous. It has therefore been discussed and investigated if it is good or not to reveal the demographical characteristics of social media engaged customers (Naylor et al. 2012). Does the disclosure have an impact on the purchase intentions and brand opinions of future potential customers or not? The results reveal that even if the presence of those social media involved individuals is virtual and sometimes not very active, their demographical characteristics do have an impact on another customer’s purchase intention and brand evaluation (Naylor et al., 2012). This could be an interesting angel for managers to discover in the quest to reach out to their target markets as well as in business comparisons with competitors (Naylor et al., 2012).

Recommendation #2: Create the right image

Since e-WOM is to be considered to be a trustworthy source when it comes to the consumer’s purchase decision process (Themba & Mulala, 2013), it is important for fashion managers to try to control and make sure that positive buzzes and perceptions about the brand are created and spread from the start. To spread a good brand image and to get new customers, I suggest that fashion managers should turn to their already existing customers, who are highly active in Social Medias, but also who have a strong predilection for that particular brand. In this way, the spread will be broad and the message will be positive. I also think it will be a good idea if managers additionally choose to reveal the promoting customer’s demographics, since the whole investment and activity will be even more trustworthy (Naylor et al., 2012). I believe that consumers, who experience detection and identification, are more likely to trust the reviews and also spread the buzz further. By doing this, it will attract like-minded audience and it gets easier for the fashion brand to reach out new target customers and to increase purchase intentions

END PART I

Which social media forums will be chosen and why? How can managers know if the investment has been profitable? For answers to those questions, look in part two where I also present the central conclusion.