SELLING LUXURY PRODUCTS ONLINE: THE EFFECT OF A QUALITY LABEL ON RISK PERCEPTION, PURCHASE INTENTION AND ATTITUDE TOWARD THE BRAND

Many luxury brands and online retailers are struggling with how to sell luxury products online. Purchasing such premium priced brands online implies a high level of risk for consumers since their evaluation of the products cannot be based on direct, tangible experiences with the product. This study suggests that retailers can diminish the perceived risk by adding a quality label to a luxury product. However, the effectiveness of such quality label depends on the cultural orientation of the consumer. As such, we expect a quality label only to be effective for high uncertainty avoidance consumers. An analysis of secondary data from A.T. Kearney reveals a negative relation between a country's level of uncertainty avoidance (UA) and how favorable its consumer base is for transacting online, which might be an indication that even general online consumer behaviors (not luxury products per se) are perceived as highly risky in high uncertainty avoidance cultures. In addition, an experimental study using a 2 (Quality label vs. no label) by 2 (luxury vs. non-luxury purchase) between-subjects design reveals that for a luxury brand, a quality label reduces the risk perception and in turn leads to higher purchase intention and attitude toward the brand for high UA individuals.