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Millenial Experiences of Purchasing E-Commerce Luxury Goods

Info: 9119 words (36 pages) Dissertation
Published: 10th Dec 2019

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Tags: E-commerceYoung PeopleConsumer Decisions

TITLE: Can the web atmospherics improve the e-commerce luxury experience for millennials?

 

CHAPTER ONE: INTRODUCTION

1.1                        Research Background

The present dissertation aims to understand the behaviour of Generation Y, when buying luxury products, and especially, when purchasing them via online and, finally, if this cohort values the online experience that the websites offer through the web atmospherics. Thus, the research question for this thesis is: Can the web atmospherics improve the e-commerce luxury experience for millennials?

The luxury goods market has been growing for the last two decades and it was estimated by Bain (2016) to value around 250€ billion in 2016. The millennials were a big contribution for that growth (Vigneron and Johnson, 2004), as they have appeared and matured meanwhile, as luxury consumers. The democratization of luxury, as well as the share of the luxury dream, made consumers shift their minds when purchasing luxury products. Moreover, the technological advances have also led to the growth of the market as it got wider and more accessible (Schmidt et al, 2015).

This has happened because luxury got more available when entered the online platforms. However, this topic is still being discussed amongst experts because the luxury brands are still hesitant with the possibility of entering in the online world (Liu and Burns, 2013). This is caused by the fear of losing paucity and exclusivity, which are features that luxury brands should always keep their focus on. According to Okonkwo (2007) and Berghaus et al (2014), brands should enter the digital platforms and make an effort to provide an online experience to their customers but if they fail at it, that can result in a misconception of the digital interpretation of what brands were trying to do and the customers can miscarry to see the brand’s essence.

The millennials were the cohort chosen for this research due to their wider access to the new technologies and for their technology driven mind and savviness (Valentine and Powers, 2013). While this segment is growing, their purchase habits are getting bigger and more important for the luxury market as this cohort seems to have a big purchase power and due to the fact that they are the luxury consumers of the future (Lazarevic, 2012). Therefore, this is the cohort that is going to be analysed throughout this research, because they are the target market whose worth investing in, when it comes to the digital presence of the brands, since they are going to be the biggest consumers of these platforms.

The purpose of this study is to validate if the luxury experience influences the way that millennials shop, when it comes to luxury and if the web atmospherics influence that experience or not. This study will corroborate if the experience online matters or not in an age where everything is online and digital, in other words, if the response from customers to an attempt of experience is favourable. From this study, there are two possible conclusions: the online experience influences the Gen Y luxury shopping behaviour or the online experience is indifferent and the purchases are made any way and the online platforms are just a complementary retail channel (Doherty and Ellis-Chadwick, 2006).

If luxury brands enter the internet marketplace, they will be able to explore the online experience and how they can provide it to their customers. The online experience is a way for retailers to provide a pleasant experience to their customers, while shopping or browsing online, which is extremely important since pleasure and arousal mediate the influence of the online environment on customer behaviour (Pappas et al, 2014).

The British luxury brand Burberry, was one of the first luxury brands to open itself to the digital platforms, when in 2006, it decided to change its vision and focus on the millennials as a new target market. According to Straker and Wringley (2016) this has had a big impact on the revenue of the brand and Burberry profited not only financially, but also socially, as it was able to create a community of its customers, on the online world (through the digital touchpoints where it was present). Other brands such as Fendi, which belongs to the LVMH Group, only entered the online wold in 2015, when they felt like they were missing on the advances in the industry, such as capturing customer data through the new technologies (Roberts, 2015). Although reluctant, brands are being pushed to the online and to hold on with the technology advances and the customers’ needs. It is also worth to mention the case of Farfetch, the fashion tech company that started in 2008 and whose purpose is to sell luxury brands, by distributing them through an online platform that delivers a luxury experience to its customers (Farfetch, 2017). The multibrand platform has been growing exponentially and it is now taking the lead in the distribution of luxury retail products, as it was given the status of a unicorn (EY, 2016). The entrance of luxury brands in the digital interfaces will be discussed throughout this research as an example of success or fail to deliver a luxury experience to the clients.

 

1.2                        Research Rationale

The luxury market has to accompany its customers and the changes in their behaviour, to maintain the profitability and the demands of the clients, providing them an engaging experience. The implementation of the luxury retailing into the e-commerce platforms has been discussed and some authors have given already some elucidations about this subject (Dall’lmo Riley and Lacroix, 2003). However, there is still a gap in literature when it comes to the understanding of the shopping comportments and habits of the millennials in luxury e-commerce. Therefore, a primary research will be conducted, in addition to the secondary research that has been carried out, with major focus on e-commerce, online experience, millennials and web atmospherics. This dissertation will follow a mixed method approach with both qualitative and quantitative primary research. The research question of this study will be deliberated and answered throughout this investigation.

For the research of this topic, there are four terms whose definition should be addressed: luxury, online experience, millennials and web atmospherics.

A lot of research has been conducted to create a precise definition for luxury. However, there is no specific definition for the term luxury, due to its relativeness (Heine, 2012). Yet, the majority of the authors who researched this topic, agreed on the idea that luxury is perceived by the sense of power, paucity and exclusivity that offers to the luxury owners (customers), apart from its the functional side (Husic and Cici, 2009; Dall’Olmo and Lacroix, 2003; Brun and Castelli, 2013; Heine, 2012).

Secondly, to have an online experience is to have a pleasant and enjoyable involvement when vising a digital platform. This can include the layout and design of a webpage, the possibilities given by the website to browse and the level of interactivity of the online environment (Pentina et al, 2011). Research conducted has discovered that a pleasant online experience, can influence the customer to stay longer in a webpage and/or to make a purchase (Pappas et al, 2014)

The third term is referring to the millennials or Generation Y. The millennials are the cohort that was born between 1977 and 1996 (Valentine and Powers, 2013). They are characterized by being unique, technology driven by wanting everything on demand (Pew Research Center, 2010). They are the consumption generation, who is categorized by the materialistic items and it is considered to be completely different from the previous generation – Generation X or Baby Boomers (Valentine and Powers, 2013).

The last and forth term is concerning the web atmospherics. This refers to the information used to create the atmosphere of a website (Kim et al, 2015; Eroglu et al, 2007). When the web atmospherics is related to online shopping, it can include information regarding the product or ambient factors that influence the customer to have a pleasant shopping experience (Kim et al, 2015). When a client is conveyed with a positive experience through the use of web atmospherics such as colours, images and music, his purchasing intentions are likely to increase (Dailey, 2004; Kim et al, 2015).

1.3                        Aim

The aim of the present research is to assess if the online environment presented to the millennial luxury consumer can recreate the offline experience and make the consumer familiar with a luxury atmosphere within an online platform, using web atmospherics.

1.4                        Objectives

The aim of this research will be achieved by giving answers to the succeeding objectives:

  1. How can the online luxury challenge the luxury experience?
  2. Is Generation Y pro the online luxury experience?
  3. How can the potential of web atmospherics impact on the online experience?
  4. To assess whether the web atmospherics can improve the online luxury experience for millennials.

CHAPTER 2: LITERATURE REVIEW

The literature review of the following dissertation purposes to create a conceptual background to understand if the e-luxury experience, provided by web atmospherics, is important for Generation Y.  This will be done with the existing literature that is pertinent for the researched topic and will allow the reader to understand the topic better as well to follow the research properly. This chapter will also provide the definition of main concepts to this study and debate the objectives and aim of the dissertation, in order to provide answers for them.

2.1           The increase of online sales

The internet appeared in the early 90’s as a search medium but the retailers rapidly recognised the potential of this channel and how they could take advantage of it (Doherty and Ellis-Chadwick, 2010). According to the same authors, the purchasing patterns of consumers have been changing throughout the years and the online shopping is now predicted to be the most prosperous area when it comes to the usage of internet. This has happened due to the number of companies/brands that have chosen to put their businesses on the digital interfaces, as a newer way to manage sales and to present their business to their consumers (Akhter, 2012).

Figure 1 – Total E-Retail Sales Around the World (2015-2020)

eMarketer2016

Rendering to eMarketer (2016), the e-retail sales have registered a total of $1.548 trillion in 2015 and the tendency is for e-commerce to continue to grow and to reach $4.058 trillion in 2020. This results in a predictable increase of 15% from 2015 to 2020, which is a very positive growth for this market, because it would mean that the sales would almost triple.

With shown results, brands have understood that online was a positive way to do Business to Consumer (B2C) and to reach a wider target market, due to its national and international extent and for the low cost that it usually represents (Eroglu et al, 2001).

Luxury brands were no exception as they started to see the potential of the digital interfaces as another medium to do business on. However, the level of acceptance of online shopping by these brands, was more arduous, due to the fact that these brands have features and standards that they should always have present, such as the level of exclusivity and paucity associated with them (Liu and Burns, 2013). Nevertheless, to expose a luxury brand to e-commerce as an alternative medium to brick and mortar places, has to be done in a way where the balance between exposing the brand and selling products is not lost. (Dall’Olmo Riley and Lacroix, 2003).

But not all authors have the same view about the online. According to Kapferer (2000), the online shopping can be perceived either as an opportunity or a risk for luxury brands, because although some of them know how to position themselves within the virtual marketplace, others don’t and they might expose themselves in excess. Another obstacle that the luxury marketplace can face is the possibility of not being able to target and retain the customers who are not tech-savvy and who would rather purchase in-store (Kapferer and Bastien, 2012).

2.2           Luxury brands entering the online world

Luxury started to be a state of conspicuousness and opulence for which the customers liked to be perceived by. It was characterized by a certain social stratification and there were scarce the ones who actually had access to it (Kapferer and Bastien, 2012). However, that has changed over the years. A massive transformation has occurred when luxury brands decided to take the digital platforms (Dall’Olmo Riley and Lacroix, 2003; Okonkwo, 2010). The majority of brands understood the power of the technology advances and the losses that they could have if they didn’t join the online atmosphere, such as the possibility of achieving a worldwide presence (Berghaus et al, 2014).  Luxury has suffered an immense transformation when it passed from being rare, limited and only available in premium and certain geographic locations to being democratized and available to 3.58 billion of users, which was, according to Statista (2017), the number of internet wide-reaching in 2017. This resulted in a commoditization of luxury. Thus, Berghaus et al (2014) stated that this democratization can be overcome if brands know how to preserve their charm and status.

Figure 2 – The number of internet users around the world in 2017

Statista 2017

The increase in the number of internet users, positions this medium as the perfect channel to make changes, especially if luxury brands are willing to actually democratize some of its products.

But not all brands made the decision to display and sell their products online, as some of them decided to reach the digital interfaces but with a more conservative approach. Conferring Dauriz et al (2014), luxury brands and their websites can be divided in three categories:

  • Plugged in pro: luxury mono and multibrand websites, selling all the varieties of products. (ie: Yoox Net-a-Porter)
  • Selective e-retailer: luxury monobrand websites, with the restriction of selling only entry price products (ie: Hermés)
  • Hesitant Hold Out: luxury monobrand websites, with only the feature of an online showroom available. (ie: Chanel)

By choosing the level of conservativism to have on their website, luxury brands can position themselves according to the level of ubiquity that they wish to have on the digital interfaces. It is intrinsic that the level of pervasiveness of plugged in pro websites is higher than the one of selective e-retailers and hesitant hold out respectively.

Brands that weren’t prepared to manage and deliver a good virtual place to their customers, have granted the possibility of its products to be sold through distribution e-retailers. However, by doing this, they lose the control of the image conveyed to the customer (Berghaus, 2014). An example of multibrand websites are Yoox Net-a-Porter, Farfetch and Fashion Clinic who are e-distributors for luxury brands. There are customers who prefer these websites, because they can compare prices, products and brands and if they wish to have the experience in person, they can go to the monobrand physical store (Dauritz et al, 2014).

Other brands, decided to enter the marketplace by themselves, delivering to their customer a virtual experience while browsing and shopping. This way, the brand can control better the brand’s image portrayed on the internet (Radón, 2012).

2.3           Luxury online challenging the luxury experience

While the luxury market is growing, and accompanying the growth of online sales, companies need to understand their customers’ needs, in order to deliver them exactly what they want when shopping or browsing online (Straker and Wringley, 2016).

The luxury purchasing in-store is relaxing for the customers and this feeling is provided by the atmosphere created to receive the clients in-store, that portrays the brand essence and more important, its DNA (Liu and Burns, 2013). Clients have a sensory stimulation when buying in physical touchpoints and this is mainly provided by the retail environment, but also for the guidance given from the salespeople (Rohnm and Swaminathan, 2004). Therefore, luxury stores differentiate themselves by delivering a unique experience to their customers through the ambience and experience provided which is reflected in a positive response in the customer (Kim et al, 2015).

When purchasing online, clients can’t access tangible features of the products nor have the experience instore that assures the presence of the customer inside of the physical store for a higher period of time (Sullivan and Heitmeyer, 2008).  Nonetheless, conferring to Doherty and Ellis-Chadwick (2006), there is research on technology, referring that an investment in technology can contribute as much to retail margins as investing to an additional physical retail space does. The conclusion is that by investing and finding out the customers’ needs and providing them the online retail experience that they want, a positive result for luxury brands can arise from that. According to Kapferer and Bastien (2012), when selling a luxury product, a brand must add a service as well, because that is what customers expect from it. In this case, the service added is the convey of an experience.

The luxury market is frequently associated with perceptions of excellence, status, uniqueness and hedonism. The sense of ownership of a luxury product awakes feelings of exclusiveness to the consumer and satisfaction of his/her own needs (Berghaus, 2014). Therefore, luxury consumers should be able to have the mentioned feelings when visiting an online store, as they have when visiting a physical retail space. However, luxury is changing with the technological advances and so are their customers, who are seeking for more than just a luxury product, but for an authentic experience when purchasing in lavishness (Yeoman, 2010).

Given this, the luxury experience should have as major focus the pleasure, arousal and interactivity with the customers who are visiting the website, in order to retain them on the website as much time as possible (Pappas et al, 2014; Pentina et al, 2011) and to create a positive brand equity (Okonkwo, 2010). According to Pappas et al, 2014, a pleasing online experience is more likely to increase the customers sense of trust in the website and to convert it into a higher completed number of trades.

Okonkwo (2010) defended that the e-luxury experience is about the creation and delivery of an experience that is extraordinary and incomparable for each customer that visits the website. Consequently, senses have to be appealed and desire has to be fomented for the brand portrayed in the website, in order to deliver an amusing experience to the customer, which is the ultimate goal for a luxury brand when available in the digital platforms. A delightful involvement with the brand may be converted into a loyal customer, which is something that brands are struggling to maintain (Straker and Wringley, 2016).

With the technological advances in retail, customers feel free to purchase in every available store in the digital channels (Dall’Olmo Riley and Lacroix, 2003). Thus, the customer loyalty is decreasing, as well as the ability to predict recurrent acquisitions, which was something that luxury brands were always used to have – loyal customers (Lazarevic, 2012). Nonetheless, customer loyalty can be achieved through the arousal of emotions and feelings in customers (Strajer and Wringley, 2016). The same authors sustain the idea that if the online platforms are able to deliver the brand’s essence and create positive connections with customers, it will be more likely for customers to turn into loyal ones. Dagger and O’Brien (2010) agree and emphasize the idea that when customer loyalty exists, that is converted into a strong relationship between the brand and the purchaser. Therefore, the creation of solid relationships with clients, through an experience, is linked with higher trades, market share and profit (Dagger and O’Brien, 2010). Though, because the customer is hard to retain, for this to happen, brands must adapt the traditional inside out value chain to an outside-in value chain (Chevalier and Gutsatz, 2012), by adjusting to their customers’ needs.

Figure 3 – Traditional Inside-Out Value Chain

Chevalier and Gutsatz (2012)

Figure 4 – Traditional Outside-In Value Chain

Chevalier and Gutsatz (2012)

Referring Okonkwo (2010), the current luxury and online customers are looking for an incomparable experience, that is engaging for them while visiting the website. This can be done through the web atmospherics, more specifically, through the use of high task relevant cues and low task relevant cues combined.

There are Intangible features that are related to the mind of a consumer and this is perceived when facing an experience, especially an online one. An experience must produce hedonic feelings in the customer, in order to affect his attitude and behaviour towards a purchase (Okonkwo, 2010).

When the e-luxury experience is delivered successfully, brands are conveying a brand experience, by engaging the customer profoundly, instead of delivering a “user-to-monitor” experience (Okonkwo, 2010).

2.4 GenerationYandtheluxuryexperience

 

The millennials or Generation Y can be defined by the cohort that was born between the years of 1977 and 1996 (Valentine and Powers, 2013). Rendering to the same writers, they are characterized by being technology driven, practical, materialistic, individualistic, sophisticated and mature. This is a segment that has evolved from the previous generations – Baby Boomers and Generation X – who was more controlled and sceptic to change (Williams and Page, n.d). Generation X was considered to be digital immigrants, while Generation Y is recognized for being digital natives (Rolfe and Gilbert, 2006). The Millennials have developed from the previous generations, which makes them an important segment of the market to tap (Lazarevic, 2012).

This is a generation that is powerful in its consumption behaviour and the tendency is for their purchase power to increase over the years, although their impact is already important on the retail industry (Valentine and Powers, 2013). Their importance is also meaningful due to their large size and for what they represent as a cohort currently (Accenture, 2013). Still, they are a group difficult to tap due to their specific tastes and because of the differences from the previous generations – taste and actions are difficult to predict – but it is expected that this generation surpasses the former generations when spending and purchasing (Valentine and Powers, 2013; Noble et al, 2009).

The Generation Y was never as aware of the luxury market as it is today and this is a reflection of their characteristics as a cohort – they care for quality and sophistication (Giovanni et al, 2015). More than their concerns with the product itself, the millennials care for the excellence of products and values portrait by brands (Weidmann et al, 2009). This is a generation that values more the hedonic side of shopping than the utilitarian one, which the virtual platforms can convey with the use of the right features (Pappas et al, 2014).

With the improvements in technology, the consumers have changed their luxury purchasing habits and they are now more attracted to the virtual marketplace. Due to the millennials technological savviness, they are the consumers’ segment with the major empathy for the digital world (Okonkwo, 2010; Rolfe and Gilbert, 2006). Not to mention the fact that the internet offers generation Y the possibility of shopping anywhere, which is a feature that the millennials value – ubiquity is converted in convenience (Okonkwo, 2010). Another feature to reference is the fact that age can influence the online consume (Akhter, 2012). Conferring the same author, the older a consumer is, the less willing he is to adopt the new technologies and to purchase via online channels.

According to Valentine and Powers (2013), the millennials see the shopping activity as an entertaining one, with experiential aspects. The possibility to shop online can offer them the experiential aspects in a convenient way. However, the digital platforms have to be prepared for their demands as consumers, in order to provide them a pleasant luxury experience through the online.

The Generation Y is familiar with e-commerce and has expectations regarding the digital platforms and its visual aspects, engaging level and its interactivity towards the customer (Berghaus et al, 2014). Therefore, if a luxury brand wants to cater the millennials as their digital target market, it has to position itself in a way where the experience that delivers to the customers is memorable and makes them return (Chevalier and Gutsatz, 2012).

Since this cohort is individualistic, they are willing to pay more for items that are unique and with customization features, which luxury brands can provide them (Straker and Wringley, 2016). The virtual marketplace allows effortlessly the personalization of products and provides to the clients a unique experience that no other customer will have, by allowing the personalization within the online (Dagger and O’Brien, 2010). Therefore, to customize products is a way for luxury customers to engage with the brands and form relationships towards it (Pappas et al, 2014).

2.4.1      Burberry: becomingdigital

In 2006, Burberry decided to be the first luxury brand entirely digital, by investing in its digital touchpoints and developing personalized experiences for its customers, whose main target were the millennials (Milnes, 2016). The brand changed its vision and invested in the main digital platforms with major focus on the website, never forgetting who the brand was targeting – the millennials –  which means, interactivity and engaging language (Straker and Wringley, 2016). The same authors stated that from movies, music and storytelling, the brand was able to create a community of clients and to connect people through the brand’s digital engagement. This has had a major impact on the revenue of the brand, as it has grown exponentially.

2.4.2      Chic by Choice: The luxury sharing economy

As Dall’Olmo and Lacroix (2003) mentioned, luxury is desired by all but can only be accessed by a few. However, as mentioned before in this research, the market has been assisting to a democratization of luxury, which means that luxury is getting reachable for all social grades (Yeoman, 2010). This can be done either through the availability of entry products or with the sharing economy model. Because the millennials seek for individualism and for an experience alone, they are getting more responsive to the alternative consumption models, which is a substitute mean to ownership (Hwang and Griffiths, 2017). Conferring the same authors, the e-sharing business model allows the millennials to have access to the products and to the hedonic pleasure of owning them (even if it is for a limited period of time) without having to purchase them. This has been done in the luxury industry with a panoply of products, from cars, to jewellery, experiences in hotels to apparel.

In the apparel market, one of the most known players that has been providing the luxury experience to its customers by the mean of collaborative consumption is Chic by Choice. This brand allows women to hire luxury designer dresses for four or eight days (Chic by Choice, 2017).  By renting a dress instead of buying it, the customer can still be conveyed with a luxury experience, with a luxury product at 85% of the retail price (Chic by Choice, 2017). This service allows the clients to have a 24h try-on service before the event takes place, to make sure the dress meets their expectations.

2.5           The potential of the web atmospherics in the online experience

To convey a rich e-commerce experience, it is crucial for brands to create and deliver a pleasant environment and atmosphere to their customers. This can be done with the application of techniques entitled by web atmospherics (Okonkwo, 2010). They are characterized by the creation of an exclusive website environment or a webmosphere/ics (as it can also be entitled) which influences positively the subconscious of customers as well as their responses towards a website, their intent to revisit it and their purchase intentions (Kim et al, 2015; Okonkwo, 2010).

The web atmospherics are straight connected to the online experience due to the fact that they evoke to the human senses, when delivering the e-experience. However, according to Okonkwo (2010), they don’t appeal to all the five human senses because of the fact the virtual context is intangible, but they create feelings that are linked to the five human senses (sight, hearing, smell, touch and taste).

When the atmosphere of a website applies to a luxury website in specific, the best concept to be used is Luxemosphere (luxury + atmposphere). Conferring Okonkwo (2010), the consultancy Luxe Corp created this concept to entitle the recreation of a brand’s luxury environment within the digital platforms by reproducing the brand’s identity.

The luxemosphere stimulates the consumers by reinforcing the brand’s image and providing an influential website experience, that is both pleasant and engaging for them (Kim et al, 2007; Okonkwo, 2010). Therefore, if a customer has a good experience on a website, positive feelings will be awakened and the memory of the experience will be remembered (Pappas et al, 2014). This will possibly lead a customer to do repeated purchases and to become more loyal, if the web atmospherics provided meet or exceed his expectations. To conclude, luxemosphere has an influence on the emotional states of clients and positively affects their purchases (Doherty and Ellis-Chadwick, 2010).

To achieve the perfect luxemoshpere on a website, the five human senses have to be taken in consideration. The five human senses are addressed in the table below.

Sight The web atmospherics have to guarantee that the sense of sight of a customer is pleased. Due to the lack of tangible features on a website, the sight is one of the five senses that can and should be fully addressed. This can be done through the use of images and icons, colours, backgrounds, fonts and text and graphics (Eroglu et al, 2001; Okonkwo, 2010). In luxury brands, the existence of harmonized elements perceived by the sight can lead to an enhanced ambiance and the luxury consumer is more likely to be immersed by the experience consciously and subconsciously (Okonkwo, 2010; Kludge et al, 2013; Ha et al, 2007).
Hearing The lack of tangibility of a website can also be supplemented with the use of sounds, besides the sight. Audio visual techniques can help a website to build its design and ambience of a physical luxury store by providing the same environment but in a virtual way (Kim et al, 2015). The existence of sound arouses other human senses, such as the vision, smell and touch (Okonkwo, 2010). It is very important that the sound provided on the website is coherent with the image of the brand conveyed on the website and to have appropriate audio ambience in every page of the website. To have coherence on the digital platforms is crucial, for the consumer to identify the brand right away (Radón, 2012).
Smell The sense of smell cannot be portrayed nor conveyed through the online platforms yet. The only way to evoke scent in the digital interfaces is to sell products with scent, whose smell the customers are familiar with (Okonkwo, 2010). According to the same author, when customers are familiar with a product, it influences their purchase habits.
Touch The touch is a sense that cannot be fully delivered to the customer when browsing on a virtual platform. However, the use of graphics, three-dimensional views and the ability to zoom on a website, can make the customer feel closer to the products and to have the sense that he is touching/feeling the product (Kim et al, 2007; Ha et al, 2007; Okonkwo, 2010; Kim and Lenon, 2010). These features influence the customer to make a purchase.
Taste Taste is a sense that cannot be conveyed through a website. However, it can be portrayed. This means that if a brand is relying of the flavour of a product, by using high task relevant cues such as strong descriptions and images, it can convince the customer by fulfilling the intangibility of the internet (Kim et al, 2015; Okonkwo, 2010).

Table 1 – Five Human Senses for a website luxemosphere

According to Okonkwo (2010) there is a model for the web atmospherics of luxury websites, that shows the steps for which a luxury website has to go through to deliver a luxury experience to its customer through its luxemosphere. By analysing the Luxemosphere Internet Strategy Model of Okonkwo (2010), the relationship between the web atmospherics and the online experience can be drawn.

Figure 5 – The luxemosphere Internet Strategy model

Okonkwo, 2010

CHAPTER THREE: METHODOLOGY

The methodology will be used as a justification of the research methods used for the present dissertation and for a better interpretation of the literature review. Referring Zachariadis et al (2013), to select and use an appropriate research is extremely important, in order to comprehend how the investigation should be carried out. This unit is fundamental in order to provide a methodological approach to the present dissertation by gathering primary sources to understand in depth the research topic proposed. Hence, the methodology will be used to clarify, in an accurate way, the research techniques and methods used to gather data for this investigation, by addressing the following various sections.

3.1           Research Design

The research design suggests the plan that will be used by the researcher throughout an investigation (Vaus, 2001). The research design is determined according to the research question and problem formulated in the study. Thus, it works as a model undertaken by the researcher to collect data and organize the investigation, to make sure that the research question is tackled in an ambiguous way (Vaus, 2001).

This research follows the exploratory model, by clarifying a problematic and gaining different perceptions about a certain subject. In this specific study, the main goal is to validate if the web atmospherics can improve the luxury experience given by the online platforms to the millennials. Therefore, the exploratory model will provide a better understanding of the research topic and help to undertake conclusions about this subject with an in-depth knowledge.

The structure of this section is as it follows: research paradigm, research philosophy, research approach, research strategy, data collection and data analysis methods

3.2           Research Paradigm

Conferring Kuhn (2012), a research paradigm is a range of common beliefs that establishes the way that people conduct a research, especially researchers and investigators when undertaking an investigation. The author Guba (1990), divided the research paradigm in three categories: ontology, epistemology and methodology.

According to Guba (1990), the research paradigm chosen for a study is conditional to the beliefs and views of the investigator that is undertaking the research, by reproducing his intentions for the investigation (Sobh and Perry, 2006). It is important to outline a research paradigm, because not all the same researches have the same views of the world and it is crucial for the community to share views and convictions (Guba, 1990; Greener, 2008)

3.2.1      Research Philosophy

Due to the exploratory model chosen for this research, the research philosophy that best suits this topic of study is the Critical Realism. Conferring to Saunders et al (2012), this philosophy believes that the world where human beings live and the world as a planet cannot be separated. The Critical Realism theory views an independent reality from what is thought and perceived by the humans (Bhaskar et al, 1998). Consequently, the society might be composed by individuals but they can only assimilate what happens in it if they accept the existence of a framework that can’t be seen (Bhaskar et al, 1998). This means that things exist apart the human’s experiences and knowledge.

This is a philosophy that is against the positivism and constructivism. Nonetheless it requires ontology for a phenomenon to be understood, which in this specific case is the ability to express and comprehend apart from the human thoughts and language (Bhaskar et al, 1998)

The Critical Realism philosophy assesses if the reality behind the arguments given was previously investigated (Bhaskar et al, 1998). Thus, it fits the research topic, because to assess the validity of the luxury experience in the online platforms through the web atmospherics, there must be an earlier veracity to proof the legitimacy of this phenomenon.

The measurement can be made with industry experts and consumer behaviour, through surveys.

The experts are unquestionably influent people in the industry who can share their thoughts and knowledge about the online platforms and its possible connection with the luxury experience through web atmospherics. However, each expert may have its own interpretation and due to the qualitative nature of the research, total accuracy cannot be guaranteed. Referring Roberts (2014) The dialectical approach for the qualitative research can provide answers to one of the most known criticisms of the Critical Realism: critical realists have struggles in studying ordinary qualitative dilemmas faced by people daily.

Moreover, the consumers – Generation Y – can portray its shopping behaviour and needs by the mean of quantitative methods. The quantitative research was used to describe the phenomenon investigated in this study and to produce explanations to corroborate the theory proposed.

3.3           Research Approach

When conducting a research, either an inductive or a deductive approach can be addressed, regarding the type of study the researcher wants to accomplish.

Alongside with the Critical Realism Philosophy mentioned above in the research philosophy section, an inductive “bottom-up” approach will be addressed in this study (Ketchen & Bergh, 2007), which is commonly used when there are still ideas that haven’t been address about the topic of research.  By using induction throughout this research, the intention is to address the gap in the luxury market, referring to the e-luxury experience for the millennials, with an exploratory approach, that is characteristic from inductive reasoning (Saunders et al, 2012).

The deductive reasoning or “top-down” approach it will be rejected from this study because of the absence of hypothesis (Saunders et al, 2012). In the running of this research, no hypothesis will be verified. In the run of this study, literature about the topic will be gathered in order to further investigate the subject and other data will be gathered though primary research (in-depth interviews and questionnaires).

3.4           Research Strategy

When gathering information for a study, researchers can make use of a variety of methods to gather the wanted data for the research. According to Saunders et al (2012), to gather data from primary sources is important in order to attain the aim of the proposed research. The primary research of an investigation can either be qualitative, quantitative or mixed (both qualitative and quantitative), depending on what the is the main goal for the researcher to find with the study (Creswell, 2014). On the one hand, regarding the qualitative method, there is more objectivity in the answers and therefore it involves interpretation. On the other hand, concerning the quantitative approach, because the results are numerical, it is a more subjective strategy (Saunders et al, 2012). With a mixed method approach, the most significant topics in a research are usually addressed.

The research strategy chosen for the present dissertation was a mixed-method. It comprised primary research by including both qualitative and quantitative data. The qualitative data was gathered in the form of in-depth interviews with industry experts, in the luxury and web design field. With regards to the quantitative information, a structured questionnaire was diffused, via social network.

 

By using a qualitative approach, it can be assessed if the luxury experience can fit within the online world and how do brands and experts see that insertion to take place within luxury websites. Whereas with the quantitative data, the study can interpret the acceptance and wish for the luxury experience by the millennials when visiting online luxury platforms, by generalizing their answers (which goes in line with the inductive approach). By using a mixed method, this research will help to tackle the gap found in the secondary data (literature) by providing information about the online luxury experience, by showing the validity of this theory.

3.5           Data Collection

When conducting a research, it is crucial to select a suitable data collection method and that this technique is in line with the aim of the research (Saunders et al, 2012). Therefore, given the aim of the present research, it was necessary to combine methods of research. This resulted in having a primary data collection with qualitative and quantitative data and secondary data collection which helped to gain a better knowledge of the research topic and to outline the research gap.

 

3.5.1      Primary data collection

A primary research was conducted in the mean of semi-structured in-depth interviews to industry experts and structured surveys that were disseminated. The objective of the primary data collection is to contribute with new outcomes about the research topic.

3.5.1.1            Online Self-Completion Questionnaires [visit appendix 2 for survey questions]

Structured questionnaires were disseminated as quantitative primary data in order to understand the millennials consumer behaviour when shopping online for luxury products. The main goal with the surveys was to understand the preferences of Generation Y when purchasing a luxury product and facing an e-luxury experience. To have a significant sample and a better representation of the millennials as a generation, it is required a noteworthy number of at least 100 respondents (Saunders et al, 2012).

With a better understanding of the consumer patterns of purchase and their likes and dislikes when buying within online luxury platforms, answers are provided in order to meet and achieve the objective 2 –  Is Generation Y pro the online luxury experience? This method is also an effective and not dispendious way to gather information, if done via online, which was the case (Patten, 2014).

The questionnaires were used as a survey with self-completion questionnaires where all the questions were close ended questions and agree/disagree question. The Likert scale was used for scaling responses.

This quantitative method was the easiest, fastest and the less expensive way of conducting surveys amongst a large number of people, in order for the sample to be representative. In total, 102 responses were gathered.

3.5.1.2            Semi-Structured Interviews [visit appendix 3 for interview questions]

To conduct interviews with experts as a mean of quantitative primary research is important, in order to gather reliable and credible information from specialists with knowledge in the research area (Saunders et al, 2012). According to the same author, this approach purposes to contribute with insightful data for the study and to provide a better understanding of frameworks related with the research question.

Depending on the scope of the study, there are three types of interviews than can be performed: structured, semi-structured and unstructured interviews. In the present research, semi-structured interviews were used, when conducting Face-to-face (FtF) interviews. This approach was chosen due to the type questions asked to the experts and the way the interviews were conducted. During the interviews, the questions were presented to the specialists, but they were allowed to answer more than the specific answer to the question and throughout the interview, additional questions were added, while the conversation was flowing.

By using in-depth interviews to collect data, the aim was to understand the luxury brand side and its positioning when it comes to the luxury experience within the online platforms. With the insight provided by experts, it is more feasible to validate a theory because it is possible to understand better the luxury brand’s motivations on how to position themselves or not as brands who convey luxury experiences within online platforms.

The interviews were part of a process as a whole. The experts had to go through a selection phase, where the most suitable specialists were chosen due to their job occupation and proficiency level. Three industry experts were interviewed and their insights are influences in the market as they work for brands within the luxury industry, to luxury websites to luxury software engineering. All the three interviewees were approached via telephone.

Each industry expert had a set of questions prepared specifically for him, due to his level of expertise and profession, in order to provide accurate expertise and knowledge to the present research. In FtF interviews, audio record was necessary and respondents were informed and gave permission for it, in case a transcript of the interview was necessary to be done after. Concerning their identity, all interviewees were informed about their animosity throughout the research and by signing the consent they were agreeing with it.

Interviewee Role
A Former CTO at luxury website (web developer)
B CEO of luxury e-commerce website
C Former media relations and events coordinator at luxury company

Table 2 – Semi-structured interviewees candidates

3.5.2   Secondary data collection

Secondary data is the information that has been previously collected by other researchers and that is beneficial as it was already formerly studied. The secondary data can be found in the form of academic journals, books, industry reports and articles. For this specific research, all the previous types of secondary data were used, as ones were more precise in determined areas than others (i.e: reports are more accurate in numbers that academic journals).

The goal of the present research is to tap the gap in literature. Nevertheless, the existent literature provided useful and valuable information that contributed for the level of familiarity with the research topic, but it did not present all the information that was necessary for the study.

In the results section, the material found in the secondary data collection will be gathered, analysed carefully and assimilated along with the results of the primary research. This congregation will form a more a more accurate data in which the main goal is to cover the gap existent in literature.

3.6           Data analysis methods

After conducting primary research in a mixed method approach (both qualitative and quantitative), all data was carefully and critically analysed and interpreted in order to create useful information for the present research, to be further discussed. It is crucial to analyse the results gathered from primary data, in order to connect it with the research question and cross information, in order to come up with conclusions.

Referring to the qualitative data, the interviews were audio recorded, analysed and a transcript of the audio was made to have a written record of the interview. Concerning the quantitative methods, the questionnaire was conveyed via Google Forms and the results extracted from it were analysed in the form of graphics.

For the analysis, the objectives and aim were revisited, in order to understand what information was relevant and appropriate in order to further answer the research question.

3.7           Ethical Issues and Research Limitations

The present dissertation is written according the ethics standards of an academic research. To ensure the use of ethical methods throughout the research, when conducting the primary data collection, all participants (both from the questionnaire and the in-depth interviews) were assured to be kept anonymous and that data withdrawal from the surveys and interviews would be only used in favour of this study.

In the case of the in-depth interviews, the process used to guarantee the ethical research was to provide the experts with an informed consent form, where the nature and purpose of the research was explained, their anonymity was guaranteed throughout the whole study, as their identity was replaced by pseudonymous. Also, they were given the chance to withdraw themselves from the study at any time if that was their willing to. Moreover, the specialists who contributed for the research by giving interviews, volunteered themselves to help with the present study and before their contribution to the research was set, they were given details about researcher that was conducting it.

Every research has limitations in its run. Concerning the limitations of the present one, the major one found was the restricted time available to proceed with the research. If more time had been given, the survey could have reached more people online and the sample size taken from the surveys would have been bigger, which would increase the validity of the sample. Another limitation faced is the fact that respondents from the questionnaire might not have been honest with the answers given. However, that is a limitation that difficulty can be defeated because the respondents are free to answer what they wish to answer. Regarding the in-depth interviews, to reach and meet industry experts is not always easy, especially when there is a time constraint. Last but not least, there was one of the interviewees which asked for the interview to be conducted in Portuguese and all the process was prepared to be done in English. This was a limitation because I had to come up with a solution, within the time prior to the interview.

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