6. General discussion
Across the experimental studies, this research highlights the impact of psychological distance of luxury brands triggered by a level of consumer-brand engagement on value perceptions of luxury brands. This research yields both theoretical and practical implications in the following ways.
6.1. Theoretical implications
From a theoretical point of view, this study contributes to a body of literature concerning brand dilution and social media marketing of luxury brands, and to the theory of psychological distance. To date, the brand dilution literature has been dominantly examined from the aspects of brand extension strategies (e.g., Shin et al., 2017). On the other hand, this research demonstrates that brand-consumer engagement of luxury brands on social media can also dilute brand value perceptions. Therefore, this research's view on social media marketing as a source of brand dilution provides important insights and adds a new theoretical perspective to the literature on brand dilution.
Also, while most of literature in social media marketing of luxury brands has documented positive aspects of social media on luxury brands (e.g., Kim & Ko, 2012), the current research contributes to the literature by uncovering negative aspects of social media marketing on luxury brands. Specifically, this study provides empirical evidence that a high level of brand-consumer engagement on social media can damage perceptions of luxury brands by revealing the underlying mechanism. Through a mediation analysis, it was found that this effect is partly due to the decrease of psychological distance of luxury brands.