Effective Storytelling in a Fashion-based Crowdfunding Campaign: The Impact of Narrative Temporality, Narrative Appeal, and Mental Simulation on Crowd-funder Engagement

Abstract

The entrepreneurial world has witnessed a revolutionary shift from conventional seed funding solutions, such as angel investors, venture capitalists, and governmental funds, to crowdfunding. Although crowdfunding platforms are influential in introducing investors/crowd-funders to fashion entrepreneurs’ stories, most narratives fail to effectively tell a story that brings their ideas to life. To contribute to the research deficiencies in reward-based fashion crowdfunding (RBFC), this study sought to find the effects of narrative temporality and narrative appeal on crowd-funders’ backing intention, electronic word-of-mouth (e-WOM), and co-creation through the mediation of narrative transportation. This study also investigates how mental simulation moderates the effects of narrative appeal on crowd-funders’ backing intention, e-WOM, and co-creation. A comprehensive literature review and thematic analyses were conducted to explore the campaign structure and narrative strategy used in existing crowdfunding campaigns (i.e., reward-based fashion crowdfunding campaigns from Kickstarter and Indiegogo) and to generate the initial list of narrative statements for stimuli. Following thematic analysis, two pretest surveys were conducted to finalize the experimental stimuli. This study utilized an experimental method to investigate how different narrative antecedents addressed in RBFC campaigns simulate the engagement of crowd-funders via narrative transportation. Study 1 aimed to investigate the effects of narrative temporality (result in progress vs. ongoing journey vs. control) on crowd-funders’ engagement including backing intention, e-WOM, and co-creation, while examining the mediating role of narrative transportation. Study 2 employed a between-subject 3 (narrative appeal: informational vs. transformational vs. control) × 2 (mental simulation: process vs. outcome) factorial design experiment. Study 2 investigated the effects of narrative appeal (informational, transformational, and control) on backing intention, e-WOM, and co-creation, along with the mediating role of narrative transportation and the moderating role of mental simulation (process vs. outcomes). For the pretests and main studies, U.S. adult consumers were recruited from Amazon MTurk and Centiment, respectively. In study 1, the results of the univariate analysis of variance (ANOVA) and follow-up post-hoc tests for each narrative temporality clarified the rationale behind the comparative impact of various narrative strategies. For RIP, the effects of narrative temporality toward the crowd-funders’ backing intention and e-WOM were higher than OJ and control. The outcome of the mediation analysis showed that narrative transportation acted as a mediator in the interaction between narrative temporality and each crowdfunding engagement variable. Study 2 showed that informational appeal evoked a higher intention to back and share the information electronically; however, transformational appeal evoked a higher intention of co-creation. The mediation model demonstrated that narrative transportation mediated the relationship between narrative appeal in crowdfunding campaigns and crowd-funders’ tendency of backing, e-WOM, and co-creation. The moderation of mental simulation was significant for e-WOM only, not for backing intention and co-creation. The potential applications of this research include the assessment of consumer perception and mapping for an appropriate RBFC storytelling strategy along with an integrative research model.