Conclusion & Discussion

This section discusses the contribution of the findings to brand management theory. Furthermore, the managerial implications and the limitation of this study will be highlighted, and future research opportunities proposed.

7.1 Conclusion

To explore whether Gen X and Gen Y influence the brand equity of luxury fashion brands, we developed a model that synthesizes the theoretically derived CBBE measurement scale based on Aaker (1996), Keller (2009) and Baalbaki and Guzmán (2016) with our data analysis. The findings reveal that the CBBE of Louis Vuitton, the focal brand of this study, can be summarized under four drivers (authenticity, brand image, brand associations and socialization), one moderator (personal values) and two outcomes (brand awareness and customer attitudes).

Within these parameters, the strongest differences between generations were found to be in the perception of uniqueness and exclusivity (authenticity), planning behavior and service preference (brand image), social perception (socialization), lifestyle (personal values) and their willingness to pay (customer attitudes). Accordingly, the generational shift is found to influence three out of four drivers of CBBE as well as the moderator, ultimately affecting the outcomes of CBBE due to differences in customer’s different perceptions of the brand on certain parameters.

On the other hand, similarities were found between the generations as well. These include the generations’ feelings towards logo visibility (authenticity), usage frequency and shopping behavior (brand image), formation of brand memories and feelings (brand associations), low involvement in sustainability (personal values), awareness and brand dominance (brand knowledge) and their preference for the brand (customer attitudes). Thereby, this research suggests the existence of specific parameters which lead to a differential effect on CBBE creation of luxury fashion brands among Gen X and Gen Y. At the same time, other parameters were found to not be affected by the generational shift of luxury consumers and, therefore, do not lead to differences in CBBE. This has significant implications for both the theoretical and managerial contributions of this study.

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7.2 Theoretical contributions

Scholars widely acknowledge that the changing and evolving luxury consumer poses a significant challenge for luxury brands (Gutsatz & Heine, 2018), highlighting the importance of customer-centric brand strategies (Okonkwo, 2007). Overall, this research contributes to brand management literature as it shows how segmenting customers into generational cohorts can be a useful tool for luxury fashion brands when creating brand strategies. More specifically, the derived CBBE model enables the detection of generational differences by pointing out specific parameters which have a differential effect on CBBE, and which should, thus, be addressed in the branding strategies of luxury fashion brands.

Furthermore, this research contributes to filling the gap of research on Gen X, which is often overshadowed by the more numerous Gen Y and Baby Boomer generation in generational studies (Connaway & Radford, 2011; Parment, 2013; Beauchamp & Barnes, 2015). Three concrete theoretical contributions ought to be highlighted.

First of all, the findings confirm that luxury branding requires a different set of CBBE measurement scales than traditional brands. In line with Keller (2009), this study highlights the importance of brand imagery and brand associations for luxury brands, as luxury is built on intangible aspects. Moreover, uniqueness, heritage, user types, experiences, and brand feelings are identified as essential drivers for the formation of CBBE of luxury fashion brands, which confirms Keller’s (2009) findings. However, the results also emphasize that some traditional measurement scales are not applicable in the given context. For instance, preference was argued to be more revealing for the customer attitudes than the loyalty parameter proposed by Aaker (1996). Hence, the argumentation that luxury brands must be exclusive and display high levels of sales and loyalty, as illustrated by Phau and Prendergast (2000), has not been confirmed in this study. Instead, respondents argued that high levels of sales diminished their perception of the brands' value which is in line with the concerns voiced by Keller (2012) in relation to the democratization of luxury and the inherent loss of rarity. Despite a lack of perceived exclusivity, respondents still indicated their preference for LV.

Secondly, this study proves that generational cohort segmentation based on values is a useful approach to analyze the customer of luxury fashion brands. The values of the two generations were found to play a moderating role in the formation of CBBE, which highlights that individuals’ held beliefs strongly affect their luxury value perceptions as proposed by Wiedmann et al. (2009). Furthermore, as suggested by Hellevik (2002), two different perspectives on why age groups exhibit differences in value orientation were found: 1) life cycle effect and 2) cohort effect. For instance, affording the brand can

112 be ascribed to be a lifecycle influence, as it is likely connected to Gen Y’s budget constraints experienced as students. On the other hand, Gen Y's desire for individuality is argued to be a generational cohort effect supported by Williams and Page (2011), arguing that Gen Y is a self-indulgent generation. However, this distinction cannot be easily made for all parameters, as it is difficult to differentiate between what is caused by life stage or values imprinted in the cohort.

Thirdly, this study confirms that individual luxury value perceptions of different generations entail relevant insights into the creation of CBBE of luxury brands. Furthermore, these value perceptions influence several of the identified CBBE parameters of luxury fashion brands outlined in our model.

The most pertinent influences are highlighted below.

Relating to authenticity, individuals refer to the classical side of the brand that appear as a strength for some Gen Y members, whereas for others, it creates a generic image. The difference between respondents in that regard can be related to the challenge of balancing heritage and modernity, as described by Kapferer and Bastien (2012). Furthermore, timelessness and long-lasting quality are correlated concepts for the respondents. Thus, brand heritage does not only translate into a timeless product design but also creates a timeless brand that does not diminish in brand value and therefore justifies higher prices charged. Both generations perceive LV as consistent and stable which is in line with Okonkwo (2007), who argues that innovation should only be achieved through re-interpretation that links tradition with modernity, placing high importance on maintaining a consistent core in terms of products and brand image over time. A key finding related to authenticity is that Gen Y fears to be mainstream and perceives LV’s increased accessibility as particularly detrimental to their perception of exclusivity. As exclusivity is one of the core features of luxury brands (Kapferer, 1998), a lack of it is likely to diminish the brand’s CBBE.

In brand imagery, it ought to be highlighted that the two generations differ in their purchase planning behavior. While only one Gen X member engages in impulse purchases and cohort members usually plan their luxury purchases in advance, many Gen Y members purchase items impulsively. The engagement in impulse purchases can be related to Tucker (2006), who argues that Gen Y has an inability to delay gratification. Furthermore, Hennings et al. (2015) contend that customers increasingly engage with luxury brands on social media and shop online, which the findings confirm. However, only a few respondents argue that they would purchase luxury online, and everyone highlights the importance of the in-store experience and service. Hence, findings reveal that individuals use the internet to search

113 for product information or better prices. However, the store is likely to be the central conversion point for both Gen X and Gen Y.

In terms of brand associations, a breach with the theory is found. Whereas Kim (2019) argues that Gen Y assigns stronger emotional attachment to luxury items than Gen X, our findings highlight that brand feelings and memories are similar between the two generations. Although a slight difference can be seen in Gen Y connecting luxury to a sense of achievement, while Gen X connects it to elegance, they were both found to have comparable emotional attachments with regards to intensity and emotional involvement.

Socialization is one of the parameters with considerable differences between the two generations.

Whereas Gen X cares about who else is wearing the same brand and is inspired by their peers, Gen Y prefers to not display the brand logo too obviously and looks up to celebrities and influencers for inspiration. Therefore, it can be concluded that it is more important for Gen X to convey an affluent lifestyle than it is for Gen Y (Seo & Buchanan-Oliver, 2019). Eastman and Liu (2011) argue that status consumption for both Gen X and Gen Y is high. However, this is not directly supported by our data, as all respondents spoke about status consumption only in the third person, never directly admitting that they personally care about social status.

Furthermore, whether belonging to affluent networks is of importance differs between individuals rather than generations. That individuals form groups based on similar conspicuous consumption patterns, as proposed by Berg and Clifford (1999), is only supported by two out of sixteen respondents. More precisely, most respondents do not speak openly about their consumption with peers. For Gen Y specifically, many individuals even try to hide the brand to a certain extent. For Gen X respondents, it can further be concluded that the internalization of social norms about luxury consumption results in taken-for-granted rules, as suggested by Seo and Buchanan-Oliver (2017). For instance, Italian consumers often refer to their country norms when speaking about why and how they consume luxury, pointing towards the influence of cultural differences.

The personal values moderator finds that Gen X are often pressured to shop efficiently due to time constraints, while they value fashionability for the sake of portraying a particular image to their peers.

Interestingly, this is in line with Littrell et al. (2005), namely that Gen X bases product selection on fashionability and less out of a concern for quality or product authenticity. Connecting this to the socialization driver, it is evident that Gen X cares a lot about how peers and society perceive them and

114 their products. In contrast, findings reveal that Gen Y members are more self-centered in their approach to both fashionability and the use of time. They highlight the importance of individual style and having enough time for themselves. This is connected to Williams and Page (2011), who argue that Gen Y is a sophisticated and self-indulgent shopper that desires brands that are similar to the individuals' ideal self.

This can be linked to the fact that Gen Y is inspired by celebrities rather than peers such as Gen X. Gen Y's ideal self is portrayed by influencers or celebrities, hence, to transform to their ideal self, they purchase the items of their role models. Importantly, both generations do not consider sustainability when purchasing luxury. Thereby, it contradicts many scholars that claim that consumers, especially Gen Y, increasingly emphasize values such as sustainability, requiring luxury brands to act in an environmentally and socially responsible way (Gutsatz & Heine, 2018, Eastman & Liu, 2011). Even though all respondents argue that sustainability, especially social sustainability, is essential, most do not consider it when making luxury purchase decisions.

Lastly, the outcomes of CBBE, namely, awareness and customer attitudes, are relevant. They reveal that the meaning of luxury is no more stable or predictable but "disrupted, subjective and personalized"

(Seo & Buchanan-Oliver, 2019, p.414). Whereas awareness is high, and the brand is perceived as dominant by both generations, the same is also argued to diminish exclusivity and hence desirability.

The customer attitudes are disrupted, subjective and personalized. Gen Y’s preference for the brand depends mainly on the perceived exclusivity and individuality of the brand. Gen X, on the other hand, perceives their social reference group as a crucial factor. Outcomes of these customer attitudes are found to result in preference and willingness to pay. Both Gen X and Gen Y are not loyal to the brand, which is in line with theory (Gurau, 2012; Bergh & Behrer, 2016). Regarding their willingness to pay, Seo and Buchanan-Oliver (2019) argue that consumers can invest in luxury brands as a justification for the high price. This behavior is supported by seven out of eight Gen Y members, whereas only one Gen X member mentions luxury as an investment. This is connected to the emphasis on classic and timeless products, which thereby obtains a new significance for Gen Y.

7.3 Managerial contributions

For luxury fashion brands, it is particularly important to stand out from the competition and remain relevant to customers through effective branding strategies. This requires profound knowledge of an increasingly demanding and changing luxury customer. The results of this study lead to several practical implications for the development of luxury branding strategies by anticipating the generational shift

115 from Gen X to Gen Y. These implications are aimed at supporting luxury brand managers in appealing to current customers and simultaneously attracting the luxury customer of the future. Consequently, they support luxury brand managers in tailoring their branding strategies to meet the demands of their changing customer base. At the same time, it can facilitate the creation of strong CBBE in the present and future and likely lead to a competitive advantage.

The most prevalent task for luxury brands appears to be centered around finding a balance between growing the brand and maintaining a feeling of exclusivity and uniqueness among its customers. At the same time, luxury brands need to take into account the personal values of Gen X and Gen Y as well as their reasons to consume luxury goods. By addressing these issues, the practical implications resulting from this study can be broadly categorized into the four P’s of marketing – Product, Place, Promotion and Price. While these suggestions serve as an indication on how to approach the different generations, they should not be seen as exclusively applicable to one generation only.