Strategic sustainability in the digital era: signaling theory and consumer responses in luxury fashion

Purpose This study investigates how luxury marketing strategies and environmental marketing strategies influence brand reputation, trust, loyalty, digital engagement, and recommendations in the luxury fashion industry. Grounded in signaling theory, it examines how green new products introduced by luxury fashion houses (LFHs) act as credible sustainability signals, shaping consumer perceptions and behaviors. Design/methodology/approach Data were collected from 541 respondents who had experienced high-end luxury retail stores across China's tier-1 metropolitan centers. Using partial least squares structural equation modeling (PLS-SEM). Findings The results reveal that both luxury and environmental marketing strategies significantly enhance brand reputation, which in turn drives brand trust, loyalty, and digital engagement. Sustainability involvement positively moderates the relationship between brand reputation and loyalty, though not between reputation and trust. Moreover, digital engagement shapes the processing and interpretation of sustainability signals in digital environments, thereby encouraging stronger consumer advocacy. Practical implications The findings suggest that luxury fashion houses can strengthen brand equity and consumer loyalty by integrating authentic sustainability initiatives into their branding strategies. In emerging markets like China, where sustainability also conveys cultural capital and social distinction, aligning green initiatives with aspirational brand values can yield significant competitive advantages. Originality/value This study extends signaling theory to luxury branding and sustainability, highlighting digital engagement as a digitally enabled mechanism through which sustainability signals are translated into consumer responses. It contributes to understanding how LFHs can leverage sustainability to enhance consumer relationships and brand reputation in the emerging luxury industry.