How brand loyalty and its marketing activities affect Japanese fashion companies' financial performance

Abstract

PurposeTo investigate (1) the relationship between young adults' behavioural brand loyalty (BBL) and Japanese fashion companies' financial performance (FP) and (2) FP improvement from the perspectives of social media brand engagement (BE) and loyalty programmes (LPs) by applying the complexity theory.Design/methodology/approachA mixed methodology was employed by combining qualitative and quantitative approaches to examine the prediction of outcomes by various variables in a realistic context. The integrated model associated BE and LPs with BBL and FP, which are essential for fashion companies. We selected 14 fashion brands belonging to 14 publicly traded Japanese fashion companies and surveyed 183 Japanese consumers (aged 18–25 years) who chose these brands as their favourites, engaged with the brands and participated in LPs.FindingsThe findings reveal the positive and negative effects of the variables (BE and LP) on the outcomes (short- and long-term FP). They offer marketing implications regarding brand strategy and financial improvement by considering various combinations of causal factors and complex situations, such as the fashion brands' and consumers' characteristics.Originality/valueExisting empirical studies consider consumers' symmetric reactions to the benefits and losses from variables (BE, LP and BBL) but do not realistically reveal the negative and positive effects on outcomes (FP). This study addresses this gap by applying the complexity theory and offers multiple solutions to target different consumer types to predict high FP.