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Dissertation on Social Media Advertising Practices in the Fast Fashion Industry: A Study of H&M and Zara

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This dissertation analyses the effect of the social media advertising strategies employed by Zara and H&M on customer reactions such as purchase intention and brand loyalty. Three social networking services, namely Facebook, Twitter and Instagram have been selected for the purpose of this study. Primary data was collected from 100 customers of Zara and 100 customers of H&M by means of self-administered questionnaires. In turn, secondary data was obtained from websites, empirical articles and journals. The research findings suggest that social media advertising strategies have a more considerable impact on customer loyalty and attitudes comparing to traditional media. There is a strong correlation between Zara’s and H&M’s social media strategies such as display ads on Facebook and photo posting on Instagram and consumers’ intention to buy. Furthermore, consumers’ loyalty to the fashion brands is predicted by video posting on Instagram and Twitter. The lack of generalisability is the key limitation of this project since its outcomes are only relevant to Zara and H&M. The researchers who investigate social media advertising and its impact on consumer behaviour may be interested in this dissertation.

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Dissertation on Social Media Advertising Practices in the Fast Fashion Industry: A Study of H&M and Zara

  1. 1. 1 ______________________________________________________________________________ Social Media Advertising Practices in the Fast Fashion Industry: A Study of H&M and Zara By Amresh Pratap Yadav Student Id: 159043191 Supervisor: Dr. Dimitrinka Atanasova Department of Media & Communication University of Leicester Dissertation submitted for the degree of MA – Media & Communication 2015/16
  2. 2. 2 Abstract This dissertation analyses the effect of the social media advertising strategies employed by Zara and H&M on customer reactions such as purchase intention and brand loyalty. Three social networking services, namely Facebook, Twitter and Instagram have been selected for the purpose of this study. Primary data was collected from 100 customers of Zara and 100 customers of H&M by means of self-administered questionnaires. In turn, secondary data was obtained from websites, empirical articles and journals. The research findings suggest that social media advertising strategies have a more considerable impact on customer loyalty and attitudes comparing to traditional media. There is a strong correlation between Zara’s and H&M’s social media strategies such as display ads on Facebook and photo posting on Instagram and consumers’ intention to buy. Furthermore, consumers’ loyalty to the fashion brands is predicted by video posting on Instagram and Twitter. The lack of generalisability is the key limitation of this project since its outcomes are only relevant to Zara and H&M. The researchers who investigate social media advertising and its impact on consumer behaviour may be interested in this dissertation.
  3. 3. 3 Table of Contents Chapter 1: Introduction.......................................................................................................................6 1.1. Problem Statement and Research Rationale...............................................................................6 1.2. Study Background.....................................................................................................................6 1.3. Research Aim, Objectives and Questions....................................................................................7 1.4. Significance and Potential Contribution .....................................................................................8 1.5. Research Methods....................................................................................................................8 1.6. Research Limitations.................................................................................................................9 1.7. Structure of the Dissertation.....................................................................................................9 Chapter 2: Literature Review.............................................................................................................10 2.1. Introduction...........................................................................................................................10 2.2. Theories of Customer Behaviour on Social Media.....................................................................10 2.3. Social Media Advertising Strategies Employed by Fashion Retail Brands ....................................13 2.4. Effectiveness of Social Media Advertising in Fashion Retail Industry..........................................17 2.5. Chapter Summary and Conceptual Framework.........................................................................19 Chapter 3: Research Methodology.....................................................................................................22 3.1. Introduction...........................................................................................................................22 3.2. Methodological Framework ....................................................................................................22 3.3. Research Strategies................................................................................................................23 3.4. Data Collection Instruments and Analysis Methods ..................................................................25 3.5. Research Ethics ......................................................................................................................29 3.6. Chapter Summary...................................................................................................................30 Chapter 4: Data Analysis and Findings................................................................................................31 4.1. Introduction...........................................................................................................................31 4.2. Background Data Analysis.......................................................................................................31 4.3. The Effectiveness of Social Media and Traditional Advertising...................................................34 4.4. The Link between Social Media Advertising Strategies and Customer Outcomes........................38 4.5. Summary ...............................................................................................................................46 Chapter 5: Conclusions and Recommendations ..................................................................................47 5.1. Introduction...........................................................................................................................47
  4. 4. 4 5.2. Concluding the Main Findings .................................................................................................47 5.3. Research Limitations...............................................................................................................50 5.4. Recommendations..................................................................................................................51 References.......................................................................................................................................53 Appendix..........................................................................................................................................61 List of Figures Figure 1: The Meta-Theoretic Model of Motivation and Personality (3M).............................................12 Figure 2: Conceptual Framework of the Social Media Advertising in the Fashion Retail Context ............20 Figure 3: How OldAre You?(%).........................................................................................................31 Figure 4: What Is You Gender? (%).....................................................................................................32 Figure 5: How Often Do You Purchase Goods Either from Zara or from H&M? (%)................................33 Figure 6: I Am FullyAware of Zara'sand/or H&M's AdvertisingInitiativesonthe MostPopularSocial Networking Services such as Facebook, Instagram and Twitter (%)......................................................34 Figure 7: The Attractiveness of Zara's and H&M's Online and Traditional Advertising (%)......................35 Figure 8: The Impact of Zara's and H&M's Online and Traditional Advertising on Buying Intentions(%) .37 Figure 9: Photo Posting (%) ...............................................................................................................39 Figure 10: Video Posting (%)..............................................................................................................40 Figure 11: Sponsored Stories (%) .......................................................................................................41 Figure 12: Companies’ Intention to Invest in Social Media Advertising (%) ...........................................42 List of Tables Table 1: A Summary of Social Media Strategies Employed by Fashion Retail Brands..............................16 Table 2: The Variable Definitions .......................................................................................................27 Table 3: Social MediaAdvertisingStrategiesonFacebookandCustomerPurchase Intentions(Linear Regression) ......................................................................................................................................43 Table 4: Social MediaAdvertisingStrategiesonInstagramandCustomerPurchase Intentions(Linear Regression) ......................................................................................................................................44 Table 5: Social Media Advertising Strategies on Instagram and Brand Loyalty (Linear Regression) .........44
  5. 5. 5 Table 6: Social MediaAdvertisingStrategiesonTwitterandCustomerPurchase Intentions(Linear Regression) ......................................................................................................................................45 Table 7: Social Media Advertising Strategies on Twitter and Brand Loyalty (Linear Regression)..............46
  6. 6. 6 Chapter 1: Introduction 1.1. ProblemStatement and Research Rationale Social media have long been recognised as an effective advertising vehicle in a variety of industries, including fashion retail (Goh et al., 2013; Park and Cho, 2012; Schultz, 2016). Today, the integration between social networking sites (SNSs) and retailer websites is developing to achieve the previously unwitnessed degree. For example, Soldsie, a service for Facebook and Instagram, allows retailers to post their products and available quantities on these websites and customers to make a one-click purchase (Cohen, 2014). Facebook Messenger can now be used to place supplementary orders and ask for more information directly from the retailer (Tsukayama, 2015). Finally, Facebook has added the “buy” buttons that enabled to order the products within Facebook ads themselves and pay with the linked credit card (Koh, 2015). These important changes in the online retail landscape call for more up-to-date research on which advertising strategies should be employed by companies on social media to maximise consumer outcomes. Now that the customer can order the product directly within a Facebook ad, effective social media advertising has an even greater potential to build sales and brand loyalty (Tweney, 2014). This project aims at addressing this new research problem by establishing the impact of the social media advertising practices adopted by Zara and H&M on customer purchase intention and brand loyalty. The results of this research can enhance the current knowledge of the ways in which social media advertising can influence consumer behaviour in the fashion retail context. 1.2. Study Background H&M and Zara are two of the largest brands in the global fast fashion industry. Zara belongs to the Inditex Group along with a range of other famous brands, such as Massimo Dutti, Pull&Bear and Bershka. Zara’s retail network includes 2,100 stores in 88 nations worldwide (Inditex, 2016). Originating in Spain, Zara has developed into a truly global brand with a “responsible passion for fashion across a broad spectrum of people, cultures and ages” (Inditex, 2016, p. 1). In 2014, Zara’s global sales reached EUR10.8 billion (Schultz, 2016). The brand’s official Facebook page has over 24 million fans (Zara, 2016).
  7. 7. 7 H&M positions itself as a provider of “fashion and quality at the best price in a sustainable way” (H&M, 2016c, p. 1). Founded in Sweden, this company has evolved into a global fashion retailer with over 4,000 stores in 61 countries around the globe (H&M, 2016a). The brand’s worldwide sales were estimated at EUR16.8 billion in 2014 (Schultz, 2016). The UK is one of H&M’s largest markets, ranking third after Germany and the US (H&M, 2015). H&M’s official Facebook page is followed by over 27 million people (H&M, 2016b). 1.3. Research Aim, Objectives and Questions The aim of this research project is to analyse the impact of the social media advertising strategies employed by Zara and H&M on such customer reactions as purchase intention and brand loyalty. This aim requires the attainment of the following objectives: 1. To examine the ways in which social media advertising can affect customer purchase intention and brand loyalty in the fast fashion industry. 2. To identify the most popular social media advertising practices adopted by fast fashion brands. 3. To compare the effectiveness of social media strategies and traditional advertising employed by Zara and H&M in the UK market. 4. To develop recommendations concerning how the social media marketing strategies of fast fashion brands can be enhanced to engage the UK audiences more effectively. The major research question of this dissertation is:  What social media advertising strategies are the most effective for fast fashion brands to promote purchase intention and loyalty in British customers? The supportive research questions are:  Do social media advertising strategies have more influence on customer loyalty and attitudes than traditional advertising?  How do Web 2.0 advertising practices affect consumer purchase intention as compared with traditional methods of advertising?
  8. 8. 8  How do the UK customers respond to the social media advertising strategies employed by H&M and Zara?  What social media strategies should fast fashion brands employ to maximise the positive customer outcomes? 1.4. Significance and Potential Contribution This project can contribute to the scientific knowledge on the impact of social media advertising strategies on customer behaviour. From the practical viewpoint, the research findings can inform the social media marketing strategies of fast fashion brands. 1.5. Research Methods Standardised questionnaire forms are distributed among those customers of H&M and Zara who tend to be active on such social media as Facebook, Instagram and Twitter. In particular, the researcher attempts to approach people who have made comments on H&M’s and Zara’s social media accounts assuming that this target population is customers. The total population sample is 200 customers, including 100 customers of H&M and 100 customers of Zara. The human participants are approached online and contacted via their social media accounts. This questionnaire survey is limited geographically to the UK. The obtained quantitative evidence is analysed statistically using the SPSS software package. Specifically, the brands’ social media advertising practices are used as independent variables, while customer perceptions and purchase responses are chosen as dependent variables to determine the effectiveness of Web 2.0 advertising. In addition, secondary data is collected online to enable triangulation and data comparison (Saunders et al., 2009).
  9. 9. 9 1.6. Research Limitations The findings of this research are only relevant to H&M and Zara, which are the focus brands of this study. Because of a non-random sampling method employed, the identified opinions and views cannot be extrapolated to all customers of these brands. The findings are limited to the UK context as participants are recruited only in this country. A more detailed set of limitations can be found the conclusions and recommendations chapter. 1.7. Structureof the Dissertation This paper is organised in five chapters. The first chapter presents the problem statement, the research context, aim, objectives and questions, outlines the significance and potential contribution of this study, its methods and limitations. The second chapter critically evaluates the past research literature in the field. The third chapter details and justifies the research methodology. The fourth chapter reports, analyses and discusses the primary findings. The fifth chapter culminates with a conclusion and recommendations for industry practitioners and future researchers.
  10. 10. 10 Chapter 2: Literature Review 2.1. Introduction This chapter identifies the ways in which social media advertising can affect customer purchase intention and brand loyalty through the review of previous literature in the field. In addition, the social media advertising practices currently employed by Zara, H&M and other fast fashion brands are identified. Thus, this chapter attains the first and the second objectives of this dissertation and answers the first and the second research questions. This chapter includes five sections. The next section identifies the impacts of social media advertising on consumer behaviour from the perspective of major theoretical frameworks. The third section identifies the social media advertising strategies employed by fast fashion brands on Facebook, Instagram and Twitter. The fourth section critically evaluates the effectiveness of the most popular social media advertising strategies. The final section summarises the secondary research findings and develops the conceptual framework. 2.2. Theories of Customer Behaviour on Social Media One of the recent theories of online customer behaviour, with a particular focus on social media, was suggested by Hoffman and Fodor (2010). The scholars distinguished between four key customer motivations, or 4C’s, that guide their behaviour on social media, namely consumption, connection, creation and control (Hoffman and Fodor, 2010). The consumption motivation drives customers into reading online advertisements or clicking on them to get more information about the product, find a good deal and make a purchase (Hoffman and Novak, 2012). The connection motivation makes users subscribe to the brand’s page and comment there in order to be part of a group of people with similar interests (Hoffman and Novak, 2012). The creation motivation drives customers into sharing and re-posting the content they liked, or suggesting their own ideas to the brand (Hoffman and Novak, 2012). Finally, the control motivation makes people add the brand’s pages to favourites or leave bookmarks in order to be able to retrieve this information whenever needed (Hoffman and Novak, 2012). The advantage of 4C theory is that it is rooted in
  11. 11. 11 the general theory of customer motivations (Wu and Lin, 2012) and, hence, has a strong theoretical basis. The major problem with 4C is that, being a relatively new concept, it lacks empirical support. In particular, the 4C identified by Hoffman and Fodor (2010) are different from the four main customer online motives that were revealed by earlier researchers and included shopping, communicating, surfing and researching (Stafford, 2008). Future research is needed to find out which classification is more relevant to the present-day social media environments. The Behavioural Perspective Model assumes that online and offline consumers alike pursue two main kinds of reinforcement, namely utilitarian or informational (Foxall, 1988). Besides, customer actions might be driven by the avoidance of punishment, which can also be informational or utilitarian. An example of a utilitarian punishment is paying more for a product they could have bought cheaper in a different place. To pursue reinforcements and avoid punishments, consumers would browse the information about brands and products online. The Behavioural Perspective Model was used by Vishnu Menon and Sigurdsson (2016) in their investigation of consumer responses to Facebook advertising of a large fashion retailer. The major limitation of this model is that it is inductive and descriptive in nature, while its empirical support is controversial (Vishnu Menon and Sigurdsson, 2016). Another general customer behaviour theory that can be applied to social media contexts is the Hierarchy of Effects that was pioneered by Lavdige and Steiner (1961). This model presents the customer decision-making process as a three-stage sequence of cognition, affect and conation (Hoyer et al., 2013). In other words, the customer first gets to know about the brand, e. g. from social media advertising. The emotional appeal of the ad promotes affect, and in the next stage, conation, the consumer develops an intention to buy this product (Smith et al., 2008). This model is supported by a strong empirical basis as it has been frequently applied to understand consumer behaviour on social media (Jung et al., 2011; Taylor et al., 2011). However, a number of studies challenged the sequence of Lavdige and Steiner’s (1961) stages or even the very existence of the Hierarchy of Effects. For example, Goodrich (2011) argued that thinking and feeling occur in customers simultaneously as they are exposed to ads and, hence, cannot be separated into the distinct stages of cognition and affect.
  12. 12. 12 The Meta-Theoretic Model of Motivation and Personality (3M) was suggested by Mowen (2000). The scholar specified four groups of customer traits that affected their decision-making process, namely elemental, compound, situational and surface traits (Mowen, 2000). The 3M framework is graphically presented in the figure below. Figure 1: The Meta-Theoretic Model of Motivation and Personality (3M) Source: Adapted from Mowen (2000,p. 33) As the figure above demonstrates, all four groups of traits act as inputs to the customer decision- making process (Mowen, 2000). In combination with perceptual inputs, such as social media advertising, these traits produce cognitive appraisal of the retailer’s offer and behavioural outcomes. Mowen’s (2000) traits partly overlap with the online shopping motives identified by Hoffman and Fodor (2010). In particular, situational traits incorporate socialising and informational gratifications that are pursued by the customer (Kang and Johnson, 2015), which
  13. 13. 13 corresponds with Hoffman and Fodor’s (2010) connection and consumption motivations. Kang and Johnson (2015) found 3M to be relevant to describe customer behaviour in the context of apparel e-shopping on Facebook. The major drawback of 3M is that it is rather complicated and, hence, might be impractical for use in some research studies and real-world business situations. 2.3. Social Media Advertising StrategiesEmployed by Fashion Retail Brands The social media advertising strategies might depend on the SNS type (e. g. Facebook, Twitter or Instagram) or be universal across most types of social media. Zhang and Mao (2016) described sponsored stories, display ads and reach generator as the three main forms of brand advertising on social media. Sponsored stories are published by third parties for a reward from the company and usually describe the author’s positive experience with the brand or product (Kulmala et al., 2013). Display ads, also known as banners, are graphical elements that appear next to the content on web pages, e-mails, messengers and other forms of web communication (Zhang and Mao, 2016). Reach generators are the pieces of content that are published by the company and that encourage the users to share them (Kulmala et al., 2013). An example of a reach generator is the company’s selecting a random owner of a valuable prize among those who shared the post about this event. When used effectively, reach generators can result in 25-35% of the total social media references to a particular brand being produced by highly engaged users (Geissinger and Laurel, 2016). The sponsored stories, display ads and reach generators are the examples of universal strategies that can be employed across all most popular SNSs, including Facebook, Instagram and Twitter (Zhang and Mao, 2016). However, there were few studies that compared their long- term customer outcomes side by side. This dissertation bridges this research gap by investigating the impact of various social media advertising strategies on purchase intention in the fashion retail context. Posting product advertisements with order information on the brand pages on Facebook, Twitter or Instagram is a new trend in fashion retail that is gaining momentum since this feature became available (Tweney, 2014). Vishnu Menon and Sigurdsson (2016) found that the attributes of such advertisements could either increase or decrease the likelihood of the purchased. The highest
  14. 14. 14 customer utility was delivered by low price and return guarantee (Vishnu Menon and Sigurdsson, 2016). Considering attribute importance, the consumers rated price information the highest, which was followed by guarantee and shipping information. The lowest importance ranking was given to charity labels (Vishnu Menon and Sigurdsson, 2016). This study is especially relevant in the context of this project because the focus company was a fashion retailer that used Facebook as part of their marketing strategy (Vishnu Menon and Sigurdsson, 2016). The findings align with the earlier results by Fagerstrom et al. (2011) and Sigurdsson et al. (2013). The major limitation is that Vishnu Menon and Sigurdsson’s (2016) research sample only included university students and was biased towards females, who constituted 81.9% of respondents. Besides, the study only tested the consumer perception of Facebook ads. Future research is needed to see whether these relative weights of ad attributes would be retained in other age and occupational groups, as well as across other social networking sites such as Instagram or Twitter. This dissertation partly addresses this research gap by comparing the effectiveness of posted advertisements across Instagram, Facebook and Twitter. Another promising direction for future research is to investigate what kinds of clothing annotations are likely to attract more customers who use online automatic recognition and recommendation systems that are currently gaining popularity on social media (Nogueira et al., 2016). The engagement outcomes of four posting strategies on Facebook were compared by Taylor and Alonso (2014). The scholars discovered that photos were strongly preferred by page visitors, collecting over 10,000 ‘likes’ on average, while for other types of content this figure did not exceed 2,000-2,500 (Taylor and Alonso, 2014). The number of ‘shares’ was notably smaller and fluctuated around 200-300 for photos and videos (Taylor and Alonso, 2014). These results indicate that posting predominantly image content can be the most effective strategy to engage customers on Facebook and posting videos can be equally effective to promote sharing behaviours and build the brand’s outreach. In general, photos accounted for 70% of the content posted by brands on Facebook, which agrees with the findings by Touchette et al. (2015) on a different brand sample. The major limitation of Taylor and Alonso’s (2014) work is that it only measured engagement in the terms of immediate behavioural responses such as likes and shares. The long-term outcomes, including purchase intention and brand loyalty, were not accounted for. Moreover, the findings have limited practical value for the fashion retail industry because this
  15. 15. 15 study did not focus on fashion brands only. The research sample included the Top 100 brands from the Interbrand 2012 rating. This project addresses the limitations of Taylor and Alonso’s (2014) study by assessing the impact of Facebook strategies on customer loyalty and purchase intention in fashion retail brands. Also, this dissertation examines the relative effectiveness of photo and video posting on Instagram and Twitter. The brands’ utilisation of sponsored stories in fashion blogs was investigated by Pihl (2013). The scholar found both Zara and H&M to be among the top most referenced brands, with 1,265 references to H&M and 546 references to Zara encountered in fashion blogs (Pihl, 2013). These findings indicate that both brands actively rely on this social media strategy. The major limitation of Pihl’s (2013) work is that it did not measure customer outcomes, including purchase intention and brand loyalty, that were generated by this marketing strategy. Another important limitation is that Pihl’s (2013) study was limited to fashion bloggers based in Sweden. This dissertation addresses these gaps by investigating the customer response to sponsored stories in the UK context. All three studies discussed above were focused on Facebook as the most popular SNS up to date. However, other social media websites such as Instagram and Twitter can potentially be used by fashion brands to leverage their sales and brand loyalty as well. Some advertising strategies, including photo posting, video posting, sponsored stories and reach generation, can be used across several social media platforms. This dissertation is testing the assumption that advertising strategies on Instagram and Twitter can deliver customer outcomes that are comparable to those of Facebook advertising. The tested advertising strategies are summarised in the table below.
  16. 16. 16 Table 1: A Summary of Social Media Strategies Employed by Fashion Retail Brands SNS Strategy Source Facebook Photo/advertising posting Taylor and Alonso (2014, p. 247); Vishnu Menon and Sigurdsson (2016, p. 345) Video posting Taylor and Alonso (2014, p. 247) Display ads Zhang and Mao (2016, p. 156) Sponsored stories Kulmala et al. (2013, p. 21); Pihl (2013, p. 3) Instagram Photo/advertising posting Taylor and Alonso (2014, p. 247); Vishnu Menon and Sigurdsson (2016, p. 345) Video posting Taylor and Alonso (2014, p. 247) Sponsored stories Kulmala et al. (2013, p. 21); Pihl (2013, p. 3) Twitter Photo/advertising posting Taylor and Alonso (2014, p. 247); Vishnu Menon and Sigurdsson (2016, p. 345) Video posting Taylor and Alonso (2014, p. 247) Sponsored stories Kulmala et al. (2013, p. 21); Pihl (2013, p. 3) A comprehensive and critical summary of social media advertising advantages and disadvantages was offered by Taylor (2013). The researcher noted that social media ads contribute to customer engagement as they “grasp the attention of current and prospective clients through the use of appropriate and exciting content” (Taylor, 2013, p. 41). The use of social media advertising practices is also beneficial in terms of gaining customers’ trust, increasing the overall cost-effectiveness of marketing and stimulating brand visibility. Oncel (2015) agreed that social media advertising allows profit-making organisations to establish in-depth contract and two-way communication with their target audience. On the downside, marketing activities on social media require constant attention and management from organisations, which may consume additional resources, time and energy. Finally, negative reviews are posted by customers more frequently than positive feedback and such online behaviour can discourage other customers who feel positive about the company (Taylor, 2013). Discussing the critical success factors of social media advertising, McHale (2012) emphasised that companies should avoid sharing false and misleading statements in the Web 2.0 environment. Another good practice is addressing the claims of customers and responding to their concerns in the form of open discussions, personal messages and comments (McHale, 2012). It is essential for social media marketers to create unique and appealing content to be able to retain customers’ attention for a continuous time period. However, Boateng and Okoe (2015) argued that the effect of social media advertising is not straightforward and direct, but rather
  17. 17. 17 mediated by corporate reputation. In other words, corporate image that has been created offline is transferred to the social media environment. 2.4. Effectivenessof Social Media Advertising in Fashion Retail Industry Ad clicks are commonly used as a measure of social media advertising effectiveness in a variety of sectors, including fashion retail (Fulgoni and Lipsman, 2014). The relevance of this measure was supported by Zhang and Mao (2016) who found ad clicks to be a powerful predictor of product evaluation, which, in turn, promoted purchase intention and positive word-of-mouth. The regression model developed by the scholars explained 46.8% of variance in customer purchase intention and 53.2% in electronic word-of-mouth (e-WOM) (Zhang and Mao, 2016). This is consistent with the earlier conclusions by Haans et al. (2013) that the content of social media ads can significantly shape customer behavioural responses. The major limitation of Zhang and Mao’s (2016) study is that the research sample only included university students and was biased towards Caucasians (71.1% of the total sample) and heavy Facebook users (64.2%). The ratio of those who preferred Instagram was 31%, and heavy Twitter users constituted only 5.5% (Zhang and Mao, 2016). Thus, the established relationships are more relevant to Facebook audiences than for those on other social networks. Besides, 93% of the samples were under 29 (Zhang and Mao, 2016), which means that the findings can only be generalised to this age group. The posting and response strategies employed by Zara and H&M on Facebook were investigated by Schultz (2016). The scholar found that both brands, as well as four of their major competitors, produced more new posts on Tuesdays till Fridays and fewer during weekends. H&M stood out strikingly for the number of new posts that reached 193 during the six weeks’ period of study (Schultz, 2016). On the other hand, Zara made only 11 new posts within this period, while for other brands this figure fluctuated between 34 and 68 (Schultz, 2016). In addition, H&M responded to 40% of user posts in the community and Zara only responded to 6% (Schultz, 2016). Despite these strongly dissimilar social media policies, the development of fan base by both brands over the studied period was roughly equal within 3-4% (Schultz, 2016). The fastest development, by 9%, was achieved by Primark, a brand that was the second largest poster after H&M and that did not respond to any user posts at all (Schultz, 2016). These findings challenge
  18. 18. 18 the widespread assumption that brands need to be actively engaged with their social media pages in order to generate a greater brand value (Barnes, 2014; Kabadayi and Price, 2014; Wirtz et al., 2013). The major limitation of Schultz’s (2016) investigation is that it employed the growth of fan base as the single measure of social media strategy effectiveness. Although the positive correlation between fan base and sales growth was established in several past studies (Cao et al., 2014; Lipsman et al., 2012), the number of followers is not suitable to measure the level of customer satisfaction with their current relationship with the brand. Schultz (2016) cited the case of a surge of negative comments on Zara’s Facebook page that continued for several days. Albeit not causing a decrease in the number of fans, this negative message could still have done considerable damage to the brand equity as it was allowed to spread through its network without being properly addressed by the company (Schultz, 2016). This case indicates the potential dangers of low-interaction strategies for fashion retail brands. However, future research is needed to establish the relationship between the brand’s posting and response strategies and direct customer outcomes such as brand loyalty or purchase intention. The entertainment value of apparel brand social media pages was in the focus of Touchette’s et al. (2015) study. The scholars investigated 50 top apparel brands, including manufacturers and retailers, and found that the most commonly used type of entertainment on their Facebook pages was advertisements and photos. They accounted for 55.4% of the total context, being followed by online interactive (19.2%), sweepstakes (11%) and video/audio (7.6%) (Touchette et al., 2015). Considering themes, 77.8% of posts presented no specific play theme and 7.9% used play as frivolity (Touchette et al., 2015). The major limitation of this research is that it did not evaluate customer response to various forms and themes in brand entertainment. Only content analysis was conducted to identify the most frequently utilised themes. Future research is needed to find out which types of entertainment on brand Facebook pages can deliver the best customer outcomes. The research study by Kang et al. (2013) identified three distinct clusters of customers according to the primary purpose for which they seeking e-WOM on social media about apparel brands.
  19. 19. 19 Price-conscious customers were looking for the best price on the product they needed, which corresponds with the consumption motive by Hoffman and Novak (2012) and with utilitarian reinforcements by Foxall (1988). Fashion-conscious customers were looking for the trendiest clothing, or seeking informational reinforcements in Foxall’s (1988) terminology. Brand- conscious customers were exploring social media for more information about their favourite brands, which corresponds with the connection motive by Hoffman and Novak (2012). Therefore, the findings by Kang et al. (2013) are consistent with the major consumer behaviour frameworks. The major limitation of Kang’s et al. (2013) work is that it did not measure the effectiveness of various e-WOM strategies for engaging the identified types of customers. This dissertation partly overcomes this limitation by comparing the impacts of e-WOM on Facebook, Instagram and Twitter on British customers. However, future research is needed to establish the relationship between e-WOM impacts and consumer types. 2.5. Chapter Summary and Conceptual Framework Social media advertising can promote positive consumer responses by offering them utilitarian and informational value (Foxall, 1988). Effective social media strategies address the customer needs of price-conscious consumption, feeling connected to the brand and to customers with similar interests, taking control over their relationship with the brand and co-creating valuable content (Hoffman and Novak, 2012). One important difference of social media advertising from traditional advertising is the interactivity of the former. For example, the customer can click on a Facebook ad to order the product instantly and make an impulse purchase or share the company’s tweet that they liked. Thus, engaging with the company’s content on social media results in developed brand loyalty and greater purchase intentions. Large fast fashion retailers such as Zara and H&M employ a variety of advertising strategies on Facebook, Twitter and Instagram, including posting photo/advertising content, posting video content, sponsoring stories and buying display ads (Zhang and Mao, 2016). The study by Taylor and Alonso (2014) demonstrated that the photo content posted by brands was likely to attract most ‘likes’, while the photo and video content were most likely to be shared. However, this research work was limited to Facebook. This dissertation examines whether this relationship
  20. 20. 20 holds across other social media such as Twitter and Instagram. The dependent and independent variables of this project are presented in the figure below. Figure 2: Conceptual Framework of the Social Media Advertising in the Fashion Retail Context As the chart above demonstrates, this dissertation tests the impact of social media advertising strategies on two customer outcomes, namely purchase intention and brand loyalty, across three SNSs, including Facebook, Instagram and Twitter. The impact of photo advertising, video posting and sponsored stories is tested for each kind of social media since these strategies are universal across platforms. The impact of display ads is only tested for Facebook because this strategy is mostly employed on this platform (Zhang and Mao, 2016). Facebook: - Photoadvertising - Videoposting - Sponsoredstories - Displayads Instagram: - Photoadvertising - Videoposting - Sponsoredstories Twitter: - Photoadvertising - Videoposting - Sponsoredstories Customer outcomes: - Purchase intention - Brand loyalty
  21. 21. 21 By the term ‘sponsored stories’, the researcher means any posts by third parties that are sponsored by the company and that tell about personal experiences with the brand. An example of a sponsored story on Instagram is the user’s photo in the brand’s clothes with a brief positive comment.
  22. 22. 22 Chapter 3: Research Methodology 3.1. Introduction This chapter explains the research methodology of this project. The next section justifies the methodological framework. The third section presents the specific research strategies. The fourth section outlines the data analysis methods. The fifth section discusses the involved ethical issues. The sixth section summarises the contents of this chapter. 3.2. Methodological Framework This project is guided by epistemological framework because the nature of knowledge to be collected is determined by the research question (Saunders et al., 2007). Considering the research philosophy, the combination of positivism and interpretivism is employed for this dissertation (Saunders et al., 2007). Positivism enables the researcher to generalise on how a particular social advertising practice is perceived by the customer audience (Remenyi et al., 1998). This philosophy assumes that business and social situations develop according to certain laws. In particular, the effectiveness of social media advertising practices can be evaluated by the impact that they produce on customer perceptions and behaviours (Gill and Johnson, 2002,). This impact can be measured quantitatively through customer survey, observation or sales data analysis. By contrast, interpretivism is based on the assumption that each social situation is unique and can only be understood through the perspectives of involved human actors (Richie et al., 2013). The main limitation of positivism is that it might overlook the influence of factors that are difficult to quantify, such as brand image or customer taste (Easterby-Smith et al., 2012). The main limitation of interpretivism is that it is more vulnerable to the researcher bias as no rigorous methodology is employed (Collis and Hussey, 2014). Using these two philosophies in combination, the researcher can mitigate their drawbacks and fully utilise their strengths (Tashakkori and Teddlie, 2003). Deduction is selected as the main research approach for this project for several reasons. Firstly, the field of social media marketing in fast fashion industry is overall well-investigated, with
  23. 23. 23 several major theories existing in this area. This situation favours the use of deductive approach, while induction is preferable for underexplored or emerging fields (Creswell, 1994). Secondly, deduction is more practicable for undergraduate researchers as the reliability and validity of findings can be ensured by following a rigorous methodology (Gill and Johnson, 2002). In case of induction, the researcher might lack the knowledge and skills to develop a completely new theory. Thirdly, the use of deduction is consistent with the positivist research philosophy and quantitative data being collected (Saunders et al., 2007). The major limitation of deduction is that explaining any unexpected patterns that emerge from the data will be beyond the scope of this study (Collis and Hussey, 2014). However, the researcher will be able to outline them as directions for subsequent research. Another limitation is that the scientific contribution of deductive projects is restricted to supporting or rejecting a particular hypothesis or set of hypotheses (Saunders et al., 2007). Still, this potential contribution is sufficient to justify the need of this study, especially considering that social media is a very dynamic field and the current knowledge in this area needs to be constantly re-considered and updated. 3.3. Research Strategies This dissertation combines case study and survey as the main primary research strategies. The case study method is employed to gain a profound understanding of the context where the research is set (Yin, 2003). The social media advertising practices of each focus company are viewed in the broader context of its mission, business model and target audiences. This strategy enables the researcher to evaluate the congruence and fit of H&M’s and Zara’s social media advertising and the extent to which it helps the companies achieve their strategic goals (Morris and Wood, 1991). The major limitation of case study research is that the findings cannot be generalised to other organisational contexts since every organisation is viewed as a unique entity (Saunders et al., 2007). Moreover, they cannot be extrapolated even to the same company in the past or in the future because the combination of external and internal factors in this organisation at the present moment is unique and subject to change over time (Robson, 2002). Nevertheless, the research findings are useful to inform H&M’s and Zara’s social media marketing strategy for the nearest future. Since social media is a very dynamic and fast-changing environment, the diminishing value of findings over time is not a serious issue for this research.
  24. 24. 24 Survey is employed as a primary data collection method for several reasons. Firstly, surveys allow to collect information directly from customers in a convenient and cost-effective way (Ghauri and Gronhaug, 2005). Secondly, surveys yield quantitative data that is easier to interpret and process. Besides, questionnaire data can be used for statistical inferences and establishing quantified relationships between variables (Saunders et al., 2007). Thirdly, surveys minimise the researcher bias because the analysis process is rather rigorous and straightforward (De Vaus, 2002). For this reason, surveys are generally more trusted by business practitioners than alternative methods of primary research such as interviews or focus groups (Saunders et al., 2007). On the other hand, surveys have a number of considerable limitations. The number of questions to be included in the survey is limited and generally should not exceed 25-30, otherwise the questionnaire might take too much time to complete (De Vaus, 2002). Being able to obtain answers only to a narrow set of questions, the researcher should pay particular attention to their selection. The reliability and validity of survey findings are determined by the fit between included questions and research variables (Saunders et al., 2007). The researcher addresses this issue by including at least two questions to measure each research variable. The next limitation is that questionnaire responses are very brief and standardised and, hence, are unlikely to provide any novel insights (Saunders et al., 2007). On the other hand, these responses are a good fit to test a set of hypotheses, which is the purpose of this study. This project uses self-nominated sampling. The researcher contacts the social media users who commented on the recent posts by H&M and Zara on social media, assuming that they are the engaged customers of these brands. Since this work is focused on the UK audience, only those users who have specified Britain as their location are contacted. Each intended participant receives a message that contains the invitation to take part in the study, the brief explanation of its scope and purpose and the link to the online questionnaire. The online survey is available until at least 100 responses from Zara’s implied customers and 100 responses from H&M’s implied customers are collected. Therefore, the total number of survey respondents is 200 individuals. The advantage of this sampling method is that it enables the researcher to gather a pre-determined number of responses that is large enough to make reliable statistical inferences (De Vaus, 2002). One major drawback of self-nominated sampling is that it is a non-random
  25. 25. 25 method, so the results cannot be generalised to a broader population (Saunders et al., 2007). Moreover, a self-nominated sample might be biased towards the customers who have stronger emotions, either positive or negative, about the brand that they are willing to express, or against those who have more free time to complete the questionnaire. Thus, the findings of this survey should be interpreted with caution and not extrapolated to a potentially larger group of less engaged customers. 3.4. Data Collection Instruments and AnalysisMethods The questionnaire consists of six structured and logical sections, which are predominantly based on the literature reviewed in the second chapter (Jung et al., 2011; Taylor et al., 2011; Nogueira et al., 2016). These sections include background data, social media and traditional advertising, advertising practices on Facebook, advertising practices on Instagram, advertising practices on Twitter and customer outcomes. The first section (Q1 – Q4) offers research participants to report their age, gender and awareness of Zara’s and H&M’s advertising initiatives on the most popular social networking services. Although this data does not lead to the achievement of the main dissertation aim, it allows the researcher to construct detailed respondent profiles and assess the extent to which they are aware of the social media advertising strategies adopted by the fashion brands on Facebook, Twitter and Instagram. The next questionnaire section (Q5 – Q8) is focused on the comparison of social media and traditional advertising in terms of its impact on consumer behaviour (Vishnu Menon and Sigurdsson, 2016; Stafford, 2008). In turn, the third section (Q9 – Q12) offers research participants to evaluate the extent to which Zara and H&M actively advertise their goods on Facebook using various advertising strategies such as photo posting, video posting, sponsored stories and display ads (Taylor and Alonso, 2014; Pihl, 2013). The fourth section (Q13 – Q15) and the fifth section (Q16 –Q18) are focused on Zara’s and H&M’s social media advertising strategies (i.e. photo advertising, video posting, sponsored stories) on Instagram and Twitter, respectively. The final section of the questionnaire (Q19 – Q20) offers social media users to report the extent to which they are willing to purchase from the fashion brands (purchase intention) as well as the degree to which they are intended to buy from the companies in the
  26. 26. 26 future (brand loyalty) (Barnes, 2014; Wirtz et al., 2013; Kabadayi and Price, 2014). The questionnaire sample can be found in Appendix. As mentioned in the literature review chapter, this dissertation attempts to examine whether there is a link between social media advertising strategies and the customer outcomes. Therefore, it is important to define both dependent and independent variables used in the statistical analysis (Saunders et al., 2007). The following table provides the reader with a summary of all the variables employed in the statistical analysis section of this project.
  27. 27. 27 Table 2: The Variable Definitions Questionnaire Section Question No Variable Definition Literature Source III. Advertising Practices on Facebook 9 FPHO Photo advertising on Facebook Taylor and Alonso (2014, p. 247); Vishnu Menon and Sigurdsson (2016, p. 345) 10 FVID Video posting on Facebook Taylor and Alonso (2014, p. 247) 11 FSTO Sponsored stories on Facebook Zhang and Mao (2016, p. 156) 12 FBAN Display ads on Facebook Kulmala et al. (2013, p. 21); Pihl (2013, p. 3) IV. Advertising Practices on Instagram 13 IPHO Photo advertising on Instagram Taylor and Alonso (2014, p. 247); Vishnu Menon and Sigurdsson (2016, p. 345) 14 IVID Video posting on Instagram Taylor and Alonso (2014, p. 247) 15 ISTO Sponsored stories on Instagram Kulmala et al. (2013, p. 21); Pihl (2013, p. 3) V. Advertising Practices on Twitter 16 TPHO Photo advertising on Twitter Taylor and Alonso (2014, p. 247); Vishnu Menon and Sigurdsson (2016, p. 345) 17 TVID Video posting on Twitter Taylor and Alonso (2014, p. 247) 18 TSTO Sponsored stories on Twitter Kulmala et al. (2013, p. 21); Pihl (2013, p. 3) VI. Customer Outcomes 19 WILL Purchase intention Taylor and Alonso (2014, p. 247) 20 LOYL Brand loyalty Tweney (2014, p. 1) The relationship between the identified social media advertising strategies and customer outcomes is established with the help of the linear regression function in SPSS. Given that this project examines social media users’ purchase intention and brand loyalty on three different social networking services, six regression models should be constructed. 𝑊𝐼𝐿𝐿 𝑖 = α0 + β1 𝐹𝑃𝐻𝑂i + β2 𝐹𝑉𝐼𝐷𝑖 + β3i + β4 𝐹𝐵𝐴𝑁i + εi, (1) where, WILL is consumer purchase intention (a dependent variable), α0 is a constant, β1, 2, 3...4 are indicators impacting the independent variables, namely FPHO, FVID, FSTO and FBAN and ε is residuals.
  28. 28. 28 𝐿𝑂𝑌𝐿𝑖 = α0 + β1 𝐹𝑃𝐻𝑂i + β2 𝐹𝑉𝐼𝐷𝑖 + β3i + β4 𝐹𝐵𝐴𝑁i + εi, (2) where, LOYL is brand loyalty (a dependent variable), α0 is a constant, β1, 2, 3...4 are indicators that affect the independent variables and ε is residuals. 𝑊𝐼𝐿𝐿 𝑖 = α0 + β1 𝐼𝑃𝐻𝑂i + β2 𝐼𝑉𝐼𝐷𝑖 + β3 𝐼𝑆𝑇𝑂 + εi, (3) where, WILL is consumer purchase intention (a dependent variable), α0 is a constant, β1, 2, 3 are indicators that influence the independent variables, namely IPHO, IVID and ISTO and ε is residuals. 𝐿𝑂𝑌𝐿𝑖 = α0 + β1 𝐼𝑃𝐻𝑂i + β2 𝐼𝑉𝐼𝐷𝑖 + β3 𝐼𝑆𝑇𝑂 + εi, (4) where, LOYL is brand loyalty (a dependent variable), α0 is a constant, β1, 2, 3 are indicators that impact the predictors and ε is residuals. 𝑊𝐼𝐿𝐿 𝑖 = α0 + β1 𝑇𝑃𝐻𝑂i + β2 𝑇𝑉𝐼𝐷𝑖 + β3 𝑇𝑆𝑇𝑂 + εi, (5) where, WILL is consumer purchase intention (a dependent variable), α0 is a constant, β1, 2, 3 are indicators affecting the independent variables, namely TPHO, TVID and TSTO and ε is residuals. 𝐿𝑂𝑌𝐿𝑖 = α0 + β1 𝑇𝑃𝐻𝑂i + β2 𝑇𝑉𝐼𝐷𝑖 + β3 𝑇𝑆𝑇𝑂 + εi, (6) where, LOYL is brand loyalty (a dependent variable), α0 is a constant, β1, 2, 3 are indicators that impact the predictors and ε is residuals. As a first step in the analysis process, the correlations between variables are established to control for the multicollinearity issue. As a second step, the multiple regression model is developed to determine the quantified impacts of social media advertising practices on customer purchase intention and brand loyalty. The findings of this quantitative analysis are triangulated
  29. 29. 29 against the conclusions by past researchers and the secondary evidence of the social media advertising practices employed by the focus brands. 3.5. Research Ethics As this project involves direct human participants, it is particularly important to maintain a high standard of research ethics. To gain access to potential respondents, the researcher only uses their contact data that is publicly available on social media. Each intended participant is informed on the scope and purpose of this study so that they can provide a fully informed consent (Zikmund, 2000). Any refusal to take part in the survey is accepted by the researcher, and no pressure is applied in the participant recruitment process. Besides, the researcher provides an estimate of the questionnaire completion time, which is considered as a best practice in social and business research (Blumberg et al., 2005). Since the survey participants are recruited on social media, the researcher is able to access the personal data that they have posted on their profiles, including their names, location and place of work. However, this data is not collected, stored or processed for the purpose of this study. The survey is anonymous and does not ask the participants for any personally identifiable information. The researcher is not able to identify the participant by the completed questionnaire and match it with their social media profile data. Thus, the anonymity and confidentiality of respondents is maintained in the process of data collection and analysis (Saunders et al., 2007). The researcher is committed to the accurate interpretation of the ideas and opinions expressed by others, be it the survey respondents or the authors cited. Although no interpretation can be completely free of the impact of the researcher’s personal values and perceptions, the author relies on scientifically proven and rigorous methods of analysis, such as correlation and multiple regressions, to minimise the possible bias (Sekaran, 2003).
  30. 30. 30 3.6. Chapter Summary This project employs an epistemological mix of positivism and interpretivism to analyse both tangible and intangible factors that might contribute to the established relationships. Deductive approach is used to test the existing theory in the context of Zara’s and H&M’s social media advertising. The methods of survey and case study are utilised to collect and process primary quantitative data. The data is analysed using the SPSS software. The researcher is committed to follow the appropriate ethical standards in the data collection and analysis process.
  31. 31. 31 Chapter 4: Data Analysis and Findings 4.1. Introduction The fourth chapter analyses, reports and interprets the analysis findings. As mentioned in the research methodology, primary data was collected from 100 customers of Zara and 100 customers of H&M. The data analysis and findings chapter consists of five subsections, namely introduction, background data analysis, the effectiveness of social media and traditional advertising, the link between social media advertising strategies and customer outcomes and summary. 4.2. Background Data Analysis In accordance with the research methodology chapter, this project is in keeping with self- nominated sampling, meaning Zara’s and H&M’s customers of different age and gender participated in the questionnaire survey. The background data analysis begins with the analysis of the participants’ age, which is presented by means of the following chart. Figure 3: How Old Are You? (%)
  32. 32. 32 More than one third or 37.5% of the participants indicated they were between 18 and 25 years. The social media users who reported they belonged to the ’26-36’ age group accounted for 32% of the sample. As much as 25.5% of those who returned their questionnaire reported they were between 36 and 45 years. Only a minority or 4.5% of the respondents were between 46 and 55 years. Only one individual belonged to the ‘56-60’ age group. Hence, young social media users between 18 and 35 years formed the overwhelming majority of the sample. The produced analysis results are in keeping with Whiting and Williams (2013) who arrived at the conclusion that individuals who belonged to a younger generation used social media more actively in comparison with more mature persons. Nevertheless, according to Cao et al. (2014), social media users are becoming older. Although fashion brands such as Zara and H&M focus on women, both companies provide male consumers with a wide range of fashion apparel and accessories (Inditex, 2016; H&M, 2015). The following chart demonstrates the research participants’ gender. Figure 4: What Is You Gender? (%) The overwhelming majority or 76% of those who returned their questionnaire reported they were women. On the contrary, the remaining 24% of the participants were males. These outcomes are in keeping with Geissinger and Laurel (2016) who acknowledged that the fashion industry was
  33. 33. 33 more women-oriented. Nevertheless, the employment of the self-nominated sampling technique does not allow for stating that the drawn sample is representative of the whole population of Zara’s and H&M’s customers (Blumberg et al., 2005). According to the research methodology, the survey participants are engaged customers of the fashion brands. The frequency of the participants’ purchases from Zara and H&M is presented by means of the following chart. Figure 5: How Often Do You Purchase Goods Either from Zara or from H&M? (%) Almost two thirds or 60.5% of those surveyed indicated they purchased fashion goods and accessories from the brands almost every month. In turn, the respondents who bought from Zara and/or H&M almost every week accounted for 19% of the sample. As much as 18.5% of the social media users reported they purchased fashion apparel and accessories from the companies several times a year. Only a minority or 2% of the individuals buy fashion goods from Zara and/or H&M almost every year. The produced results show that the sample of this project is drawn from the engaged customers of the fashion brands. Therefore, it is relevant to assume that the research participants are aware of the brands’ advertising and promotion campaigns on social media.
  34. 34. 34 Figure 6: I Am Fully Aware of Zara's and/or H&M's Advertising Initiatives on the Most Popular Social Networking Services such as Facebook, Instagram and Twitter (%) The social media users who either agreed or strongly agreed they were fully aware of Zara’s and/or H&M’s advertising initiatives on the most popular social networking services totalled almost three fourths or 73% of the sample. On the contrary, in total, only a minority or 12.5% of those who returned their questionnaire either disagreed or strongly disagreed with this statement. The remaining 14.5% of the individuals provided the researcher with neutral responses to this question. Therefore, the majority of the fashion consumers were aware of Zara’s and/or H&M’s marketing campaigns and initiatives on social media. This fact contributes to the validity and reliability of the research outcomes since the participants have a considerable knowledge of the companies’ online marketing strategy. 4.3. The Effectiveness of Social Media and Traditional Advertising This section is responsible for the examination of whether fashion consumers respond to social media advertising more positively in comparison with traditional advertising methods and practices. It is commonly accepted in the marketing literature that the emergence of Web 2.0 has significantly changed the way organisations deliver their marketing messages to consumers (McHale, 2012; Taylor and Alonso, 2014). For example, advertising on social media was
  35. 35. 35 reported by Kulmala et al. (2013) to facilitate two-way communication between the brand and the customer, eliminating the factor of the time lag. At the same time, traditional marketing communications channels such as TV, radio and printed materials are focused on one-way communication, which can be viewed as a limitation (Zhang and Mao, 2016). The degree to which both types of advertising are attractive to the research participants is presented as follows. Figure 7: The Attractiveness of Zara's and H&M's Online and Traditional Advertising (%) The questionnaire survey participants who either agreed or strongly agreed they were highly attracted by Zara’s and/or H&M’s advertising campaigns and promotions on social media totalled the overwhelming majority or 86% of the sample. By contrast, in total, only 13% of the internet users either disagreed or strongly disagreed the effectiveness of the fashion brands’ online advertising and promotions initiatives was high. Only 1% of those surveyed provided the researcher with neutral responses to this question. Further analysis also indicates that in total, almost half or 44.5% of the social media users either agreed or strongly agreed they were highly attracted by Zara’s and/or H&M’s advertising campaigns and promotions communicated through TV, radio, billboards, journals and other traditional ways of marketing communications. In turn, the individual who either disagreed or strongly disagreed the attractiveness of the traditional advertising instruments employed by the
  36. 36. 36 fashion brands was totalled 46% of the sample. Only 9.5% of the internet users neither agreed nor disagreed with their peers and responded neutrally to this statement. The produced graphical analysis results demonstrate that online advertising campaigns and initiatives are perceived by the social media users as more attractive in comparison with more traditional ways of communicating marketing messages. Similarly to this dissertation, Hoffman and Fodor (2010) were convinced that consumers were more responsive to advertising in the online environment due to a higher level of interactivity comparing to offline advertising. This statement is also in keeping with Touchette et al. (2015) who argued that interactive advertisings provided consumers with easier and quicker access to product- and service-related information, which in turn, stimulated their purchasing intention. Nevertheless, the attractiveness of offline advertising instruments is still perceived as high (Taylor, 2013). It is possible to explain these findings by the fact that traditional media are highly popular with more mature consumers (Hoffman and Novak, 2012). In accordance with BLS (2015), consumers between 45 and 55 years spend the greatest amount of money on fashion in comparison with those fashion consumers who belong to a younger generation. That is why fashion brands deliver their marketing messages through traditional communications channels. Pihl (2013) established a direct relationship between a firm’s marketing efforts and consumers’ willingness to purchase from this organisation. Nevertheless, the researcher failed to differentiate between social media and traditional advertising. This dissertation attempts to bridge this gap by comparing whether Zara’s and H&M’s online and traditional advertising has different impact on their customers’ buying intentions. The analysis results are presented by means of the following histogram.
  37. 37. 37 Figure 8: The Impact of Zara's and H&M's Online and Traditional Advertising on Buying Intentions (%) In total, almost three fourths or 72% of the research participants either agreed or strongly agreed Zara’s and/or H&M’s advertising campaigns and promotions on social media significantly contributed to their willingness to purchase from the brands in the future. On the contrary, the internet users who either disagreed or strongly disagreed with their peers totalled 21% of the sample. The remaining 7% of those surveyed selected the ‘Neither’ response option. These outcomes indicate that the impact of the fashion brands’ social media advertising on consumers’ purchase intentions is stronger comparing to traditional advertising. The chart above also indicates that 43.5% of the individuals either agreed or strongly agreed Zara’s and/or H&M’s advertising campaigns and promotions communicated through TV, radio, billboards, journals and other printed materials added to their willingness to buy fashion apparel and accessories from the brands in the future. At the same time, the survey participants who either disagreed or strongly disagreed the companies’ traditional advertising had any positive impact on their intention to purchase totalled 43.5% of the sample. Finally, neutral responses were provided by the remaining 13% of the respondents. The graphical analysis results indicate that online advertising and promotion campaigns have a stronger impact on fashion consumers’ buying intentions in comparison with more traditional or
  38. 38. 38 offline methods of marketing communications. These findings correlate strongly with those achieved by Taylor and Alonso (2014) according to whom online advertising is devoid of many drawbacks, which are inherent in traditional advertising methods. As previously mentioned, social media advertising allows for establishing two-way communication between the brand and the consumer. Therefore, it is possible to collect feedback from consumers in a faster way comparing to traditional marketing tools and instruments. It should be critically remarked, however, that companies have limited control over their marketing mix activities in the online environment (Taylor, 2013). This fact may pose a serious threat to their brand reputation. For example, an advertising campaign that does not appeal to consumers’ needs and expectations may trigger negative word of mouth (WOM) (Boateng and Okoe, 2015). 4.4. The Link between Social Media Advertising Strategiesand Customer Outcomes As mentioned in the introduction chapter, this dissertation attempts to identify what social media advertising strategies are the most effective for fast fashion brands to promote purchase intention and loyalty in British consumers. For this purpose, the most popular social networking services, namely Facebook, Twitter and Instagram have been selected. In their study, Taylor and Alonso (2014) found that photo posting on social media was an effective way to attract customer attention to a firm’s goods and services. The following chart summarises and compares the extent to which photo posting is perceived to be actively used by Zara and H&M on the mentioned social media sites.
  39. 39. 39 Figure 9: Photo Posting (%) Photo posting on Instagram was reported by the majority or in total, 87% of the respondents as the most actively used social media advertising strategy by Zara and H&M. In turn, the extent to which the brands actively posted photos on Facebook and Twitter was perceived by the research participants as less significant. It is possible to explain these outcomes by the fact that alternatively to Facebook and Twitter, Instagram is a photo and video sharing service. Overall, Zara and H&M actively use all three social networking services to post photos. Video positing on social media is another effective strategy that allows companies to attract consumer attention and generate higher levels of engagement and loyalty (Taylor and Alonso, 2014; Vishnu Menon and Sigurdsson, 2016). The following chart compares the degree to which the fashion brands are perceived to actively post videos on the social media sites.
  40. 40. 40 Figure 10: Video Posting (%) The participants who either agreed or strongly agreed video posting on Instagram was the most popular social media advertising strategy totalled 62.5% of the sample. The perceived popularity of Facebook as a tool for posting videos was also evaluated by the respondents as high. In turn, video posting on Twitter lags behind the remaining social networking services in terms of perceived popularity. The produced outcomes are in line with those achieved by Vishnu Menon and Sigurdsson (2016) who argued that Twitter was predominantly used to post short messages rather than video content.
  41. 41. 41 Figure 11: Sponsored Stories (%) As it can be observed from the chart above, the perceived popularity of sponsored stories as a means of advertising is low across all three social networking services. A possible explanation of these findings is that consumers tend to rely on independent information sources on third-party web sites (McHale, 2012). At the same time, sponsored stories on Zara’s and H&M’s social media pages may be perceived as not entirely honest (Fulgoni and Lipsman, 2014). Nevertheless, Facebook, Twitter and Instagram still remain highly popular with companies as marketing tools. This statement is also in keeping with Zhang and Mao’s (2016) findings, according to which a great number of organisations are looking to increase their paid advertising on the mentioned social networking services.
  42. 42. 42 Figure 12: Companies’ Intention to Invest in Social Media Advertising (%) Source: Smart Insights (2014, p. 1) According to the chart above, Facebook remains the most popular marketing tool with companies. These results can be explained by the fact that this social networking service provides business with a more flexible and effective ads system in comparison with its alternatives (Schultz, 2016). At the same time, as demonstrated by the histogram, a great number of organisations do not use social media to promote and advertise their goods (Smart Insights, 2014). Nevertheless, it is impossible to identify whether these findings are caused by the perceived ineffectiveness of these marketing communications channels or firms’ focus on other from social media users customer groups. In accordance with the literature review, the most popular social networking services such as Facebook, Twitter and Instagram are used in this project to establish the relationship between social media advertising strategies and customer purchase intentions and brand loyalty. The linear regression function is performed in the SPSS software package to identify how Zara’s and H&M’s social media advertising strategies on Facebook predict consumer purchase intentions. The outcomes of the statistical analysis are presented as follows.
  43. 43. 43 Table 3: Social Media Advertising Strategies on Facebook and Customer Purchase Intentions (Linear Regression) Variable Unstandardized Coefficients t Sig. Collinearity Statistics B Std. Error Tolerance VIF α 2.732 0.440 6.215 0.000 FPHO 0.012 0.066 0.185 0.853 0.965 1.036 FVID 0.104 0.063 1.652 0.100 0.988 1.012 FSTO 0.083 0.059 1.397 0.164 0.955 1.047 FBAN 0.139 0.059 2.366 0.019 0.996 1.004 The table above demonstrates that only one independent variable, namely FBAN has statistical power over the independent variable. This statement is made since the Significance (Sig.) of the predictor is equal to 0.019, which is much lower than the threshold value of 0.05. The statistical outcomes also indicate that B coefficient of the independent variable is positive, meaning FBAN is positively correlated with WILL. Hence, the established statistical relationship can be interpreted as follows: the more actively Zara and/or H&M post stories about their customers’ positive experience with their products on Facebook, the more social media users are willing to purchase fashion goods and accessories from the brands. The Variance Inflation Factor (VIF), which is a means of validity and reliability, is within its normal range (n = 5), meaning the statistical analysis results do not show collinearity. None of the predictors should be excluded from the model. Some scholars argue that variables, the Sig. of which is higher than 0.05 but lower than 0.15 are statistically significant at least at 15% (Bryman and Cramar, 2011; Carver and Nash, 2011). According to the table above, the Sig. of the FVID variable is equal to 0.10, which is lower than 0.15. Considering positive B coefficient of the predictor, it is possible to interpret the established relationship as follows: the more actively Zara and/or H&M post videos of Facebook, the more social media users are willing to buy fashion products and accessories from the brands. None of the remaining variables have any statistically significant predicting power over the WILL variable. According to the conceptual framework of this study, brand loyalty is another customer outcome, which is used as a dependent variable. Nevertheless, this dissertation failed to establish any statistically significant relationship between Zara’s and H&M’s social media advertising strategies on Facebook and the research participants brand loyalty.
  44. 44. 44 Alternatively to Facebook, Instagram put a heavy emphasis on photo and video sharing. Therefore, it is relevant to assume that the role of Zara’s and H&M’s video and photo sharing activities on Instagram in consumers’ purchasing behaviour should be considerable. This assumption is tested by means of the following table. Table 4: Social Media Advertising Strategies on Instagram and Customer Purchase Intentions (Linear Regression) Variable Unstandardized Coefficients t Sig. Collinearity Statistics B Std. Error Tolerance VIF α 2.718 0.493 5.513 0.000 IPHO 0.205 0.097 2.109 0.036 0.997 1.003 IVID 0.050 0.059 0.858 0.392 0.993 1.007 ISTO 0.048 0.083 0.582 0.561 0.991 1.009 The statistical analysis results show that there is a significant correlation between the IPHO and WILL variables. According to the table above, the Sig. of the predictor is lower than 0.05, which is the threshold value. B coefficient of the predictor is positive, meaning the relationship between the variables is also positive. Thus, the more actively Zara and H&M post photos on Instagram, the more social media users are willing to purchase fashion apparel and accessories from the brands. None of the remaining independent variables statistically predict the WILL variable. The value of the VIF is lower than the threshold value, indicating all the variables are accessible and none of them should be excluded from the constructed regression model. The following table demonstrates the relationship between Zara’s and H&M’s social media advertising strategies on Instagram and consumer brand loyalty. Table 5: Social Media Advertising Strategies on Instagram and Brand Loyalty (Linear Regression) Variable Unstandardized Coefficients t Sig. Collinearity Statistics B Std. Error Tolerance VIF α 2.610 0.527 4.952 0.000 IPHO 0.101 0.104 0.978 0.329 0.997 1.003 IVID 0.245 0.063 3.897 0.000 0.993 1.007 ISTO -0.106 0.088 -1.202 0.231 0.991 1.009
  45. 45. 45 The linear regression analysis results indicate that the relationship between the IVID and LOYL variables is statistically significant at least at 95% since the Sig. of the predictor is much lower than the threshold value of 0.05. Considering positive B coefficient, it is possible to interpret the link between the variables as follows: the more actively Zara and H&M post videos on Instagram, the more social media users are intended to purchase fashion goods and accessories from the brands in the future. The Sig. of the remaining variables is higher than the threshold value, meaning they do not establish any statistically significant link with the dependent variable. Twitter is another social networking services selected for the purpose of this dissertation. The linear regression function is performed in the SPSS software package to identify whether or not Zara’s and H&M’s social media advertising strategies on Twitter predict consumer purchase intention. Table 6: Social Media Advertising Strategies on Twitter and Customer Purchase Intentions (Linear Regression) Variable Unstandardized Coefficients t Sig. Collinearity Statistics B Std. Error Tolerance VIF α 3.362 0.371 9.050 0.000 TPHO 0.146 0.067 2.187 0.030 0.997 1.003 TVID -0.081 0.061 -1.331 0.185 0.995 1.005 TSTO 0.059 0.061 0.959 0.339 0.993 1.007 The Sig. of the TPHO variable is lower than 0.05, which is the threshold value. The table above also indicates that the relationship between the variables is positive since B coefficient of the predictor is positive. Therefore, the more actively Zara and/or H&M post photos on Twitter, the more social media users are intended to purchase fashion products and accessories from the companies. The remaining variables do not have any predicting power over the WILL variable since their Sig. is higher than 0.05. The following table shows whether there is a correlation between Zara’s and H&M’s social media advertising strategies on Twitter and brand loyalty.
  46. 46. 46 Table 7: Social Media Advertising Strategies on Twitter and Brand Loyalty (Linear Regression) Variable Unstandardized Coefficients t Sig. Collinearity Statistics B Std. Error Tolerance VIF α 2.640 0.408 6.471 0.000 TPHO 0.082 0.073 1.119 0.264 0.997 1.003 TVID 0.160 0.067 2.388 0.018 0.995 1.005 TSTO 0.115 0.068 1.700 0.091 0.993 1.007 Only one independent variable, namely TVID statistically predicts the LOYL variable at 95% since its Sig. is equal to 0.18, which is much lower than the threshold value. Considering positive B coefficient of the independent variable, it is possible to interpret the established relationship as follows: the more actively Zara and H&M post videos on Twitter, the more social media users are intended to purchase fashion products and accessories from the companies in the future. The constructed regression model is reliable since the VIF is within its normal range (n =5). 4.5. Summary It is relevant to summarise that social media advertising strategies have more influence on customer loyalty and attitudes in comparison with traditional media. Furthermore, photo posting and video posting have been discovered as the most popular social media advertising strategies adopted by Zara and H&M. At the same time, the perceived popularity of sponsored stories is not considerable. It can be summarised that there is a strong correlation between the brands’ social media strategies such as display ads on Facebook and photo posting on Instagram and consumers’ intention to buy. In turn, consumers’ loyalty to Zara and H&M is predicted by video posting on Instagram and video posting on Twitter.
  47. 47. 47 Chapter 5: Conclusions and Recommendations 5.1. Introduction The purpose of the fifth chapter is to discuss the produced analysis outcomes in the light of the previous researchers’ works (Kabadayi and Price, 2014; Barnes, 2014; Wirtz et al., 2013). On the basis of this discussion, the final conclusions are drawn. The most important research limitations are outlined and a set of practical recommendations as how fast fashion brands could enhance their social media marketing strategies to engage the UK audiences in a more effective way are formulated. 5.2. Concluding theMain Findings The main aim of this dissertation was to analyse the impact of the social media advertising strategies employed by Zara and H&M on such customer reactions as purchase intention and brand loyalty. This aim has been achieved using both graphical and statistical analysis methods applied to primary and secondary data. The methods of analysis employed in this project included graphical representation and linear regression. The first research objective was to examine the ways in which social media advertising can affect customer purchase intention and brand loyalty in the fast fashion industry. This goal was achieved in the literature review chapter. Using the findings from the second chapter, it is relevant to conclude that there are numerous models and frameworks, which explain consumer behaviour on the online environment. For instance, Hoffman and Fodor (2010) distinguished between the four key elements of customer motivations, including consumption, creation, connection and control. The Behavioural Perspective Model is another customer behaviour theory applicable to the online environment (Foxall, 1988). In accordance with Vishnu Menon and Sigurdsson (2016), all consumers pursue two types of reinforcements, namely informational and utilitarian. The researchers reported that consumers who pursue reinforcements are more likely to browse the information about products and brands online. Finally, the 3M model implies that there are four groups of customer traits (i.e. elemental, situational, compound and
  48. 48. 48 surface traits), which impact the decision-making process (Mowen, 2000). However, 3M is considered as excessively complicated and impractical for use (Kang and Johnson, 2015). The next objective of this project was to identify the most popular social media advertising practices adopted by fast fashion brands. In accordance with the literature review chapter, sponsored stories, display ads and video and photo posting are the main forms of brand advertising in the online environment (Zhang and Mao, 2016). The analysis results demonstrated that photo positing was the most popular advertising strategy with both Zara and H&M. It can be concluded that the brands actively use all three social networking services, namely Facebook, Twitter and Instagram to post photos of their goods and services. These findings are in keeping with Taylor and Alonso (2014) who also acknowledged that photos were strongly preferred by the internet users who visited a brand’s social media web page. Further analysis demonstrated that although video posting was perceived as less popular with Zara and H&M, the popularity of this social media advertising strategy was still evaluated as high. The perceived popularity of Facebook as a tool for posting videos was also evaluated as high. In turn, the popularity of video posting on Twitter was not considerable in comparison with the remaining social networking services. Similarly to this study, Vishnu Menon and Sigurdsson (2016) reported that although Twitter supported the function of video sharing, this feature was not highly popular with organisations comparing to alternative social networking services. It can also be concluded that the extent to which Zara and H&M use sponsored stories as a means of advertising is low across all three social networking services. The third dissertation objective was to compare the effectiveness of social media strategies and traditional advertising employed by Zara and H&M in the UK market. This objective was fully attained in the data analysis and findings chapter. Using the results from the fourth dissertation chapter, it is relevant to conclude that display ads on Facebook, photo posting on Instagram, video posting on Instagram and video posting on Twitter are the most effective social media advertising strategies for fast fashion brands to promote purchase intention and loyalty in British customers.
  49. 49. 49 The impact of Web 2.0 advertising on consumers’ purchase intention was investigated by Hajili (2014). Similarly to this dissertation, the researcher analysed primary data collected from social media users and arrived at the conclusion that social media facilitated the social interaction of consumers, which in turn, increased their intention to purchase (Hajili, 2014). As argued by Schultz (2016), advertising on social media is more effective on social media due to the lack of communication barriers. Nevertheless, Hajili (2014) did not differentiate between online and offline advertising. This project attempted to overcome this limitation by examining whether social media advertising strategies had more influence on consumer loyalty and attitudes in comparison with traditional advertising. It is relevant to conclude that Zara’s and H&M’s social media advertising is perceived by their consumers as more attractive comparing to traditional advertising. Furthermore, the brands’ online advertising has stronger impact on consumers’ buying intentions. In their empirical study, Taylor and Alonso (2014) arrived at the conclusion that photo posting was an effective marketing initiative that allowed companies to attract consumers’ attention to their goods and services on social media. Similarly to this project, the researchers investigated the engagement outcomes of social media advertising strategies in the online environment. At the same time, the most popular social networking services were reported by Fulgoni and Lipsman (2014) to provide businesses with different approaches to advertising. Therefore, it is relevant to study the impact of online advertising on consumer outcomes at the example of several social networking services. Nevertheless, the scope of Taylor and Alonso’s (2014) was limited to Facebook. This project attempted to overcome this limitation by examining how the UK customers responded to the social media advertising strategies employed by H&M and Zara on Facebook, Twitter and Instagram. It is relevant to conclude that photo posting and video posting are the most popular social media advertising strategies adopted by Zara and H&M. These findings are in keeping with Touchette et al. (2015) who also reported that the extent to which video content attracted consumers in the online environment was high. However, the perceived popularity of sponsored stories across the social networking services was discovered as low. These results contradict Pihl (2013) who found that both Zara and H&M actively relied on this advertising strategy. It should be critically
  50. 50. 50 remarked, however, that Pihl (2013) failed to measure customer outcomes such as purchase intention and brand loyalty. Alternatively to Pihl (2013), this dissertation addressed the identified gap and established the link between Zara’s and H&M’s social media advertising strategies and consumers’ purchase intention and brand loyalty. Using the findings from the data analysis and findings, it is relevant to conclude that there is a strong correlation between the brands’ social media strategies, including display ads on Facebook and photo posting on Instagram and consumers’ willingness to purchase. At the same time, consumers’ loyalty to Zara and H&M is predicted by video posting on Instagram and video posting on Twitter. Therefore, the fashion brands should put a heavier emphasis on these social media advertising strategies in order to maximise the positive customer outcomes (Kang et al., 2013). 5.3. Research Limitations This dissertation is focused only on two fashion brands, namely Zara and H&M, which can be viewed as a limitation to its generalisability (Saunders et al., 2007). The inclusion of the social media users who prefer purchasing from alternative fashion brands such as L’Oréal, Chanel or Louis Vuitton could have resulted in more comprehensive and generalisable research outcomes. Another limitation concerns the use of a non-random sampling technique. The point is that it is impossible to extrapolate the identified options and views to all fashion consumers using this technique (Richie et al., 2013). The number of customers who could be surveyed is another limitation. In accordance with Ghauri and Gronhaug (2005), questionnaire surveys have a low response rate since only a proportion of those who are invited to participate in a survey would actually take part. From the 700 potential respondents who had been invited, only 200 returned their questionnaires. Therefore, the response rate is equal to 29%. This project has not been ensured against the social media users’ bias and errors, which can be viewed as a limitation to the validity and reliability of
  51. 51. 51 the produced analysis findings (Blumberg et al., 2005). The use of the Likert scale methodology is another potential limitation since the research participants could overreact or underreact to certain questionnaire questions (Zikmund, 2000). 5.4. Recommendations The fourth objective of this dissertation was to develop recommendations concerning how the social media marketing strategies of fast fashion brands can be enhanced to engage the UK audiences more effectively. It can be recommended that fashion brands should put a heavier emphasis on display ads as a means of social media advertising. By adding attractive graphical elements to the content of their web pages, e-mails and other forms of web communication, fashion brands are capable of contributing to a higher level of customer interest in their brands (Zhang and Mao, 2016). However, this recommendation applies only to Facebook since it is the only social networking service that employs this strategy (Kabadayi and Price, 2014). It is recommended that fashion brands should more actively post photos and videos on Instagram and Twitter. According to the research outcomes, there is a strong positive correlation between the frequency to which fashion brands post photo and video content on these social networking services and consumer outcomes in terms of purchase intention and brand loyalty. Therefore, by following this recommendation, fashion brands are able to promote social media users’ purchase intention and loyalty (Touchette et al., 2015). It should be noted that this recommendation does not apply to Facebook. This project failed to establish any statistical link between posting photos and videos on Facebook and the consumer outcomes. The future researchers should also be provided with a set of recommendations as how to overcome the identified limitations. Thus, it is recommended that the future researchers should gather primary data not only from Zara and H&M customers, but also from those social media users who prefer purchasing fashion goods from L’Oréal, Chanel or Louis Vuitton. It is also
  52. 52. 52 recommended that the future researchers should introduce specific measures of consumers’ loyalty and willingness to purchase into the conceptual framework.
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