Exploring young consumer's decision‐making for luxury co-branding combinations

Purpose The purpose of this paper is to identify the realistic trade-offs young consumers make when evaluating luxury co-branding combinations based on signalling theory. Design/methodology/approach Conjoint analysis was employed to evaluate the relative impact of four major attributes (i.e. brand combinations, retail channels, uniqueness and price) on consumer desirability for luxury co-branding combinations. The data were analysed using desirability indices. Findings Brand combinations, uniqueness and price significantly impact consumer desirability of luxury co-branding combinations. The luxury brand and sportswear combination results in the highest desirability when price is more similar to the sportswear constituent and participants perceive that the collaboration as exclusive. Practical implications The results suggest that luxury brands need to consider the partnering brand's retail format primarily for co-branding strategy. Luxury brand collaborations with sportswear and premium priced streetwear brands are more likely to result in higher desirability among consumers compared to collaborations with fast fashion and mass-market brands. Additionally, uniqueness may not be effective as a point of differentiation in cases where luxury brands cannot guarantee a single yearly collaboration. Originality/value The decision to use existing brands for the fictitious combinations developed more sensible scenarios for respondents. In addition, rather than discrete questions, attribute-based combinations provide a more realistic depiction of consumers' decision making on luxury co-branding. Finally, the results provide marketing practitioners with practical directions for future development of fashion luxury co-branding strategy.