Small apparel retailers face extreme competition with larger retailers. Large retailers have the upper hand in resources to stay updated with various trends, specifically social media. Social media has lowered the barriers to enter the retail industry. However, once these small retailers enter, half of them fail because they don't attract and retain customers. Small-medium enterprises (SMEs) greatly impact the economy, so it is important to study various facets of their business to increase performance. The purpose of this study is to investigate customer's development of social capital (i.e. affiliation, responsiveness, shared values, norm of reciprocity) in small apparel retailer's Instagram page that ultimately lead to purchase intentions for the retailer. Perceived benefits (i.e. perceived usefulness, perceived enjoyment) are also investigated in relation to purchase intentions. More specifically, social bonding, brand identification and trust are examined as mediating variables between the perceived level of social capital, perceived benefits and purchase intentions. Over a 3-month period, 200 responses were collected from students at a southern university. The findings reveal that younger customers develop a relationship with retailers on Instagram and it transfers to behavioral outcomes towards the retailer. The theoretical contribution of this study draws from the lack of literature for small apparel retailer and social capital built in Instagram, leading to purchase intentions. Managers can implement the findings into their social media marketing strategies to improve business performance. Lastly, this study has methodological limitations that creates opportunity for future studies.
