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The luxury industry constantly faces new challenges due to changing market dynamics. The recent global pandemic has been a major setback for luxury brands and makes online sales important. AI powered chatbots, as virtual agents, have allowed luxury brands to interact online with customers (Luo et al. 2019). Though chatbots are adopted by many luxury practitioners, empirical evidence on how luxury brands need to leverage their AI chatbot application remains limited.
As research interest in AI has grown, scholars have explored various ways to make chatbot communication resemble human interactions. One such way is through the use of emoticons, the textual or pictorial icons that are used in digital communications to express emotion (Derks et al. 2008). Most existing research focuses on human-to-human interactions. Little is known about customer reactions toward the chatbot's emoticon usage in the luxury brand context. Therefore, this research aims to examine the efficacy of a chatbot's use of emoticons by luxury brands on the status perception of the brand. We propose chatbot emoticon usage in luxury brand communications leads to a lower luxury status perception because it reduces the appropriateness perception. Such negative effect only exists for aspiration luxury brands but not for mas stige brands.
There are three theoretical accounts we've drawn from the literature to support our propositions. First, the effects of emoticons in brand communication are mixed. Some studies demonstrate that emoticons elicit positive affect, strengthen consumer engagement, and increase purchase intention (Das et al., 2019; Lee and Hsieh, 2019), while others point out that the use of emoticons can backfire. For example, service employees who use emoticons are seen as low in competence but high in warmth (Li et al., 2019).
Secondly, practices deemed appropriate for the mainstream may not apply to luxury brands (Moreau et al. 2020;...