Revisiting consumer loyalty: luxury brand extension into restaurants and cafés

Abstract

Purpose With luxury brands extending into restaurants and cafés, the definition of luxury consumption no longer refers to tangible products alone but to intangible and authentic experiences as well. Drawing on the Stimulus–Organism–Response framework (SOR) and the costly signalling theory, this study explores the sequential mechanisms of experiences in luxury brands’ restaurants and cafés among Korean and US consumers. Design/methodology/approach This study distributed online surveys in South Korea and the US and recruited 419 participants (South Korea = 210; US = 209). PLS-SEM and multigroup analysis were used to test the hypotheses. Findings Perceived quality influenced perceived luxury values positively and led to consumers’ loyalty to both the parent brand (i.e. luxury fashion brand) and extended brand (i.e. luxury restaurants and cafés). Originality/value Luxury brands seek to offer their consumers authentic and extraordinary experiences. By merging luxury fashion with gastronomy, these brands can foster synergistic long-term relationships with consumers and enhance their brand equity in the global luxury market. Our results also demonstrated that such expansion contributes to competitive advantages in luxury fashion retailing by increasing their intangible values in addition to their parent luxury fashion brands. Further, in the context of globalisation, this research provides insights into how luxury retailers’ novel approach to the F&B sector can enhance consumers’ loyalty across different cultures and strengthen their global luxury retail strategy.

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