Should a Luxury Brand’s Chatbot Use Emoticons? An Abstract

Abstract

Luxury online sales continue to grow despite the pandemic setback. Luxury brands have increasingly relied on chatbots, an AI-powered computer program to serve as a 24/7 virtual agent for online communications with customers. Even though chatbots have many benefits such as enhancing productivity and giving customers instant feedback, communication with chatbots can be viewed as impersonal and robotic. This drawback is a concern as customers expect a more personalized experience from luxury brands. Previous research has examined ways to humanize chatbots. But little is known about whether a luxury brand chatbot should use emoticons to resemble human interactions in luxury brand communication. This research seeks to address this question. Across three studies using different luxury products and services, we found consistent evidence that using emoticons in a luxury brand’s chatbot communications can lower the luxury brand’s status perception. In addition, the research has uncovered the underlying process by showing such negative effect was due to the lowered perceived appropriateness. We also found such effect only existed for the traditional luxury brands but not for masstige brands. Masstige brands are priced well below the traditional luxury brands. They are not associated with scarcity and rarity as they give ordinary people access to luxury. This research contributes to the luxury brand communication literature. It aligns with previous research and suggests what works for other industries may not work for the luxury industry. This research also contributes to the understanding of emoticon usage in the human-chatbot interaction while emoticon’s senders are chatbots. More importantly, our research contains managerial implications. Luxury brand managers need to be cautious with using emoticons in the chatbot communications. It may be good for traditional luxury brands to stay away from using emoticons in chatbot communication.