UNDERSTANDING ONLINE CONSUMPTION BEHAVIOUR AND PREFERENCES IN A FASHION CONTEXT IN ORDER TO ATTRACT CUSTOMERS TO A WEBSHOP Characters: 175.735 Supervisor: Joan Pape Rasmussen Master of Arts in Corporate Communication – March 2013 Aarhus School of Business and Social Sciences – Aarhus University By Eva Lund Hansen Afhandling/Master Thesis Indlevering af afhandling på Cand.merc., Cand.IT, Cand.ling.merc. og HD-studier / Delivery of the Master Thesis for the Master programmes Der afleveres til Studieadministrationen / To be handed in at the Registrar’s Office: - en kopi af indberetningskvitteringen fra Theses@asb / a copy of the receipt from Theses@asb - 2 trykte eksemplarer af afhandlingen / 2 printed copies of your thesis - 2 udfyldte eksemplarer af denne formular / 2 filled in copies of this form HD-afhandlinger afleveres på samme måde til instituttet / Likewise, Graduate Diploma theses are to be delivered to the Department. Titel (brug venligst blokbogstaver) / Thesis Title (capital letters) HUSK - også titel på fremmedsprog - kun for CLM / REMEMBER – Title in the foreign language – only for CLM UNDERSTANDING ONLINE CONSUMPTION BEHAVIOURS AND PREFERENCES IN A FASHION CONTEXT IN ORDER TO ATTRACT CUSTOMERS TO A WEBSHOP Evt. undertitel / Subtitle Emneord / Subjects (min. 3 words) ONLINE RETAILING RELATIONSHIP MARKETING FASHION CONSUMPTION BEHAVIOUR Opgaveløser(e) / Author(s) NAVN / NAME STUDIENUMMER / STUDENT NO NAVN EVA LUND HANSEN E-MAIL 283419 STUDIE / STUDIE E-MAIL / STUDIE STUDENT NO VEJLEDER / COURSE / NAME STUDIENUMMER MACC E-MAIL STUDENT NO NAVN / COURSE / NAME STUDIENUMMER evalundhansen@yahoo .dk / INSTRUCTOR BIVEJLEDER / CO-INSTRUCTOR JOAN PAPE RASMUSSEN VIL DU TILLADE ONLINE ADGANG VIA BIBLIOTEKETS DATABASE INSTITUT / DEPARTMENT INSTITUT FOR ERHVERVSKOM. JA / YES NEJ / NO / WOULD YOU PERMIT ONLINE ACCESS FROM THE LIBRARY DATABASE / COURSE X X Udfyldes af instituttet / To be filled in by the department DATO OG UNDERSKRIFT SIGNATURE / DATE AND LOKALE CENSOR / PLACE DATO / DATE KL. / HOUR / EXAMINER Business and Social Sciences Aarhus Universitet Tåsingegade 3, building 1443, room 021 DK – 8000 Århus C Tel. 871 64026 E-mail: studieadm@asb.dk Abstract – Executive Summary Since the beginning of the 1990’s the technology of the Internet has undergone a rapid growth and in the past 10 years the online commerce industry has gained popularity as well. Many businesses have started incorporating e-commerce into their repertoire of services in order to serve their customers 24/7. These societal changes have changed the consumption behaviour of consumers and increased the competition in the online environment. Accordingly, contemporary consumers have become multi-channel customers, who define and construct their desired identities through consumption, and use social media sites or communities to brand themselves or their “ideal” selves. In the dynamic environment of the Internet both companies and consumers are active participants in the creation of brand meaning. The Internet has changed how consumers relate to brands, and companies now focus on building consumer-brand relations online, in order to engage in dialogue with customers and learn about their preferences. Hence, the marketing practice has become more customer centred. Marketers have increased their emphasis on long-time client relationships, because loyalty and stronger consumer relations are associated with a greater degree of crossbuying, a more significant level of transactions online, and consequently higher profits. Maria Black Jewellery (MBJ)1 is a Danish jewellery brand that constitutes the exploratory case study of this thesis. The brand is primarily sold via offline retailers, however, the company would benefit much financially if it could attract and win over customers to buy directly from MBJ’s own webshop. Despite the fact that current retailing trends show a shift from traditional retailing to an increased use of the Internet, many consumers still prefer the “real experience” of going to a store and trying things on before they decide on a purchase. The fact is, that consumers have different informational needs when shopping on the Internet. Understanding consumers’ motivations to shop fashion items online is of major importance for a company offering e-commerce in order to make adequate strategic marketing decisions. Effective marketing strategies are especially important in the fashion sector due to a highly competitive marketplace and changing business environment. This thesis is therefore motivated by investigating which factors that can be instrumental for a fashion brand like MBJ in gaining more customers for their online webshop. Fashion items like jewellery are high involvement products. People care about what kind of jewellery they buy, as they play an important function in the symbolic interaction with consumers’ emotional experiences in market environments. In the theoretical foundation of the study, it is found that MBJ must signify the brand and imbue it with a strong symbolic meaning, beyond its utility of just looking pretty, in order to appeal to postmodern consumers. It was also 1 Referred to in plural. found that whether consumers buy these items in a store or online is mainly dependent on convenience and that trust is critical in online transactions. Additionally, the theory suggests that building relational bonds online via social networking sites and brand communities could be ways to gain customers for a company like MBJ. Subsequently, the empirical purpose is to investigate what it is that drive consumers to shop for fashion items online versus offline, and how a company like MBJ can build consumer-brand relationships online. The empirical research clarified that MBJ need to focus on several other factors than just building good consumer-brand relations online, as the participants of the focus group were very descriptive in their minimum requirements they believed an online webshop should meet, before whey would even consider making a purchase. In addition, the analysis found that MBJ have succeeded in establishing a brand identity and image as a cool fashion brand, offering the postmodern consumers interchangeable pieces that can be mixed and matched, creating an attractive brand identity that consumers want to engage with. The analysis also identified three potential new segments that could become online customers in the future, besides the target group of fashion conscious women between 20-40 years old, if MBJ directed individual marketing communications toward these consumers. The thesis reaches suggestive answers and provides recommendations that MBJ could initiate to gain more online customers. The study suggests that MBJ must build consumer-brand relations online via Facebook, an online platform named the MBJ Universe, and by strategic use of bloggers. Furthermore, the company should make use of selective distribution to create brand awareness offline. MBJ should also leverage on the interactivity potential of the Internet and make the webshop more relational, and implement features that can provide the online customers with an “added value”. Finally, loyalty programs in the form of cost-saving initiatives, like offering discount codes and free shipping would also appeal to a large segment. Characters: 4.387 Preface Maria Black Jewellery (MBJ) constitutes the case study in this thesis, however, the research is by no means “ordered” by the company. The motivation for choosing the topic of how a fashion company can gain more customers online, is due to the fact that I in 2012 started my own hobby business – a webshop where I sell handmade jewellery. Shortly after the webshop opened I experienced how difficult it is to attract and win over people to buy online from a newly established webshop. Furthermore, I was surprised to discover how much of the profit the stores claimed before they would retail the items. It got me thinking about how other design companies overcome these challenges in their start-up years. Consequently, the topic of online fashion retailing and the issue presented in the study have intrinsic value to me. Finally, during my five years of study I have always been characterised as a student who likes to approach issues from a practical stance, and I still am. The fact that the findings can be applied and made used of in real life is a paramount motivation for me. Writing the paper has been a very exciting and educational experience. I hope you enjoy reading it.