MSc Thesis - Global Luxury Management 20152016- Sophie Djordjevic

SOPHIE DJORDJEVIC – MASTER THESIS – GLOBAL LUXURY MANAGEMENT 2016 1
ENGAGEMENT,
INFLUENCE AND USER
EMPOWEREMENT IN
ONLINE COMMUNITIESSKEMA Business School
North Carolina State University
MSc Global Luxury Management 2015-2016
Written by
Sophie Djordjevic
Supervisor:
Isabella Soscia

ABSTRACT
This study aims at providing an overview of online engagement and its implications
on customers’ purchasing decisions. It firstly deals with the theoretical background that led
to today’s definition of online engagement to, in a second time, observe how this
engagement is applied online today thanks to the new social media means and how brands
and influencers are taking advantage of it. This section highlights that brands are losing
power of reach and engagement to the benefit of influencers. After defining what an
influencer is and how they can generate engagement, this paper shows how great influencers
are at prescribing purchase to users. Finally, the user himself is being empowered as he is now
able to talk and post freely as wells as advising others. A netnographic research will be
conducted to verify three hypotheses stated from the problematics that have arisen from the
literature review.
Keywords: Online engagement, online community, brand, influencers, prescription
purchase, user-generated-content, beauty industry.

THANKS
First of all, I would like to thank personally my thesis supervisor Isabella Soscia, who is
also my program director, for all the help and kindness she gave me and my fellow GLMers
throughthe wholeyear. Having aperson like her asan advisor when you want tostart acareer
in the known for its toughness yet magical field of luxury is a great push and encouragement
to go finally free and fly from your own wings.
Thanks, SKEMA, for the excellent education they have provided me but also because
they helped me growing up by making me able to go abroad and live adventures I will never
forget. Thanks a lot to Munich Business School, where I have spent the most memorable year
of my studies, not only because of the Oktoberfest and the friends but also because of their
close care to their students. A special thanks to my luxury teacher Ms. Bookhagen, with
whom I have learned so much about luxury. Thanks to NC State for having me for a semester
too, where I could finally live the American dream.
I would also like to thank my parents greatly for their unconditional support, love and
pride. Most importantly, my mother, for remembering me every day to write this thesis so
that she can finally read it. Also, because as it is the end of school for me now, for all the
amazing hours she spent trying to make me a better and smarter person with the promise of
a brighter future. I would have never succeeded to be where I stand without her and my
father’s support.
I would also like to thank the people I have met during my internships because they
have been of great help in getting me to have these insights and also for their inconsiderable
trust in me. Thanks, Alex, for being my mentor through all my studies and opening me so
many doors. Thanks a lot to Aurelia, that have always granted me time to write this thesis
while being an incredible source of inspiration and guidance for the “I am soon starting my
career” me. She has motivated me to be, as she is, a great, great manager.
Finally, I will thank my SKEMA friends. Hélène, who has helped me with the thesis
writing by always be here to answer me but also for being the amazing friend she is. Emeric,
which has been so inspiring, but also reassuring with having the same troubles getting into it
as I did. Paul-Henri, with whom I wrote a first thesis draft back when we were in Munich
together but also for being like a brother to me, all the time. And finally Julie, which has been
my best friend through this whole year and with whom I’ve experienced a lot about life and
friendship but also spent the best time I have ever had going to class.

TABLE OF CONTENT
ABSTRACT.................................................................................................................................... 3
THANKS ....................................................................................................................................... 4
TABLE OF CONTENT...................................................................................................................... 5
EXECUTIVE SUMMARY.................................................................................................................. 7
LIST OF TABLES............................................................................................................................. 9
LIST OF FIGURES......................................................................................................................... 10
INTRODUCTION.......................................................................................................................... 11
I. BACKGROUND ....................................................................................................................... 11
II. RESEARCH QUESTION AND OBJECTIVES ......................................................................................... 13
III. METHODOLOGY ..................................................................................................................... 13
IV. RESOURCES........................................................................................................................... 14
LITERATURE REVIEW .................................................................................................................. 15
I. CONSUMER ENGAGEMENT MARKETING, A VERY RECENT CONCEPT....................................................... 15
BEFORE ENGAGEMENT MARKETING ....................................................................................................... 15
WHAT IS CONSUMER ENGAGEMENT....................................................................................................... 17
HOW TO EMBRACE ENGAGEMENT MARKETING TO DRIVE SALES? ............................................................... 25
II. ONLINE ENGAGEMENT: FROM THEORY TO FIELD APPLICATIONS........................................................... 28
WHAT ARE THE MEANS AVAILABLE TO FIRMS?......................................................................................... 28
WHAT IS AN ONLINE COMMUNITY? ....................................................................................................... 31
EMANCIPATING FROM BRAND COMMUNITIES: INFLUENCERS...................................................................... 34
III. USER EMPOWERMENT AND PRESCRIPTION PURCHASE ...................................................................... 37
USER-GENERATED CONTENT FLOODS ONLINE COMMUNITIES...................................................................... 37
PRESCRIPTION PURCHASE..................................................................................................................... 38
RISE OF MICRO-INFLUENCERS ............................................................................................................... 40
IV. SUMMARY OF THE LITERATURE REVIEW AND HYPOTHESES FORMULATION ............................................. 42
SUMMARY OF THE LITERATURE REVIEW.................................................................................................. 42
HYPOTHESES FORMULATION................................................................................................................. 43
METHODOLOGY AND PERSONAL RESEARCH................................................................................ 44
I. METHOD CHOSEN: NETNOGRAPHY.............................................................................................. 44
WHAT IS NETNOGRAPHY?.................................................................................................................... 44
THE FOUR STEPS OF NETNOGRAPHY ....................................................................................................... 45
II. NETNOGRAPHY APPLICATION..................................................................................................... 45
ENTRÉE ............................................................................................................................................ 45
DATA COLLECTION .............................................................................................................................. 47
ANALYSIS AND INTERPRETATION ........................................................................................................... 48

RESEARCH ETHICS AND MEMBERS’ VALIDATION ....................................................................................... 49
III. RESEARCH RESULTS AND HYPOTHESES VERIFICATION........................................................................ 49
H1: USERS ENGAGE MORE EFFECTIVELY WITH INFLUENCERS THAN WITH BRANDS .......................................... 49
H2: USERS ENGAGE MORE EFFICIENTLY AND ARE GREATLY ENGAGING OTHERS BY CREATING USER-GENERATED-
CONTENT.................................................................................................................................................. 51
H3: INFLUENCERS ARE MORE LIKELY THAN BRANDS TO LEAD TO PURCHASING DECISION AND THEREFORE ARE
BETTER PRESCRIBERS THAN BRANDS............................................................................................................... 53
IV. RESEARCH CONCLUSION, RECOMMENDATIONS AND LIMITATIONS ....................................................... 58
RESEARCH CONCLUSION AND RECOMMENDATIONS .................................................................................. 58
RESEARCH LIMITATIONS....................................................................................................................... 60
CONCLUSION.............................................................................................................................. 61
SOURCES.................................................................................................................................... 63
ANNEXES.................................................................................................................................... 67

EXECUTIVE SUMMARY
The current debate around social medias and their impact on marketing strategies is
leading to a reconsideration of the customer engagement. This study aims at showing the
different ways online communities generate engagement and at observing what it implies on
customers’ purchasing decisions.
First and foremost, it is capital to assess how the concept of customer engagement
has arisen from academic literature since the second half of the twentieth century. Its review
and application to the ever-growing online world has induced a major shift in brands’
communication strategies. Secondly, the study observes the application of the concept to
the field, i.e. on the online medias, and questions how brands are currently dealing with
customer engagement. Our highly-connected era has seen the arrival of brand new experts
and masters of communications such as bloggers or vloggers, commonly and generally
named “influencers”. These influencers are gaining every day more importance in
comparison tobrandsand are increasingly solicited in order tohelpdriving more engagement
and conversion to brands. While these influencers have appeared to be a new major force in
the online world, we can see that customers themselves have taken a piece of the pie that is
this new land of freedom of speech and creativity in order to gain more bargaining power.
Indeed, this was initiated as users started being able to express positive or negative feelings
about brands and products they consume, and ended up developing towards another
phenomenon: the prescription purchase. People that do navigate on social media tend to
grant more trust and credibility toboth their peersand experts(under the form of influencers)
which results in brands being less and less able to drive them to buy products through their
own media channels. Brands are currently turning towards influencers both on a macro and
micro level for help selling and promoting products, hence driving a whole new stream of
information but also a different purchasing model. The whole research process will be
conducted in relation with the beauty industry, as it is currently a sector showing high levels
of conversations and interesting trends on social medias.
The methods of analysis used in this dissertation include in a first time a review of
academics literature specialized in customer behavior and purchase-decision drivers but also
researches about online communities and online user engagement. Considering the fact that

the phenomenon is currently happening, mostly if linked to the beauty industry, the lack of
recent academic background has led to the use of specialized press and reports from
renowned agencies helping companies on a daily-basis in managing online engagement and
presence but also influencer marketing and online conversion. In order to dig deeper in the
heart of the subject, a netnography will be driven. This method helps navigating and
analyzing online communities as an ethnography does to a society, and has revealed to be
the most relevant technique to help draw real-life conclusions for this research.
The results of the study show that indeed, influencers are winning over brands in
engaging online users. By using the example of a co-created make-up collection between a
renowned high-end make up brand and an influencer, we realized that the influencer got
better engagement rates. Moreover, the results proved that users are willing to engage in
such campaigns on their own, by generating content posted on their personal accounts and
which are linked to the campaign by the use of hashtags. The results also led to demonstrate
that, the smaller the influencer, the better the engagement rate. Yet, this remains to be
moderated as we realize that top influencers of the beauty industry still manage to reach
above average engagement rates. Finally, the last results show that users are more likely to
buy a product thanks to the influencer’s prescription rather than by the content posted by the
brand itself, even though the content is similar. In order to verify this, we went through users
comments but also analyzed the data publicly available to us about the collection.
The original idea of this thesis was to combine user online engagement to current
means available to brands and trends on social media. As it is still quite recent subject to
observe, the thesis was relevant in offering an overview of the phenomenon with the basis
of the academic research available on related topics. Yet, we recommend to further analyze
these relationships by developing tools able to better predict such trends, hence enabling
brands to adapt more quickly and more efficiently to engage their customers with content
they are actually looking for, in ways there are comfortable with. This implies to have greater
academic research aiming at developing general learnings that could be taught in business
and communication schools as a necessary skill to acquire in today’s world, that is growing
towards hyper online connectivity and interactions between brands, influencers and users.

LIST OF TABLES
Table 1. Fundamental propositions defining the conceptual domain of customer
engagement p. 20
Table 2. TooFaced Instagram Engagement Data p. 49
Table 3. NikkieTutorials Instagram Engagement Data p. 49

LIST OF FIGURES
Figure 1. Theoretical model of Customer Engagement p. 18
Figure 2. The conceptual model of Customer Engagement Behavior p. 22
Figure 3. The S-O-R Conceptual Framework of Online Engagement p. 23
Figure 4. The S-O-R Model of Hypothesized Online Consumer to Brand Relationship p. 30
Figure 5. Engagement by audience p. 40
Figure 6. Sample Screenshot of typical posts to observe on @NikkieTutorials and
@TooFaced on Instagram p. 46
Figure 7. Sample Screenshot of @NikkieTutorials Snapchats p. 58

INTRODUCTION
I. BACKGROUND
“Markets are conversations” stated Locke, Levine, Searls and Weinberger in 2000.
Indeed, as visionary as they were back at the beginning of the 21st century, their analysis has
never stopped being confirmed ever since. The explosion of the online world has led to a real
shift in the way companies communicate with the society. Indeed the apparition of social
platforms, starting with Facebook in 2008, have introduced new ways for people to freely
speak and raise their voice.
Thisevolution isamajor stake for companies.Indeed,brandsare activelytryingtoengage
with users and to encourage them to share about their brand experience, their feelings and
reviews of the products they are consuming. The reason why? It has been proven by various
consulting companies such as L2 inc. that being able to engage a customer leads to a better
conversion rate online. Yet, the greatest part of the work is to be done i.e. finding a way to
engage customers and to deliver them with content helping in doing so.
For luxury companies, this matter is of high relevance as they have proven themselves to
be, over time, the best at nurturing their clients with fine attention and care in order to turn
them loyal, understand: better buyers. Known for being incredibly cautious about their
communications, luxury brands started by fearing online social networks as they imply a loss
of control over the content posted and related to them. Yet, in 2016, not being able to
animate your community via online tools is out of the question. The people want it, so the
brands have to give it to them.
The beauty industry has been showing itself very innovative on the online battle field.
Indeed, the apparition of various small brands relying only on word-of-mouth and on
following customer to develop notoriety like Too Faced for instance. These have been able
to develop such powerful communication that they have started to gather millions of
followers all social networks taken together. This resulted in an electroshock in the industry
and drove all the top beauty brands, mostly led by the gigantic l’Oréal Group machine, to
wake up and enter the fight for engaging followers. Yet, one question as arisen from this
fight: how to get the customer to engage with a brand? Is this effort really worth my return-
on-investment? Is it really impacting the purchasing decisions of my customers?

The academic literature on the topic of customer engagement as taken some time to
build up since the first half of the twentieth century. Indeed, from the first steps of defining
what is the marketing mix (Bowden, 1964: Cullinton 1948) to the first notions of service
marketing including the possibility of co-creation with the customer (Eiglier & Langeard,
1987), the worldwide web as we know it was born. It took a few more years to understand the
stakes of engaging customers on an emotional and behavioral stage (Brodie et al. 2011)
offline and then to drive and adapt the concept online. Indeed, in 2010, “90% of the
companies said that online customer engagement is either essential or important to their
organizations” (Mollen & Wilson, 2010).
Building up on that, brands have started to design strategies to apply on online medias in
order to recruit more customers and to convert them into buyers. Indeed, an engaged
customer is buying more often (Van Doorn et al, 2010). Yet, more recently, opinion leaders
have emerged from the customers mass, thanks to their expertise and knowledge in a
particular field (Digiday, 2016). These influencers have shown themselves to generate far
more engagement as, to the eyes of the always scanning connected 2016 customer, they are
considered to be more trustworthy and credible than brands in claiming a product is better
than another because, at the end of the day, they are one of us (Hsu et al., 2013).
Finally, customers that have perceived this evolution have started to connect to both
brands and influencers on a personal level by being themselves content initiators. This was
the birth of the User-Generated-Content (UGC). UGC has been now proven to be a great
conversion rates improver (Zhang & Sarvary, 2014). Yet, it is not the content that converts at
the end of the day it is the user that created it. He has the role of a prescriber, a micro-
influencer, in the purchasing decision of others. His knowledge and trustworthiness leads the
other users to surrender to him and let him make the final decision for them (Mendes-Filho &
Tan, 2009).
The original objectives of this study are to determine what is customer engagement and
how it applies to the online world, to demonstrate the techniques driving engagement but
also to assess and observe the different powers at stake i.e. brands, influencers and users.
The final objective is to find out who, at the end of the day, is the greater converter from
content to purchase.

II. RESEARCH QUESTION AND OBJECTIVES
This research paper will aim to answer the following question:
In which way online communities generate engagement and what does it imply on
purchasing decisions of customers?
While answering this question, this research paper will complete three objectives:
1. Explain what is customer engagement and how it is perceivable online
2. Demonstrate techniques generating online engagement
3. Using the beauty industry as an example, show what are the sources of engagement
and what results they obtain in converting users.
III. METHODOLOGY
To answer the research question and its the three related objectives we will first review
the literature available on the different key concepts stated in the introduction: marketing
mix, service marketing, customer engagement, online customer engagement, online
community, influencer, user-generated-content, prescription purchase and micro-
influencers.
In a second part of the dissertation, we will proceed to a quantitative and qualitative
research by using the netnography method. A netnography uses the same mechanisms as an
ethnography (i.e. the study of a society) but applied to the online world. As a guidance to
shape the research, we will use the four-step model developed by Kozinets in 2002. The
personal research will have as objective to validate or invalidate three hypotheses developed
from the literature review. The community chosen as the subject of the research will be a mix
of a luxury beauty brand, Too Faced, and a top-tier beauty influencer, Nikkie Tutorials. This
subject has been chosen as both the protagonists collaborated in developing a make-up
collection at the time I was writing the dissertation. It also matched the internship I was doing
while writing my thesis, in the global E-Commerce service at Coty inc.

IV. RESOURCES
As both a SKEMA and NC State student at the time while writing the dissertation, I had
access to both libraries. They granted me access to academic papers and researches from
renowned journal via websites like Emerald or J-Stor, which I used a lot to gather my
literature. I also used Google Scholar when I was in need to check for whole books.
Thanks to my internship, I was granted access to content such as insight reports and
studies from great consulting company on the online field like L2 inc. or Digiday. These were
very useful when in need of recent numbers and conclusions from current online and digital
trends that were too recent to be already observed and analyzed in the academic field.
Finally, I also consulted a lot the social media channels and luxury and marketing websites
such as LuxuryDaily or AdNews, in order to gain even more insights on what was trending
and get an insider look over these subjects. It was also helpful for me to follow brands (mainly
from the beauty industry) and influencer accounts on various social networks like Instagram,
Snapchat or Facebook, and to monitor the appearance of new trendy hashtags in order to
check for UGC.

LITERATURE REVIEW
This part of the dissertation aims at providing the reader with a comprehensive,
insightful academic background in order to answer both the research question and its three
associated objectives. It will take the reader through three parts. The first part will deal with
analyzing all the marketing concepts that led to the emergence of the one with most interest
to us: consumer engagement. The second part will help in understanding how the concept
applies to online communities by observing the two forces using it: brands and influencers.
And the final part will describe the rise of a new prescribing power in the online world, the
user. This whole part will also include examples mainly related to the beauty industry.
I. CONSUMER ENGAGEMENT MARKETING, A VERY RECENT CONCEPT
BEFORE ENGAGEMENT MARKETING
1. Starting with the Marketing Mix
The concept of marketing mix first saw the light thanks to the work of Neil H. Borden
(1964). He began stating that a marketing executive was “a mixer of ingredients” (Culliton,
1948) which has to mix elements inventively from his marketing policies to be profitable.
Elaborating from that, Borden, ended up listing twelve points that were, to him, constitutive
of the “mix of ingredients” the marketing executive has to play with to make the best recipe
for his company.
The marketing mix concept has been substantially simplified, mostly for “pedagogical
reasons” (Grönroos, 1994) and finally became the very famous “4Ps” that every business
school worthy of the name teaches to its students in the Marketing 101 class. These
simplifications of Borden’s initial concept stressed out some economists such as Collier (1991)
or Lambert and Harrington (1989). Both of their input to the marketing mix was emphasizing
on the necessity of a more service-oriented theory to make service a general responsibility
for every marketer. They argued that the marketing mix as it was, was not well fitted to
accommodate the complexity of marketing which concluded in the separation of different
marketing activities which was neither cost-efficient or helping raise awareness.
Later on, in 1992, Möller (as quoted by Grönroos in 1994) will crystallize these
objections to the marketing mix highlighting that “from the functional view of marketing

‘mix’ management our focus has extended to the strategic role of marketing, aspects of
service marketing, political dimensions of channel management.” Indeed, the current
formulation of the Marketing Mix is not sufficient to answer all customers’ needs, hence
shifting the role of the manager towards a more comprehensive view.
2. Then appeared the first notions of service marketing
The first draft of service marketing has been theorized by Eiglier and Langeard (1987)
that have developed a mapping of what they call “Servuction.” Servuction is the fact of
producing a service, as production is to the product. The concept can be defined as the
essential component of the manufacture of services, aiming to determine to what extent its
production is different from the production of a good.
When providing a service, the customer is included within the servuction phase
whereas he is usually not involved in the manufacture process of a good. Therefore, he assists
to each step of it, and he helps with the marketing of the service. Doing so, Eiglier and
Langeard noticed that the relation between a customer and the employee providing the
service, which are not marketers per se, has an impact on the way the customers will interact
later with the service provider. These “part-time marketers” (Grönroos, 1994) are indeed
more prone to generate sales and to turn customers to be highly loyal. Their work results in a
better relationship between both of the parties as they can interact with each other directly
during the conception of the service, which was not possible for a product so far.
Sabadie and Vernette (2005) have analyzed the servuction idea of Eiglier and
Langeard and explained it as the interaction of three basic elements: the client, the physical
support or “inanimate environment” and the “contact personnel” (which is, in other words,
the service provider). Their theory highlights the importance of the process, putting the
service as the inseparable result of production versus how it is provided. The “service
encounter” is “the moment of truth” (Eiglier & Langeard, 1987) in which clients and
employees are co-producing the service. This simultaneity between production and
consumption leads to different conclusions: the quality of the interaction between client and
employee is decisive in the success of the servuction. Moreover, by “co-servucting”,
communications are starting, therefore creating a reciprocal engagement between the
service provider and the customer that can end up in the development of a long-lasting
relationship that was before either underestimated or just not thought of.

3. From service marketing to relationship marketing
Relationship marketing is a concept that was born in the nineties. Said to be a
fundamental “paradigm shift” in marketing (Grönroos, 1994), relationship marketing has
seen the day thanks to the evolution of the classic Marketing Mix some marketers have
foreseen into service marketing. Relationship marketing can be defined as follows:
“Marketing is to establish, maintain, and enhance… relationships with customers and other
partners, at a profit, so that the objectives of the parties involved are met. This is achieved by
mutual exchange and fulfillment of promises” (Grönroos, 1990, p138). At that time, the
concept was still to be fully defined, yet some scholars such as Henrik Calonius had already
understood the capital value of the promise within the definition. Indeed, in 1988, Calonius
emphasized the importance for marketing of notonly promising its customer with things, but
creating momentum fulfilling these very promises. In his view, the customer should not be
thought as “a passive counterpart” but has “equally important” to achieve better customer
satisfaction and retention rate thusresulting in higher profitability in the long run.Confirming
this view, Philip Kotler (1992) insists on the importance for companies to “move from a short-
term transaction oriented goal to a long-term relationship-building goal.”
Nevertheless, the recrudescence of such a movement feels like we are “back to the
future” (Zineldin & Philipson. 2007) as “relationship oriented marketing practices date back
to the pre-Industrial era” (Zineldin, 2000). Indeed, if for example, we look at brands such as
Kiehl’s: the brand started as a small pharmacy in the Upper East Side in New York in 1851.
Thanks to the very high relationship level John Kiehl established with his female neighbors
(i.e., they were his personal guinea pigs and tested all his formulas, helping him to improve
them), the brand continued to grow bigger all over the U.S. and then expanded all over the
globe. As a result, L2 inc. has put Kiehl’s at the 8th position in the global top beauty brand in
Digital thanks to their top of the range loyalty programs connecting the brand with
customers from off to online.
WHAT IS CONSUMER ENGAGEMENT
1. General definition
Consumer engagement is a “vital component of relationship marketing” (Vivek et al.
2012), yet it has been associated with marketing for approximately ten years now. Indeed,

the Marketing and Science Institute (MSI), whose research on consumer engagement has
been running since 2006, ended up highlighting consumer engagement as a “key research
priority for 2010-2012” (Brodie et al. 2011). They came up with this statement because of “all
the rapid changes in communications […] companies are discovering new ways to create and
sustain emotional connections with the brands […] thus engaging consumers” (MSI, 2006).
Therefore, businesses and brands are highly focusing on going “beyond purchase” (MSI,
2010) to generate better engagement from their consumers. It is revolutionary in a sense
that, it does not mean that a customer has to purchase your brand to be able to connect to
you (Vivek et al. 2012).
Brodie, Hollebeek, Juric and Ilic in 2011, began researching how to define customer
engagement, came up with five fundamental propositions (see Table 1). Analyzing and
compiling the five proposals led them to reach a complete definition of customer
engagement: “Customer engagement (CE) is a psychological state that occurs by virtue of
interactive, co-creative customer experiences with a focal agent/object (e.g., a brand) in focal
service relationships. It […] and exists as a dynamic, iterative process within service
relationships that co-create value […]. It is a multidimensional concept subject to a context-
and/or stakeholder-specific expression of relevant cognitive, emotional and/or behavioral
dimensions” (Brodie et al. 2011).

Table 1.
Fundamental propositions defining the conceptual domain of customer engagement
(Brodie et. al 2011)
In 2012, Vivek, Beatty, and Morgan developed a theoretical model for Customer
Engagement (see Figure 1). As well as defining customer engagement, this model shows all
the different connections that builds around and comes out of it. Indeed they began drawing
reactions aiming at identifying what Customer Engagement is. These are “involvement” and
“customer participation” and can be summed up briefly by: the more involved and
participative a customer is into what a brand does, the more he will engage with this say
brand. This claim relates to the definition already provided by other scholars of Customer
Engagement (Brodieet al.,2011; Van Doorn et al.2010).However,what is even more relevant
in this model is the part where it shows on what customer engagement has an impact on. The
model also helps in understanding how broad the scope of such a concept is and how
important it can be for companies. Indeed, once the customer is engaged it impacts on:
 The value perception of the brand that grows positively the more the customer
is engaged

 The level of trust the customer grants to the brand increases
 The customer begins to commit on an affective standpoint with the brand
 The customer has now developed a positive attitude towards the brand and
therefore communicate more and more about it: it is word-of-mouth
 An engaged customer starts to be loyal to the brand. It is important here to
draw the difference between loyalty and customer engagement. Indeed,
customer engagement does not impact the fact that he may purchase or not.
An engaged customer is the one that co-creates with a brand and that will be
willing to exchange and communicate with it. A loyal customer is a statement
implying that the customer has made a decision between competitive brands
he compared and decided to go with one of them and to buy frequently from
this very brand (Jacoby and Chestnut, 1978).
 Finally, an engaged customer will want to act within the brand community i.e.
by connecting with other engaged customers and exchanging about products.
These customers, therefore, represent a free source of feedback for firms
which will help them improve both their product and service and keep these
customers happy and willing to recruit others. It goes only one way; customer
engagement is a “psychological process driving customer loyalty”, not the way
around (Bowden, 2009).
Consequently, various consumer engagement conceptualizations can be looked up
from different points of view. Indeed, you can, on the one hand, observe consumer
engagement from a business-oriented angle as a “repeated interaction that strengthens the
emotion, psychological or physical investment a customer has in a brand” (Sedley, 2010). On
the other hand, you can see it from a system and process perspective by stating that
customer engagement is “the intensity of customer participation with both representatives
of the organization and with other customers in a collaborative knowledge exchange
process” (Wagner & Majchrzak 2007, p20).

Figure 1. Theoretical Model of Customer Engagement (Vivek et. al 2012)
2. Motivational and behavioral impact on engagement
Customer Engagement is a concept based on both emotional and behavioral factors.
Understanding this fact and incorporating it into managerial decisions, “to engage existing
or potential customers by supporting customer-initiated engagement” can lead to significant
new business openings and outlooks (Vivek et al. 2012).
Therefore it is interesting to dig deeper into the different behavioral and affective
drivers of customer engagement to have a better comprehensive understanding of what it
implies for both clients and firms. In 2010, Van Doorn, Lemon, Mittal, Nass, etc. developed
the concept of “customer engagement behaviors” that they defined as “behavioral
manifestations toward a brand or firm, beyond purchase, resulting from motivational
drivers”. The focus here is clearly behavioral which will help us grasp the most interesting
point of view of the topic that the MSI (2010) had already highlighted as: “Customer
engagement goes beyond transactions.”
What is striking about the work of van Doorn et al. is that they managed to build a
conceptual model thanks to a compilation of different literature analysis (see Figure 2). This
model divides the customer engagement behavior into three types of factors that will affect

both his “antecedents” i.e. what will drive him towards an engaging action with a firm and
the “consequences” of his engagement.
The first factor is “customer-based”. It broadly relates to everything that is subjective
to each consumer. For instance, they link the waya customer naturally perceives and behaves
with a brand (i.e., trust or satisfaction) to traits that are proper to whom he is as an individual.
Also, they include the conceptualization of what he is expecting to take out of this
relationship i.e. his “goals” or “benefits”.
The second factor is “firm-based” and includes everything related to the company’s
equity such as brand image and perception, supporting activities and general environment
around the business. It also covers all the different aspects of basic client relationship
management such as “rewards and incentives” for customer loyalty.
The third and last factor is “context-based” which aims to integrate to the model all
the environmental factors in which both customer and brand evolve in. The constitution of
this last factor is based on the classic analytical market research framework “P.E.S.T.E.L.”
(Political, Economical, Sociological, Technological, Environmental and Legal aspects of a
macro-environment such as a region, a country or a continent). It also takes into account the
competition in this very macro-environment and the impact of informational media.
As a consequence, if efforts are made the right way to end successfully, customers will
be more engaged to the firm and at different levels: “ cognitively, affectively, behaviorally or
socially” (Vivek et al. 2012). It will lead them to identify themselves to the said firm and brand
and to become a referral for others willing to engage. “Referral” here means an organic
process in which the satisfied customer uses word-of-mouth as a way to communicate
information about a brand or product to his surroundings, which then become potential
customers. The referral impact on business can be very high, indeed, according to the New
York Times, “65% of all new business comes from referral. That means on average two-thirds
of consumers make purchases because someone they know recommended a particular
product or service” (Marketing-Schools.org, 2012).
What is notable is that consumer engagement adds up value to operations as a
support activity to make the experiences provided to consumers more interactive hence
creating and feeding a unique relationship with them (Dessart et al. 2015). This recalls the
importance of co-creation, as seen previously with servuction (Eiglier et al. 1987) because an

engaged customer is a consumer that will do a lot more for the brand by co-creating both
value and content.
Figure 2. The Conceptual Model of Customer Engagement Behavior
(Van Doorn et. al 2010)
3. Online Engagement
EConsultancy, for its Customer Engagement Report, surveyed in 2009 a various
number of companies and found out that 90% of them “said that online customer
engagement is either “essential” or “important” to their organizations.” (Mollen & Wilson
2010). Building around this statement and using the S-O-R psychology framework model
(Stimulus-Organism-Response), Mollen and Wilson deep dived into the mechanisms driving
online engagement. First of all, it is important to define what online engagement is.
Accordingly to the definitions used previously, online engagement remains to be an
attitudinal and affective way to commit to a brand. Nevertheless, it differs in the sense that
the “active relationship” is built with “ a brand personified by the website or other computer-
mediated entities designed to communicate brand value” (Mollen & Wilson 2010). Indeed,

back in 2010, social medias were not as strong as they are today in 2016. Facebook, for
example, was only two-years-old. Today, we easily count hundreds of social networking
websites that either global like Facebook, Twitter or Instagram or more locally used such as
Weibo in China. Successful brands that interact properly with their customer base must be
present on most of them, if not all.
What is of high relevance in the work of Mollen and Wilson, and that will help the
understanding of the following part of the dissertation is the conceptual differentiation
between telepresence, defined as “the experience of presence in an environment by means
of a communication medium” (Steuer 1992) and engagement.
According to their S-O-R framework from Mehrabian and Russell (see Figure 3),
telepresence comes in as the previous step before the customer gets to engage with the
brand. However, the reciprocity between these two concepts may not always be verified.
Indeed:
- “Online engagement can exist independently of telepresence” in the sense that a
customer can engage online with a brand without it being the result of telepresence.
Let’s take Kiehl’s as an example again: the brand built itself thanks to word-of-mouth
and without paying any ad space. Yet, the community that supports them is huge:
about 1,5 million followers on Facebook worldwide.
- The relation is reciprocal: on the one hand, an engaged customer will talk online about
the brand and generate more telepresence, on the other hand, this telepresence will
reach out to new customers and get them engaged.
- Last but not least, “telepresence may not automatically lead to online engagement”.
Indeed, a brand can invest millions in purchasing ad space, increasing the online share
of voice, community managing, etc. yet if the content is not perceived as qualitative
or convincing enough, the brand may not be able to engage with customers or even
worsen its perceived image in the eyes of prospects.

Figure 3. The S-O-R Conceptual Framework of Online Engagement (Mollen, Wilson 2010)
Talking about content, an engaged customer is a customer that will end up creating
content for a brand as just mentioned above. Indeed, that was the conference topic of one of
the most famous French creative agency, Babel, in May 2016 in Paris: “The war of content,
how to win it?”. When I attended this conference for my internship and thesis purposes, I
came up to realize how capital it is for a firm to create content that both engages its audience
but that also enables this very audience to create content on her own hence nurturing e-
word-of-mouth and brand e-reputation. The conclusion of this conference was that whatever
a brand does to call the attention, if the content posted is neither qualitative nor engaging
enough it will result in nothing in today’s world.
HOW TO EMBRACE ENGAGEMENT MARKETING TO DRIVE SALES?
Accordingtothe AdvertisingResearchFoundation (Meskauskas,2006),“engagement
is a prospect’s interaction with a marketing communication in a way that can be proven to be
predictive of sales effects”. Moreover, it is well known that luxury brands are highly focusing
and relying on having happy loyal customers that have a deep emotional engagement to the
brand in order to be willing to spend more than average on a product.
Indeed, as everything done business-wise, it has the fundamental vocation of driving
sales. There are two ways, ending up constituting a virtuous circle for brands, in which having
engaged customers is driving sales. The first one is that an engaged customer is more loyal
and therefore buys more (1.). The second is that an engaged customer tends to talk more

about the brand he is engaged with thus implying that he has the potential to recruit others
around him that will buy at least once to try and maybe become loyal themselves (2.).
1. An engaged customer buys more
Referring to the Conceptual Model of Customer Engagement Behavior (Van Doorn
et. al 2010), and going further in the analysis of the consequences of customer engagement,
there can be financial outcomes for both clients and firm. Indeed, the engaged customer will
maintain his engagement only if with the brand maintain a positive relationship with him. His
engagement will grow and be “more frequent and more intense” i.e. he will tend to turn to
the brand more often and with greater interest resulting in more buying. Let’s take a beauty
industry example to illustrate. Nikkie is a Dutch blogger owning the very famous and
influential YouTube and Instagram channel “NikkieTutorials” that each almost reaches 4
million followers today. As a perfect “Gen Z” icon, she is now sharing lots of content through
her Snapchat account. I have been following her now for months, and I have come to realize
that she has been influenced by brands and other bloggers into buying products after reading
and viewing their appraising reviews, tons of color swatches and mini videos made to show
you the product features. She is now addicted to various brands and is always pre-ordering
or ordering on the release date all of their new products. She is also eager to put her hands
on all the past collections (limited or continuous) and the often out-of-stocks products, and
this at any price. Very often, she would “snapchat” herself buying these products full price
and, for products that often run out of stock, she will sometimes buy 2 or 3 of them just to
make sure she has enough. Today, as make-up trends have an incredibly profound impact on
social media, and as there are every day more bloggers and influencers like Nikkie, brands
realize that there is a huge pool of consumers brands to capture and engage with. Once
“captive”, they can convert them into recurrent buyers and brand addicts
2. Engagement and sales: the virtuous circle
According to Kumar et al. (2010), engaged customers are adopting “referral behavior
and word of mouth behaviors” which tend to develop brand equity and therefore brand
awareness. Consequently, it results in a higher brand recognition based on reviews and
appraisals made by private persons that actually believe in the brand’s value for them. This is

of capital importance for luxury brands that aspire to create special and personalized
experiences for its consumers.
It is also fomented by the fact that an engaged consumer, sharing to his friends or his
community, reinforces his “social identity” and therefore both the vision he has of himself in
a social group as much as his place in it itself (Oliver, 1999). For instance, let’s take Nikkie’s
example again. She became a great fan of a particular product (powder highlighter) from
Artist Couture. She advertised it as always on her Snapchat, Youtube and Instagram
channels. A few days later, she communicated to her fan base that the brand contacted her
to grant her and her fans a special discount of 10% when using the code “NIKKIE”. The day
after that, she “snapchatted” Artist Couture’s website to show that her fan base made the
product sold out in less than 24h. Increasing brand awareness and using that knowledge, later
on, to grant advantages to your customers pays off financially. Indeed, it relates to the fact
that “current customers build experience-based relationships with the brand by way of the
unique experiences they have with the offerings and activities of the organization” (Vivek et
al. 2012). In addition, such relationships lead to broader engagement in a sense that it leads
to “lower prices” (here, the 10% discount) and to “higher satisfaction” (here, customers
getting easier access to their idol’s product) according to Van Doorn et al. (2010).
This virtuous circle is also observed in terms of data; the more customers you get to
interact with your brand, the more free data you get: this is “crucial knowledge” for the
brands (Van Doorn et al. 2010). Indeed, engaged customers tend to exchange more about the
products from the brand, and tell what they like, dislike and compare it to other brands on
similar products segments – and even more in luxury make-up as the offers grows broader
every day. This results in a “win-win” situation:
- Companies that have the resources to analyze and compile this type of information
are saving money because these reviews are available online for free: they can directly
connect with their consumers and even sometimes see their reaction live when they
open a product. Also, they can listen and see what the most recurrent pros and cons
are and therefore improve their goods and / or create new ones by identifying new
needs and trends within their customer-base. Doing it properly also helps the
company on a competition-related level in a sense that the most pro-active and
innovative company, the one which will be quicker to react or to predict customers
wants and needs, will be the one winning over the marketplace. This remains a top-

priority matter for luxury brands as they are always perceived as being the most
innovative and creative ones.
- Customers also get their way because they now know that brands are truly and fully
listening to them to provide them with better products that would fit best their
current needs, or fulfill future needs they did not even identify. Yet, this matches the
idea of luxury they have: it is not only about getting a great product but it is about
getting the right product for them thanks to a great analysis of their future needs and
adaptation to the current trends.
II. ONLINE ENGAGEMENT: FROM THEORY TO FIELD APPLICATIONS
WHAT ARE THE MEANS AVAILABLE TO FIRMS?
1. Company’s website
Today, online shopping is getting every day more democratized. Indeed, according to
HarvestRetailMarketing.com there are 45% of shoppers that prefer online shopping versus
55% that prefers brick-and-mortar. Yet, almost two-thirds (64%) of all the consumers
surveyed in this search conducted by Forrester Research are using the internet as a tool to
make their decision before either buying online or offline. This numbers even goes up to 71%
if we only look at women buyers. This finds it source in the fact that today the current product
offering is getting every day bigger and the distributions paths are impacted by that as they
also diversify significantly. In luxury, which has shown to be a sector less interested in the
online shopping due to the fact that it does not provide the same level of qualitative
experience than an in-store visit, it is essential to start thinking of growing on the online side
of the business. It drives more sales and, the way that the online world has evolved, offers
now more possibilities for memorable experiences.
Current marketers realized the necessity of having a website with lots of products
information from very classic one such as size, weight or colors but also more lifestyle
information such as get-the-looks, tutorials and reviews. If we focus on online purchasing,
many scholars have agreed that, as “online transactions are not conducted face to face,
consumers need reliable and useful information to better understand products and
subsequently support their purchasing decisions” (Hsu et al. 2013). This quite new
information path is now profoundly impacted by the fact that brands are selling through

various channels, which results in a five times raise versus e-commerce in 2015
(HarvestRetailMarketing.com, 2014). In the luxury industry, where brands are putting great
efforts in getting top-materials for amazing manufacture, not being able to transit these
features to a consumer by not providing him with the right information would lead to a huge
business loss as well as negatively impact brand image and perception to the consumers and
prospects.
As an attractive window shop is necessary to catch the eye of a passing consumer,
having a complete, well designed website offering both products information and trust
generating elements has become capital. Indeed, it has been reported that in 2014, the
consumers “who reached online before buying spent 33% more on average”
(HarvestRetailMarketing.com, 2014) which subsequently implies that this can boost
companies’ turnover.
Yet, in lots of papers, it has been highlighted that the primary factor for a consumer
to accept buying online is the trust that they confer to the brand (Hsu et al. 2013; Salo &
Karjaluoto 2007). The problem is that, online, a brand is not perceived trustworthy if she is
the one explaining the benefits of her products’ to its consumers (Uzunoğlu & Misci Kip 2014).
Therefore there are today more and more brand websites that opt for integrated UGC (User
Generated Content) and review systems to boost the confidence consumers grant them.
2. Social Media and Blogs
Social media are today a absolutely necessary stop for all the brands. Indeed, social
networks such as Facebook, Twitter, Instagram and more recently Snapchat are considered
the best point of contact from a brand to its consumers for a real-time discussion.
Indeed, “social media encompasses a broad range of online venues that facilitate
interaction, collaboration and the sharing of content among users; within retail
environments, it accelerates the accessibility of brand content to consumers” (Kim &
Johnson, 2016). What is interesting about what Kim and Johnson describe is the notion of the
user creating and sharing content between themselves, or what is called User Generated
Content (UGC). UGC has been defined by Kapan and Haelein in 2010 as “the published
content that iscreated outside of professionalroutinesand practices”. UGC can be generated
individually or in group and “can be seen as the sum of all ways in which people make use of
social media” (Smith et al. 2012). Social media is the key to this content, considered as the

“Holy Grail” for brands, as it generates E-WOM (word-of-mouth) which has been proved to
be one of the best things to convert your consumers into buyers.
Through social medias channel and the consumer generated content it produces,
brands are gaining the trust of their consumers (Hsu et al. 2013) which later on eases the path
towards purchase and brand engagement (Kim & Johnson 2016).
First, social media platforms are considered a “highly credible source among all
sources in different media” (Hsu et al. 2013). This comes from the fact that through social
media and consumer blogs, consumers are finally having free discussions among themselves
to relate their experiences to a product or another without any filter. They post about what
they like and dislike, grade the products and their interaction with brands freely which
become helpful for the next consumer as to know if the product actually fit his current needs,
is worth his money and if he will end up pleased or not, without taking the risk himself.
Regarding the cosmetics industry, we feel that this is a highly important point of contact just
by overlooking brand’s websites: they are all filled with UGC now. For example, l’Oréal – here
mentioning the group, not the brand- seems to have a partnership with Olapic, a platform
importing UGC taken out from social media onto company’s website. Yves Saint-Laurent,
Kiehl’s, Lancôme and many other brands from the group Luxury division (and targeting very
different consumer segments) have now either a UGC-dedicated part of their website to feed
consumer trust to shift it into buying decision or editorial content produced by influencers to
support the brand image and products. This kind of assets are also pushing consumers into
conversing with brands, opening up to them as they now have the feeling that they are heard
(Smith et al. 2012).
The path from UGC towards purchase and engagement has been theorized by Kim
and Johnson earlier this year, using the S-O-R model from Mehrabian and Russel (1974);
adapting it to the online consumer-to-brand relationship and showing how it goes from a
UGC to both purchase and engagement.

Figure 4. The S-O-R Model of Hypothesized Online Consumer to Brand Relationship
(Kim and Johnson 2016)
WHAT IS AN ONLINE COMMUNITY?
1.
One of the first scholars that has ever tried to define online communities was Howard
Rheingold in 1993. Even though the internet as we know it today was in its early stages at this
time, his definition and way of perceiving online interactions are still shockingly highly up-to-
date. To him, an online community is “ a social aggregation that emerges from the Net when
enough people carry on […] the public discussion long enough with sufficient human feeling
to form webs of personal relationships in cyberspace”. Going further, he adds up that, online,
people are engaging the same way they do offline but without their body i.e. they can
“engage in intellectual discourse, conduct commerce, exchange knowledge, share emotional
support,make plans,brainstorm,gossip,etc.” but theycouldn’t kissor punchsomeone ifthey
would like to.
More recently and going further, the work of Scott and Johnson in 2005 complete the
definition by adding the fact that being part of a community is personally rewarding. Indeed,

these communities are organized by “affiliative groups” which are sharing a specific
knowledge and expertise of a particular consumer activity (Kozinets, 1999).
Referring more precisely to brand communities, it becomes an attractive leverage as
it is a group constituted of “admirers of a brand”, which enthusiastically share their thoughts
and experiences with ease and interact in a centralized place (Muniz & O’Guinn, 2001).
To sum up, online brand communities, as a community ”formed in a cyberspace on
the basis of attachment to commercial brands” (Sung et al. 2010) represent a new tool that
facilitates the dialog between a brand and their consumers but also among customers. It
creates a trustworthy space in which all the experiences and reviews are centralized which
deeply improvesboth communication and unity.Thefact that these occuronline playsa huge
role too in the sense that geography no more is a weakening factor. Today’s brand
communities interact most of the time in English and people are more and more able to use
English to participate in it which eases a lot both data and user-generated content creation
but also the access to trustworthy information driving to more sales.
2.
According to the work of Chan et al. in 2014, which tested members of online brand
communities to find out which factors push the customer to engage online “hence fostering
brand loyalty.” Their research hypothesis led them to analyze three items that are interesting
for brands to leverage in online communities: “the community system support, the
community value, the freedom of expression and the rewards and recognition”. Indeed their
initial statement came from Brodie et al. 2013 work implying that “consumer loyalty,
satisfaction, empowerment, connection, emotional bonding, trust and commitment” were
more efficient on engaged customers.
The support system of an online community is important because it constitutes its
spinal cord: if the system is not sufficient, then the brands fails in helping the community
exchanging in the best conditions possible. Today, this issue is not addressed by brands
because social medias have become the current host to brand online communities. Yet, it is
evident that if the platform hosting the discussion is not powerful and complete enough, no
discussions will happen hence lowering customer engagement rates. The community value
recalls the feeling of belonging observed and analyzed in the work of Muniz and O’Guinn in
2001. Indeed, the “perceived community value is positively related to customer engagement

on social networking sites” (Chan et al., 2014) meaning that the higher the perceived value of
an online community, the higher the member is proud of belonging to it and is willing to
participate actively. Therefore companies should have a close and careful look at the wants
and needs of their community to answer them the best, quickest and efficient way. For
instance, they could “set up a service team” (Chan et al. 2014) and/or push other members to
answer questions in order to provide a better service. Today, this issue is addressed on social
mediaby the recent creation of the communitymanagement, which is more and more taught
in business and communication schools.
Ensuring freedom of expression in brand communities is vital. Indeed, members and
consumers refer to the community in order to get honest, real and trustworthy testimonies
from other consumers hence implying that discussion should be encouraged, either if it has
a positive or negative outcome for the brand. If the brand filters the content “manager should
be aware that this practice could even worsen the situation” (Chan et al. 2014). Moreover,
brands can take advantage of the bad comments they receive by acknowledging them and
adding them to their research and development process to solve product issues, or adding
them to their consumer reward program or employee training, for example, to improve their
service. Both of the actions lead to greater customer engagement and retention.
This brings us to our last leveraging point, “offering rewards and recognition”. Brands
have to think of programs rewarding their top customer for they fidelity to the brand. These
gratifications can either be monetary or psychological (Kim et al. 2008). For example, a
financial reward could be, as Sephora does, that you get ten percent off every fourth time you
buy something at Sephora or on Sephora.com (Sephora website). A psychological reward,
for instance, could be displaying the consumer’s picture in the top UGC of the week on the
front page of the company’s site. This is of high relevance for luxury brands, and even more
in the highly competitive beauty industry as attracting and retaining a customer on such
consumables products as make-up or skin care can be complicated as the offer is huge.
Maintaining a luxurious fidelity program with incentives, gifts and rewards is a top-priority
for customer relationship managers as they know it is the key to having repetitive and loyal
buyers that will not go spend their money to another brand.
Chan et al. developed their hypothesis around the feeling of reciprocity customers
feels when brands reward and recognize them for their engagement: they want to interact
even more, and they are positive because they feel heard and cared about. Therefore, it is

necessary for a brand to leverage engagement through rewards and recognition because it
fosters brand loyalty and positive reviewing from engaged customers.
EMANCIPATING FROM BRAND COMMUNITIES: INFLUENCERS
1.
Influencing people have always been present in our society. Back a few decades ago,
they were referred as “opinion leader”. In 1955, Katz and Lazarsfeld defined them as “ the
individuals who were likely to influence other persons in their immediate environment”. In
1957, Katz identified the main characteristics of these leaders: they “personify certain values;
competence; and strategic social locations” (meaning the scope of the network they can
reach). Indeed, these leaders are highly specialized and skilled in a particular domain and
advise other, behaving as referrals for them (Weimann, 1994; McQuail & Windhal, 1993).
Nowadays, with the rise of online human interactions on social networks, the
previously privileged “face-to-face” encounter has shifted towards unphysical meetings,
defining attribute of online communities, with no geographical boundaries whatsoever yet
almost intimately binding its participants (Uzunoğlu & Misci, 2014). Characterizing even
further this shift, the word “opinion leader” has been highly replaced by the word
“influencer”, which online existence is “increasingly acknowledged” (Uzunoğlu & Misci,
2014).
Influencers have been defined as “socially savvy experts” in their field and can reach
“difficult demographics”. Their network is composed of individuals that trust them but also
end up admiring them for their knowledge, expertise, and the bond they create with them
(Digiday, 2016). They have to be always aware of all innovations and trends in their chosen
topic and to keep on sharing their view on it to their followers, making of them highly
connected media consumers (Tomaszeski, 2006). On the other hand, their affect for media
and communications, which is essential to their survival as influencers, is also a great way for
them to be at the top of the latest technologies regarding communications and data sharing
(Rogers, 2003).
They act as prescribers for their community (Hatchuel, 2003): they have the ability to
advise people who doubt their own knowledge to make a purchase or not because they have
the required skills to take the best decision for them. Their “self-perceived knowledge”

(Lyons & Henderson 2005) is the reason why they begin sharing their point of view, being an
advocate for some brands or not.
One of their top characteristics is also that they are perceived as “regular people”
talking about what they like or dislike: influencers are usually not paid for advertisement, and
if they are, they would only do it for things they genuinely believe in. Doing so, they manage
to win the trust of their followers that would nod in agreement almost 100% of the time. This
trust builds up with eWOM and repetitive discussion between the influencer and its
community (Hsu et al. 2013).
Their perceived knowledge and their trustworthiness make them a credible source to
listen to hence making them “more persuasive in influencing consumers’ purchasing
behavior” (Hsu et al. 2013).
2.
The valuable strength of influencers in the online environment is that their speech is
heard and resonate with most of the people that follow them. Everything they share is a new
kind of “ e-Word-Of-Mouth” or “eWOM” perceived as a “highly credible source amongst all
sources in different medias” (Hsu et al. 2014). Therefore, it is with great interest that brands
are looking at influencers to increase awareness and willingness, among their consumers, to
make a purchase decision (Gardner, 2005). Brands use influencers as a mean to create
discussion about their products. They know that if they produce an ad or campaign saying
their product is great, it will come out as a sheer marketing claim. Yet, if the influencer says
the same, it will resonate with the consumer as a valuable and credible source pushing him
towards trying and hence, purchasing the product to see by themselves (Uzunoğlu & Misci,
2014).
To characterize this reach, we can increasingly see the appearance of special
collections resulting from collaborations between bloggers and brands. According to Ambika
Zutshi, the CEO of FashionBi, a data insights provider in Fashion and Luxury, “the potential
issuchthat even the bigname celebritiesare puttingtheir name on thebeautylinesand being
fully involved in all the development, manufacturing and packaging processes to ensure they
deliver high quality at the most affordable prices. Many makeup brands, such as Benefit
Cosmetics, Too Faced and Makeup Forever, are already using vloggers' power to involve

them in their social campaigns and gaining immensely out of it.” (Interview for
LuxuryDaily.com, 2016).
For example, Jaclyn Hill, a very famous beauty blogger as produced her own collection
in partnership with the brand Becca. The first collection they have launched has ran out-of-
stock in a few hours. It happened over a year ago, in July 2015. Their first successful launch
left fans panting for more and they have now launched a second collection in May 2016. In
the meanwhile, Jaclyn who used to have about 2 million followers on YouTube has now over
3,4 million followers. In comparison, Becca Cosmetics YouTube channel has a bit more than
5 000 followers. This shows how such a partnership could help a slow moving, small brand to
be now world-widely renowned thanks to a blogger. On the other hand, there are also highly
famous influencers that come up with their own brand and meet with huge success making
them deal with bigger brands.
The most famous example here would be the make-up brand from Kylie Jenner. She
is, according to Statista in 2016, the 7th most followed person on Instagram with over 65
million followers, and she is the only one out of them to run a business in her name, Kylie
Cosmetics. Coming up with this brand thanks to her passion for make-up, Kylie, the youngest
sister of the Kardashian clan was at the very beginning just known for her family. She has
always been renowned as a fashion and trendsetter and beauty influencer and used this as a
great starting point for her company. KylieCosmetics as now over 7 million followers on
Instagram and more than 600 000 posts using a hashtag related to the brand. In comparison,
Lancôme official Instagram page has a 1million followers and almost 1 million of posts using
hashtags related to the brand. In addition, you can also think these numbers in a broader
scope as Kylie, for instance, posts a lot about her brand on her personal account with over 65
million followers and that her only cumulates over 5,5 million post using her name as a
hashtag. This again highlights how influencers are close to becoming brands themselves and
to surpass their reach way quicker.
Accordingtoastudyfrom Experticity in 2016,more than “twothird of thetouchpoints
in the buying cycle now involve customer-driven information like online reviews and word-
of-mouth recommendations”. They also highlight that consumers are now increasingly
turning their back on brand-issued messages by linking it to the fact that “publishers lost $22
billion in 2015 due to ad blockers”. This implies that consumers do not want to see
communications from brands as they are today more marketing-sensitive. They prefer

blocking these by using softwares such as AdBlock not to see this kind of advertisement while
online navigating. On the other hand, according to PwC Total Retail Survey from 2016, more
than “78% of purchases were influenced in some way by social media in 2015” which shows
how much consumers are now looking at brands’ communications differently.
The question here is: within this 78 %, what is the part that is led by influencers or user-
generated-content? Today, brands have to turn to a different kind of communication to be
heard and listened to again.
III. USER EMPOWERMENT AND PRESCRIPTION PURCHASE
USER-GENERATED CONTENT FLOODS ONLINE COMMUNITIES
User-generated-content or UGC is one of the ways “interactions happen on social
media” (Kim& Johnson, 2016).It representsanewkind of content generated bypublic people
like you and me that can include brand-related content, and that helps “driving product
awareness and influencing consumers’ purchase decisions (Kim & Johnson, 2016; Blakley,
2013). UGC is now considered atype of eWOM as it can spread through social media the same
way. Often, it is done thanks to the use of a particular hashtag.
User Generated Content regroups all types of media such as video, photo, or reviews
posted on social media (AdNews.com, 2015). According to IAB US it as the power to “drive
engagement and conversation”. It opposes itself to BGC or Brand-Generated-Content in the
sense that: why would a consumer listen to a brand when he can listen and hear a peer in
which he can place his trust as it is someone that is exactly like him, not a brand trying to sell
him a product? (Zhang & Sarvary, 2014).
Taking the luxury beauty industry as an example, we can, for instance, see hashtags
from brands, type of products, or product name directly be used repetitively by beauty
influencers to help their followers find more information about what they want. Indeed it is
now very common to see consumers use the hashtag of a product in a view to see how it looks
like in real life.It iseven more preeminent in thebeauty industryasalipstick can look different
on a pale and dark skin. Therefore you will see more and more UGC post showing how the
products look on each girl with a small review (Curalate, 2015).

On the other hand, consumers who create UGC try to link it as much as possible by
using hashtags or directly identifying (or “tagging”) the brand to be seen and recognized
within the community. Indeed, the feeling of belonging to the community and of “social
identity” is prevailing here for the ones that post (Oliver, 1999). It is, even more, the case
today has brand feature UGC on their website and the post that randomly uses a particular
hashtag, for example, can be featured on these website homepages (Curalate, 2015). What a
nice way to brag around when you are a girl that just posted a picture of her a new lipstick!
Yet, this new trend is not very common. According to L2, only 6% of U.K. beauty brands (i.e.
the beauty brands you can purchase in the U.K.) have this feature compared to 17% in the
U.S.
UGC ends up empowering the consumer. Today, he has at least a hundred different
ways to express himself online and to tell what he really thinks of brands, either positive or
negative. This is characterized by both “authority delegation and decentralization of
decision-making power” (Mendes-Filho & Tan, 2009):
 On the one hand: the consumer that reads a review, or sees UGC is now
influenced by someone in his decision-making process of whether to buy a
product or not
 On the other hand, the one posting UGC knows that his opinion may be read
and make him gain authority over the one that reads it.
This problematic is the basis of the theory of prescription purchase that we will address later.
The rise of UGC, thanks to social media, has given power to the consumers versus the
brands. If they post negatively, they can now be directly addressed by the brand so that the
brand can directly address them and their problem. On the other hand, this helps brand being
proactive in spotting issues in their products so that they can fix them sooner than later (Kim
& Johnson, 2016; Park & Choi, 2013).
PRESCRIPTION PURCHASE
1.
Prescription purchase can be defined as “an advice given by a prescriber to a buyer,
and whose intensity varies with the problem encountered at the purchase decision”. (Lamour
et al., 2013). The prescriber can be identified as a knowledgeable, trustworthy person who

prescribes a brand or a product to a buyer to help him make his decision. During the decision
process, the buyer is either lost or not able to choose on his own the brand or product he
wants. Therefore, he turns to the prescriber that will decide instead of him, entirely or
partially. Of course, the buyer is free to follow or not the prescription (Lamour, 2013).
More precisely, prescription is the fact that a person has the power to either
recommend, order or prescribe a purchase to another one (Hatchuel, 2003). Of course, these
three actions show a different level of authority. This authority does not apply, in the concept
developed by Armand Hatchuel, the prescription purchase is a proposal of a probable action.
We can, therefore, compare this prescription to advising for instance.
Going further, what is interesting to note here to complete the objectives of this study
is that, to Hatchuel, when prescription purchase happens, the one that hesitates to buy will
“disqualify himself as an actor of his own choice”. resorting to the prescriber shows a very
high level of social influence, but also a responsibility surrender from the buyer (Hatchuel,
1995). Moreover, this induces that the purchaser knows he does not have the sufficient
knowledge to assume a decision and completely relies on the opinion of a prescriber to make
it for him. This phenomenon shows a high level of trust from the prescribe to the prescriber,
and as studied previously, this confidence is an important characteristic in the purchasing
decision.
2.
After having defined what is a prescription purchase we can now observe first its
apparent similarity to influencers and therefore, its online implications. Indeed, it is highly
relevant in today’s connected context to wonder about the real impact of influencer on
purchase decisions. It is interesting both on a human level (i.e. are we influenced a lot by what
we see every day on social media) but also on a company standpoint i.e. how can this drive
more sales and increase the online turnover.
According to a study from FashionBi published in 2015, “beauty bloggers are ruling
the world” as they “have managed to gain celebrity status worldwide, with a loyal fan base
that can count up till 30 million” for some of them. Also considering them as “experts” it
shows the example of Zoella, a highly renowned British beauty influencer adding up to 32,8
million followers across all the social media she is. She did an experience on her account: she

promoted a blush from TopShop. This move generated a raise of more than 40% of the click
–through- rate (ratio of the numbers of clicks vs. the numbers of views) to the website.
Today bloggers are influencers that follow the same path as prescribers in the
purchase decision-making process. And we see them turning not only to the best paycheck
but more importantly to the brand they trust the most so they can make its panegyric to their
followers. Unfortunately, as the phenomenon studied here is recent, we are facing a lack of
academic research to prove the point. Yet, many institutes are analyzing this movement as
they see a net rise of the influence of these bloggers in the purchase decision. As part of my
internship at Coty, I have mainly access to numbers showing this phenomenon within the
luxury beauty industry and to conclude this chapter I will focus on using these sources to
prove the point.
For instance, Helen Southgate Director of Affilinet, a UK-based agency pioneering in
affiliation marketing declared that “the fact consumers look to bloggers to provide them with
information about areas of specific interest, goes right to the heart of the evolution of digital
marketing. The question for bloggers is now how they go about building on this trust,
maintain editorial integrity, and at the same time, monetize their site” (Bizreport, 2016).
Regarding numbers, “beauty brands control only 3% of YouTube’s 14,9 billion beauty-
related video views” whereas “Vloggers, haul girls, and other beauty content creators control
97% of conversations around beauty and brands on Youtube” (Pixability, 2014). These very
unequivocal numbers encompass the reality of the market. If influencers are more likely to
have control over the purchase decision of a buyer rather than brands, plus if they own almost
all the online conversations and visibility by attracting most of the traffic, this implies that
their power can shape both the content of the conversations (positive or negative) but most
importantly its ending i.e. purchasing or not. Indeed, according to the 2012 study from
Pixability, “the top 25 beauty vlogers get 26 times more comments than brand channels” and
if we match this fact with the one saying that a prescriber is almost the one taking the
purchase decision instead of the buyer himself, therefore we can picture how powerful and
influential these are in today’s online beauty world.
RISE OF MICRO-INFLUENCERS
As evident as the power of influencers on purchase decision-making may seem, it is
also important to note that we are nowadays seeing a new movement coming up within the

rise of micro-influencers that can be defined as “ figures with niche followings on social
media. These are people with a few followers grouped around a particular topic, interest or
location. Their audiences are smaller but more likely to be keenly interested in a campaign
that targets their interests” (Digiday, 2016).
Indeed, according to a study led by Markerly on Instagram, and as we can observe
from the chart below (figure 5), the average audience engagement is of 8% for less than a
thousand followers account versus 2,4% of engagement rate for 10 000 to 100 000 followers
account.
Figure 5. Engagement by audience on Instagram – Markerly.com
This finds explanations in the fact that the million people following person A may
follow this person for only one aspect of the content the person A posts. On the other hand,
if person B posts only about a very precise thing, it may have only a few followers yet we can
be sure that his followers are here only for this kind of content as it is such a niche that they
would not be here if not interested (Digiday, 2016).
This is great news for brands, because, in parallel to that phenomenon, the
influencer’s world has seen a real exponential raise finance-wise. According to Digiday, top
influencers, irrespective of the sector, can ask up to half a million dollars for a branded video
and the influencer market is now expected to reach $5 to $10 billion within the next five years
(MediaKix, 2015).
Therefore, all things added up; we realize that today’s connected and engaged
customer can reveal to be a great influencer on his own. He can now freely talk about what
he likes and engage, to a smaller extent of reach, way better than some top-influencers can.
These smaller influencers are still able to be contacted by brands thus implying that they
could still be used by brands as spokespersons for a product. Yet, these smaller influencers
keep on with the classic characteristic of an influencer i.e. trust and credibility. Therefore,

they maintain somehow hard to grasp but nevertheless represent a great pool of
engagement generators for brands.
IV. SUMMARY OF THE LITERATURE REVIEW AND HYPOTHESES
FORMULATION
SUMMARY OF THE LITERATURE REVIEW
The literaturereview aimed at analyzingthe academic literature dealingwith the main
topics of our research. Indeed, in a first time, we examined what engagement was and how
this concept evolved through the past half of century towards what it is now with the new
technology means available to us. Online engagement is today a priority for luxury brands as
it encompasses new problematics that are of top priority to solve in order to reach both
prospects and customers properly in a view to turning them loyal and therefore, better
purchasers of the brand. It is also becoming a key feature in order to maintain great brand
equity and visibility. In a second part, we observed how online engagement is created on the
field i.e. on social media. We realized that, even though brands have lots of different means
and tools at their disposal, they are now facing a new problem: the rise of influencers. Indeed,
influencers have proven themselves to lead to be greater engagement generators, hence
creating both a threat and a great opportunity for brands to use for their own customer-base.
Most importantly, they drive traffic towards brands they believe in. For many brands, it can
be an issue as the market is seeing every day more new comers, either in an influencers
creating his own brand or in a new brand being able to connect to beauty addicts in a greater
way than they do, leaving them with less loyal customers. Yet, in a third part, we saw that
even though influencers are of a greater reach than brands, today’s customers want to have
their say in the online engagement and start posting more and more content on their own,
which ends up in influencing other customers into buying or not. For luxury brands that used
to control their communication and image tightly, this can become an issue if they are not in-
control of the content linked to them anymore. We also see the appearance of smaller
influencers that have shown themselves to be high engagement level generators, thus
implying that engagement is today at the same time induced by brands but more strongly
led by customers, all becoming influencers to one another.

HYPOTHESES FORMULATION
This thesis aimed at showing:
In which way online communities generate engagement and what does it imply on
purchasing decisions of customers?
To answer this question, here are three hypotheses that we would like to answer while
researching in order to solve our problem statement:
 H1: Users engage more effectively with influencers than with brands
 H2: Users engage more efficiently and are greatly engaging others by creating user-
generated-content
 H3: Influencers are more likely than brands to lead to purchasing decision and
therefore are better prescribers than brands

METHODOLOGY AND PERSONAL RESEARCH
This part of the thesis will explain the methodology and approach used in this research
paper as well as address the issues of the study.
I. METHOD CHOSEN: NETNOGRAPHY
WHAT IS NETNOGRAPHY?
The netnography is the application of ethnography to the online environment. As Nada
Sayarh defined it in 2010, it is the “predilection method for analyzing virtual communities”.
This method used to be only about consumer behavior yet with time it has acquired a larger
scope and is now used in general social sciences. Originally developed by Kozinets in 1997,
this method is the mix of “network” and “ethnography” and follows the same steps of
ethnography adapted to online communities (Kozinets, 2009).
As Internet was the ever-growing new power balancing business, the need for a
methodology helping to understand behaviors online was even more striking. In its early
beginning, the netnography has been used in consumer sciences to describe phenomena
linked to “virtual communications of consumer communities” (Kozinets, 2002).
Yet, using the word “virtual” (Rheingold, 1993; Kozinets, 2002) to define these
communities is misleading. Indeed, ““these social groups have a ‘real’ existence for their
participants, and thus have consequential effects on many aspects of behavior, including
consumer behavior” (Kozinets, 2009; Muniz & O’Guinn, 2002).
Going further, Kozinets explains that netnography is “a natural method of investigation,
which uses publicly available information to identify and understand the needs and decisions
of a social group.” Indeed, conducting netnographies is of high interest in the sense you can
observe and analyze people’s behavior about a particular subject without ever interfering
with their communication (Sayarh, 2010). It is a “natural investigation method” (Lincoln &
Guba, 1985) as you immerse yourself completely in the interactions of group members
therefore leading to a greater understanding of the community but also to remain at the core
of the research field without creating any waves in it (Sayarh, 2010).

THE FOUR STEPS OF NETNOGRAPHY
Netnography, as defined by Kozinets in 2002, contains four stages. The first step is the
“entrée” in which the researcher describes itsresearch objectives and hypotheses, choose the
most relevant group to observe (factors to take into account here are regularity of posting,
the richness of data, the variety of members, etc.). The second step is “the data collection”.
Netnography has to take into account both textual and not textual data to be efficient (not
textual data is all the further information linked to the message). In the data collection should
also sit the researcher’s note while field-analyzing. Finally, if the researcher also interacts in
the community, all the participations should be consigned too. The data collection in
netnography is mostly qualitative (Sayarh, 2010) yet there could also be quantitative data if
the group structure and system allows it. The third step of netnography conduction is the
analysis of data and its interpretation. This part allows the researcher to go back and forth
from the theory to field while grouping all relevant communications i.e. its credibility and its
“transferability” (Lincoln & Guba, 1985). The last step is the “research ethics” (Kozinets, 2002)
in the case the researcher wants to contact members of the community tovalidate the results
he got while collecting and analyzing the data. This “feedback” is important as it allows the
members to balance the researcher’s findings and to nurture additional data. Yet, this is not
always feasible, even more if the researcher does not want to contact the community (if the
topic is sensitive or if the community observed is too large).
II. NETNOGRAPHY APPLICATION
ENTRÉE
To correctly pick the online community to study, I have relied on my two previous
internships at l’Oréal Luxury division and Coty but also on my knowledge and passion for
luxury, online and digital marketing and for the always more amazing Beauty industry.
Currently, the very famous blogger Nikkie from @NikkieTutorials is launching her
limited edition collection “The Power of Make-Up” in collaboration with the brand Too Faced.
Nikkie is a Dutch blogger that have quickly arisen to be an influencer thanks to her
very famous video named “The Power of Make-up”. This video have taken her to a “star” level
in the beauty online community as she has been able to connect with the viewers on an
emotional level. She delivered a very positive message thourgh this video by stating that no

matter what you put on your face and how powerful make up can be at changing the way you
look, you are still yourself and you are beautiful so you always have to love yourself no matter
what other say about you.
Too Faced is a brand that was created in the 90’s by Jerrod Blandino and Jeremy
Johnson, two man with luxury and beauty background. They aimed at creating “ a serious
brand who knows how to have fun” that uses “the finest, cutting-edge ingredient to create
innovative creulty-free color color cosmetics” (Too Faced website). With a best-seller
mascara at $23 and famous scented eye-shadow palette at about $50, Too Faced is
categorized as an affordable yet luxurious brand thanks to amazing marketing strategy,
luxurious and precise brand code and highly recognizable merchandising and packaging.
Nevertheless, the brand stands for femininity and playfulness while delivering its customers
with top of the range quality products. The brand as now grown to be a leader in the luxury
beauty industry, surpassing brands like Chanel, Dior or Laura Mercier in digital ratings (L2.inc,
2015).
For this research, in order to have both a brand and an influencer point of view I have
decided to analyze the interactions of the followers from both pages on Instagram, the most
reactive social media for this type of content.
The kind of post we will be looking at are (see below for examples):
 Launch posts: posts from both Too Faced and Nikkie announcing the palette
collaboration
 Product pack shots: pictures of the collection
 Tutorial videos: how to use the products and get the look videos.
 UGC: using the #nikkie4toofaced as a tracker for what the community posts about
the collection launch
Figure 6. Sample Screenshot of typical posts to observe
on @NikkieTutorials and @TooFaced on Instagram
pos
t
po
st

Being myself part of this community, for my internships but also as a make-up addict
and luxury consumer, has enabled me to capture and observe on the long run its habits and
codes. The Too Faced page seems to be animated by a whole digital and social community
management team in the U.S, from my research on the professional social network LinkedIn
I have found up to ten members of what could be a digital and social media management
team. On the other side, Nikkie manages herself all her social networks (that includes: a
Facebook Page, an Instagram and Twitter account, a Snapchat account, a YouTube channel
and a blog) because she loves doing it, according to the many posts I have read from her but
also from what she says in her videos. She has, over the time, been able to develop a great
relationship with her followers by always putting them first, including them in her decision
process and fun doing what she does. She also always love to show on her Snapchat account
how they react to her videos. Overall, she appears as very positive and open to her followers.
I have myself already talked with her on Twitter and have enjoyed her quickly and very nicely
replying to me.
Too Faced Instagram page has over 6,5 million followers, and Nikkie’s has now over 5
million followers. The average number of like and comments by post (calculated over the last
50 posts for each page, which represent approximately a month of posting for Nikkie and two
weeks for Too Faced) is for Too Faced: an average of 85 432 likes and 687 comments per post
and for Nikkietutorials: an average of 174 844 likes and 1761 comments per post (see Tables
2 and 3) which shows how participative and engaging both these pages are. Also, as these
numbers remain “close” Instagram community-wise, it makes the study more relevant
because we deal with close in size communities.
DATA COLLECTION
The first step of the data collection aimed at collecting all the essential data of the two
chosen Instagram pages. It included: number of followers, total likes, and comments count,
average number likes and comments, but also on the posts that directly aimed at the
collection “The Power of Make-Up” itself (see Annex 1).
Then, I analyzed the content of these posts: what are the type of content they are
providing the followers with (informational, inspirational) and what hashtags they commonly
use (#nikkie4toofaced is the main one referring to the collection) to see linked posts from
followers and fans (user-generated-content).

MSc Thesis - Global Luxury Management 20152016- Sophie Djordjevic

MSc Thesis - Global Luxury Management 20152016- Sophie Djordjevic

Recommended

Recommended

More Related Content

Viewers also liked

Viewers also liked (6)

Similar to MSc Thesis - Global Luxury Management 20152016- Sophie Djordjevic

Similar to MSc Thesis - Global Luxury Management 20152016- Sophie Djordjevic (20)

MSc Thesis - Global Luxury Management 20152016- Sophie Djordjevic