The focus of this research is to examine the links of social capital that rooted in social network interactions and relationships. This leads to addressing peer communication, which will contribute to the exchange of information about luxury products through online interactions that can lead indirectly to luxury brand consumption. This idea of using Social Capital Theory and linking it to luxury consumption has not been examined in recent research. Moreover, this relationship has been moderated by demographic variables (age, gender, and income) and psychological variables (materialism and susceptibility to normative influence). Previous literature found these variables to be the driving factors behind luxury consumption, but in this research, their impact on the relationship between online social capital and luxury consumption is examined. The conceptual model in this study is tested in a Saudi Arabian context, while all other research was carried out in a Western context. There has not been much research on luxury brand consumption in a Saudi context, and there is even less research on Saudi Arabia. Therefore, this study aims to fill the gap in the literature on luxury brand consumption in terms of social interactions and relationships, including psychological and demographic factors.
This research followed an explorative strategy to explore the impact of social capital on luxury brands consumption in the Kingdom of Saudi Arabia (KSA). This strategy involved surveys with a deductive approach to answer research questions. Quantitative data have been collected through the use of an online questionnaire with 407 Saudi Arabian participants who are luxury brand consumers and who also use social media. AMOS software was used for statistical analysis and to facilitate structural equation modelling (SEM) to test the model and the hypotheses.
The primary research findings are that online social capital has a significant impact on luxury brand consumption. However, this positive relationship is mitigated when a peer communication mediator is applied. As a result, peer communication mediates the relationship between online social capital and luxury consumption. On the other hand, the moderation effects of age, income, and materialism on the relationship between online social capital and luxury consumption were rendered insignificant. However, moderation effects like gender and susceptibility to normative influence were found to have a significant influence on luxury brand consumption.
This research contributes to the theoretical dimensions of purchasing and consumption, as it proves the applicability of using Social Capital Theory in the marketing context especially luxury consumption. Therefore, Social capital can be intangible asset for the luxury brands which can improve their marketing strategies on social network sites.
On a practical level, results show that luxury brand companies operating in Saudi Arabia should consider how to market their products to individuals across all income and age groups to maximise profits. There is also evidence that Saudi Arabian consumers are prone to higher levels of normative influence. This means that luxury brands should consider how to increase their influence with consumers, perhaps by using social media influencers, in order to appeal widely to Saudi consumers
