Social Media Marketing in Luxury Retail

Introduction

The market for all types of luxury goods has been prospering in the last few decades (Truong, 2010). In 2008, the luxury goods market was valued to reach $1 trillion by 2010- a 16% increase from its estimated value in of $840 billion in 2004 (Truong, McColl, & Kitchen, 2009). In segregating the luxury fashion market, growth is also substantial with an estimated market value exceeding $130 billion in 2007 (Fionda & Moore, 2008). This kind of development in the luxury goods market, and the luxury fashion market in particular, may be attributed to factors such as improved unemployment rates, additional disposable income and the growth of the middle class in various countries (Truong, 2010) specially China. The Chinese luxury retail market is of particular note as it is one of the largest consumer markets in the world, noted by The Economist (2014) as being “one of the world’s most sophisticated consumer markets, heavily skewed towards expensive goods” and unique in that it has many online shoppers, with 689 million Internet users in China alone, according to Jones (2014).

The substantial growth in the luxury fashion market warrants a consideration of how advertisers and marketers modify their marketing strategies to promote development. As can be expected in today’s digital world, many companies are turning to social media in order to promote their products. Social media has the advantages of connecting users, and has the ability to share existing or user-generated content from such platforms as social networking sites (SNSs), podcasts, blogs and other channels (Hensel & Deis, 2010).