Extant research highlights novel opportunities in co-opting customers to co-create value through their participation in the brand experience. However, relatively little is known about how customer participation (CP) affects value creation and brand relationship performance outcomes in social media brand communities in the retailing sector. This study applies Service Dominant Logic and the consumption value theory to examine how retail customers derive value from CP in social media brand communities. Empirical results from 584 consumers confirm the CP influence on functional value, emotional value, relational value and entitativity value, which translate to brand relationship performance outcomes. The theoretical framework provides novel insights to marketing managers in understanding how CP can contribute to a retail brand’s value creation efforts, and how these value creating efforts contribute to brand building for retailers.

Introduction

Customer participation (CP) in brand experiences is gaining increasing attention in both academic and managerial practice as evidence suggests that customers and firms can achieve greater levels of value through CP (Payne et al., 2008; Payne et al., 2009; Merz et al., 2018). Findings from prior CP literature illustrate that enabling higher levels of CP benefits customers through improved quality, customised brand experiences, which allows customers to have more control over their brand experiences and stronger relational bonds (Yim et al., 2012; Chan et al., 2010). This in turn contributes value to the brand by reducing marketing costs, providing easy access to customers, improving the processes involved in acquisition of new customers, and improving customer retention and profitability (Auh et al., 2007; Payne et al., 2008, 2009; Merz et al., 2009, 2018). Digitalised platforms of engagement have since become integral for firms to facilitate CP to enable the co-creation of value with customers (Ramaswamy and Ozcan, 2016). In the retail consumer brand context, retailers globally continue to invest enormous resources in social media platforms to connect with customers through individual and communal processes that co-create value with customers (Carlson et al., 2017a). Studies examining participation in social media platforms confirm that engaged customers participate in idea generation and collaborative behaviours such as sharing knowledge and ideas to support the brand thus shaping their brand experiences (Alexander and Jaakkola, 2016; Carlson et al., 2018; Gong, 2018; Piyathasanan et al., 2017). Critical to the successful management of such CP in social media platforms for retailers is an understanding of how CP in an interactive, socially networked environment contributes to the creation of psychological benefits (i.e. perceived value) for customers, and to what extent this translates to (retail) brand relationship performance. The servicedominant (SD) logic literature considers customers as proactive cocreators rather than passive receivers of value and proactively encourages brands to be joint facilitators of the value co-creation process through the exchange of resources with customers (Payne et al., 2008; Merz et al., 2018). The notion of value co-creation in retail brand experiences is particularly salient among consumers of social media brand communities, as these communities are highly interactive and socially networked (Breidbach et al., 2014; De Vries and Carlson, 2014; Ramaswamy and Ozcan, 2016). For example, customers participate by providing information to the brand, jointly making decisions on product development opportunities and brand experience improvements, as well as generate content with other consumers (Gensler et al., 2013).