T O SELL OR NOT TO SELL

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T O SELL OR NOT TO SELL

– A N EXPLORATORY STUDY ABOUT THE MOTIVATIONAL DRIVERS AND BARRIERS OF RESELLING PERSONAL LUXURY GOODS

Thesis number 2020.5.08 Thesis for Two year Master, 30 ECTS

Textile Management Anu Soiniitty Lisa Sittig

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Title: To sell or not to sell – An exploratory study about the motivational drivers and barriers of reselling personal luxury goods

Publication year: 2020

Author: Anu Soiniitty, Lisa Sittig Supervisor: Jonas Larsson

Abstract

Purpose – The purpose of this study is to explore the consumer resale behaviour of Millennial consumers in the context of personal luxury goods in order to identify the motivational drivers and barriers of reselling. Prior discussions about resale behaviour have focused on disposition behaviour, the relation of resale behaviour and purchasing, as well as meanings associated with reselling personal luxury goods. Yet, only few studies have approached consumer resale behaviour from the perspective of possessing, thus neglecting the significance of resale barriers.

Consequently, this paper aims to provide a comprehensive overview of resale behaviour motivations by exploring the phenomenon from the view of the whole consumption cycle, consisting of purchasing, possessing and disposing.

Design/methodology/approach – This research employed a qualitative, exploratory approach, including thematic analysis using empirical data from semi-structured interviews with ten European Millennials. Consumer resale behaviour was examined in the context of personal luxury goods.

Findings – Results indicate that personal luxury goods are reluctantly disposed, but chiefly resold when given away. The motivations to resell or not to resell personal luxury items are exhibiting three types of reasoning: utilitarian, hedonic and social motivations. Based on the categorisation of resale drivers and barriers, the authors propose a conceptual model to show the individual motivations. Highly notable is the phase of possession, which has a strong influence on the decision of whether to engage in reselling or not.

Originality/value – The paper discusses the relevance of each phase of the consumption cycle when studying consumer resale behaviour motivations. More, it challenges the ‘end of ownership’ approach and suggests luxury brands to consider the weight of possessing if applying such business models.

Keywords – Consumer resale behaviour, consumer resale motivations, personal luxury goods, second-hand markets, exploratory research

Paper type – Research paper

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Figures

Figure 1: The lens of conceptual framework 30

Figure 2: Motivations of reselling personal luxury goods according to Millennial consumers 63

Tables

Table 1: Taxonomy of consumer online resale behaviour (Chu and Liao 2015) 24

Table 2: General information of the sample 43

Table 3: Summary of empirical findings of all participating Millennial consumers 64

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1 Introduction

Each time media points the finger at the fashion industry and calls for sustainability, a line of online resale players is ready to cash in the profits with open arms. Companies such as Vestiaire Collective, The RealReal and Depop have taken the advantage of these glory days by creating an illusion of sustainable luxury – or “the new luxury” (Vestiaire Collective 2020) as Vestiaire Collective states it on their website. By promising a relief from guilt that is caused by the combination of the desire to consume and the anxiety of global warming, the second-hand markets are alluring luxury consumers to resell their preloved personal luxury goods: “~50%

of all The RealReal consignors cite environmental impact or extending the life cycle of luxury items as key motivators for consigning” (RealReal 2020). Not that it would be only a ploy; the emergence of second-hand marketplaces has certainly reformed consumers consumption habits from discarding to recycling and reusing and thus has brought the textile industry towards a more circular economy. However, much of the pre-owned boom is fuelled by the idea of short- term ownership, that is to say, reselling used and purchasing of new items. Without adopting a further position on whether reselling can be considered as greenwashing or not, it embodies an interesting and growing phenomenon which provides diverse opportunities for the industry to develop.

When looking into the consumer resale behaviour more closely, the personal luxury sector stands out as an unusual and exciting business prospective. Numerous consumers, investors, as well as researchers certainly fall for the €1.3 trillion luxury industry (Bain & Company 2020);

the domain inherits outrageous products, attractive financial possibilities as well as a rich cultural background. As the name implies, luxury is intended for those in higher classes with extravagant lifestyles, and therefore a question arises: why would luxury consumers need to sell their possessions?

The luxury sector operates vigorously in attracting luxury consumers by using the power of its subjectivity and psychological strength (Kapferer and Bastien 2012). The world-wide access to luxury goods, the global communication, such as advertising, social media presence or public brand cooperations, accompanied with higher spending power are all contributing to the ongoing success of the luxury industry (Ibid). As a result, the democratisation (Kapferer and Bastien 2012; Yeoman and McMahon-Beattie 2018) of the domain induces consumers beyond the highest social classes; numerous consumers without exceptional incomes are engaging even though it may lead to individual financial bottlenecks. There is a particular consumer group that is found to be attracted by the luxury pieces: in 2019 almost 35 percent of Millennials are argued to participate in purchasing luxury goods, while in 2025 they are even expected to account for approximately 45 percent of the global luxury market (Bain & Company 2020). But how is this consumer group able to afford such a luxurious lifestyle when considering that these consumers are between the age of 24 and 40 (Ibid) and therefore might stand at the beginning of their careers? The secondary luxury market particularly enables opportunities for new consumers to take part in the luxury industry by providing the possibility to both acquire and sell previously owned goods. In fact, the personal luxury second-hand market already reached €26 billion in

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2019 (Bain & Company 2020) in which almost 40 percent of Millennials have participated in reselling luxury on secondary markets (Boston Consulting Group and Altagamma 2019).

Moreover, as more than 60 percent of Millennials consider sustainability while purchasing (Boston Consulting Group and Altagamma 2019), second-hand markets also seem to be a suitable solution for these eco-friendly consumers. The secondary markets not only open up the convenience to purchase with conscious decisions, it also offers opportunities to get rid of goods, cleaning the closet, while at the same time making money and creating space for new items. As the Boston Consulting Group and Altagamma 2019 state, secondary markets are able to answer the need for newness which is claimed to be a trend among these young consumers (Eastman and Liu 2012).

While secondary markets give the possibility to inherit personal luxury at a lower price range, it also provides the desired solution to the unattainable, limited products. That is to say, consumers have also the chance to acquire special pre-used products which usually are tied to exclusivity and long waiting lists. Nevertheless, it is not without consequences as the prices on the secondary market might turn out to be higher than the retail prices for brand new items. In short, the second-hand luxury market offers not only fruitful playground for ‘consumers of luxury’ but also for ‘luxury consumers’. Driven by that, reselling of luxury goods can be considered to overcome a de-stigmatisation and turned into attractive activity in vogue.

Whereas just a few months ago the luxury segment was still expected to continue its path of success and grow by 4 percent in the following years (Boston Consulting Group and Altagamma 2019), it is surprising how fast the Covid-19 pandemic has turned the industry upside down.

The luxury business has been severely affected by the loss of consumers and its fragile supply chains (Business of Fashion and McKinsey & Company 2020). As for the time being, it is not possible to make any solid predictions of the luxury’s destiny, preliminary proofs are found that the C2C second-hand market of personal luxury is remaining its prevalence. Due to the economic slowdown and the uncertainty of the future, a growing number of consumers have turned to reselling in order to receive some extra cash (Lieber 2020). Although reselling may build up the feeling of financial security, is a monetary benefit the only reason to consider reselling? Do resellers have more spare time to consume at home? Or what other resale motivations prompt consumers, even financially spared luxury consumers, to slip in into the role of a reseller?

Although the popularity of reselling personal luxury goods is growing, there is still a significant number of luxury consumers who has not yet engaged in reselling. In the study by Boston Consulting Group and Altagamma (2019), around 60 percent of Millennial luxury consumers state that they have never sold any luxury items. However, it does not mean that reselling would have not crossed their minds. As a matter of fact, more than 10 percent of those Millennial consumers who have not engaged in reselling claim that they have taken resale value into account while purchasing (Ibid). The gap between the intention and action is interesting as it shows that there are still considerable barriers that prevent consumers from reselling. Hence, further questions arise: why have the consumers who considered resale while purchasing not

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sold their luxury products? And, why have the remaining 50 percent of Millennial consumers not considered reselling at all?

Accordingly, of interest is what makes consumers to consider reselling of their personal luxury goods and, and on the flip side, what prevents consumers from reselling. The focus of this study is placed on the reasoning that is behind a resale and no resale, which consequently forms the unit of analysis of this study – motivations to resell and not to resell. Motivations are defined by the pursuit of a particular goal, which is influenced by two determinants: situational stimuli and individual preferences (Heckhausen and Heckhausen 2018). As a result, a motivation is an individually evaluated interplay of “various incentives associated with the activity, its outcome, and its internal (self-evaluative) and external consequences” (Ibid, p. 9). That is to say, motivations can take various directions, which eventually may also drive consumers to develop an opposite motivation, for example not to resale. Consequently, the present research will investigate motivations to resell and not to resell, namely resale drivers and resale barriers, with a particular interest in personal luxury goods of Millennial consumers.

1.1 Research gap and positioning of study

The emergence of online marketplaces of second-hand goods (Turunen, Leipämaa-Leskinen and Sihvonen 2018), the de-stigmatisation of the second-hand trade (Turunen and Leipämaa- Leskinen 2015; Ferraro, Sands and Brace-Govan 2016), and the increased accessibility of luxury goods in general (Kapferer 2012b) have created new room for research. The second- hand market becomes more attractive for sellers as the number of second-hand luxury consumers expands (Bain & Company 2020). As a result, the C2C second-hand personal luxury market is growing in a rapid phase (Ibid). Young consumers, especially Millennials, who are proven to have a continuous hunger for newness (Eastman and Liu 2012), have discovered the benefit of reselling in the interest of funding new, future purchases (Chu and Liao 2007; Chu 2010; Chu and Liao 2015).

Although the second-hand market has already been under increased research, the consumer behaviour literature, particularly within the personal luxury sphere, has predominantly focused on consumer acquisition and possession of goods (Amatulli and Guido 2011; Turunen and Leipämaa-Leskinen 2015) while neglecting the phase of disposition. Disposition is a phase in which a consumer stops using a still functioning product for its original purpose and decides to pass on the ownership (Paden and Stell 2005; Jacoby, Berning and Dietvorst 1977). As prior research has demonstrated, the disposition of goods is imposingly linked to purchase decisions (Chu and Liao 2007; Chu 2010; Lee et al. 2015; Cruz-Cardenas, Gonzalez, and del Val Nunez 2016), and thus requires further examination to gain a greater understanding of disposition behaviour in large.

To date, the field of research concerning disposition behaviour has mainly focused on the methods of disposition (Jacoby, Berning and Dietvorst 1977; Paden and Stell 2005) and the reasons for selecting a particular type of disposition (Hanson 1980; Shim 1995; Laitala 2014).

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Notably, studies of this perspective are closely connected to the research of recycling behaviour (Hornik et al. 1995). Although, some initial research (Chu and Liao 2007; 2015) have attempted to define and categorise online consumer resale behaviour, very little is still known about the motivations in the context of reselling. Only preliminary, exploratory studies have been conducted about the drivers of reselling goods (Chu 2013; Laitala 2014); these mostly refer to monetary reasons and avoidance of waste (Shim 1995; Joung and Park-Poaps 2013), and are conducted in the other contexts than personal luxury goods.

On the other hand, motivations not only describe the incentives to resell but also the reasoning why resale is not even considered or succeeded. Consequently, possible barriers of reselling have to be investigated as these can only be assumed by the aforementioned drivers due to limited existing research in consumer behaviour. This gives cause to think as some consumer’s willingness to keep a particular product may expire due to various reasons (Chu and Liao 2007;

2015; Chu 2013). According to Paden and Stell (2005), a product’s life is formed by the stages of the purchase, usage and lastly disposition once the ‘product’s expiration’ emerges. This sequence of stages appears almost typically for a consumer, who finally has to pick a disposal method; donating, re-using or throwing away are commonly rather rare options when talking about high-priced products such as personal luxury. Interestingly, those products are most likely resold when disposed of (Jacoby, Berning and Dietvorst 1977), which showcases again the relevance of this research in reselling. Further consideration should be given to the potential financial investment of luxury products and the inability of gaining profit in case a resale is not realised. Thus, it can be considered that both resale drivers and barriers imply a strong significance in disposal behaviour. Consequently, the phase of disposition in the consumption cycle of personal luxury goods receives particular emphasis in this paper.

As pointed out, research about resale behaviour in the context of personal luxury goods is still underdeveloped and solely focusing on exploring the meanings and values related to selling (Turunen, Cervellon and Carey 2019), but not on analysing the factors that drive or hinder a consumer to act as a reseller. Because personal luxury goods are the most accessible form of luxury compared to other categories like luxury cars, or luxury hospitality, there is a greater likelihood that those products end up on the secondary market. This creates an ideal ground for investigations of the contrasting motifs of reselling luxury goods.

Finally, marketers describe the generation of Millennials as ‘status consumers’ who are keen on luxury products more than other generations (Eastman and Liu 2012). This is recognisable in sales since Millennials are responsible for 35 percent of luxury sales (Bain & Company 2020), while at the same time 48 percent of this consumer group is also engaged in second- hand markets (Boston Consulting Group and Altagamma 2019). As there is still a lack of existing research about Millennials within the consumer resale behaviour of personal luxury, this research is deemed to be necessary to gain greater knowledge about the phenomenon. To conclude, this research offers valuable insights into consumer behaviour in luxury and second- hand luxury contexts, which is relevant for both science and the fashion and textile industry.

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1.2 Purpose and research questions

The purpose of this study is to explore the resale behaviour of Millennial consumers in the context of personal luxury goods in order to identify the motivational drivers and barriers of reselling. Therefore, the following research questions are generated and researched throughout the study:

RQ1: How is resale behaviour of personal luxury consumers characterised?

To be able to draw any conclusions on consumer resale behaviour motivations in the context of personal luxury (RQ2 and RQ3), the first step of this study is to gain further understanding about the consideration of resale opportunities by personal luxury consumers. According to Paden and Stell (2005), a product’s lifecycle, regardless of its monetary value, is shaped by the stages of acquisition, product usage and finally disposition once the product’s “usefulness expires” (Ibid, p. 107). These stages are influenced by many factors and might occur differently for each product owner, nevertheless, it appears nearly naturally to eventually consider a disposal (Ibid). Even though there are many forms of disposition, high-involvement products like personal luxury goods, are most likely to get resold when disposed of (Jacoby, Berning and Dietvorst 1977; Lee et al. 2015). In regard to that, the first research question examines different levels of involvement in consumer resale behaviour: when does the resale consideration begin?

How is resale behaviour embodied by different consumers? What is specific for this market?

Chu and Liao (2007; 2015) propose a taxonomy that classifies online resale behaviour depending on realised resales. However, less attention has previously given to the characteristics of resale behaviour from the perspective of unrealised resale processes.

Consequently, RQ1 seeks to create a foundation for determining the reasoning behind motivational drivers and barriers.

RQ2: What are the drivers of reselling personal luxury goods?

Why do consumers resell personal luxury goods? What are the determinants for resale, and how do consumers motivate their reselling behaviour in the domain of personal luxury? The main interest of this study is to determine the underlying motivations behind the consumer resale behaviour of personal luxury goods, and to find out how these motivations are negotiated by the Millennials. Build on prior research (Chu 2013; Chu and Liao 2015; Turunen, Cervellon and Carey 2019), the goal is to shed light on the fast-growing second-hand luxury market from the perspective of a seller. As acquisition and disposition of goods are closely linked in the cycle of consumption (Chu and Liao 2007; 2015), it is essential to first explore the essence of luxury possessions as well as the motivations of purchasing both first-hand and second-hand luxury, and hence accumulate further knowledge on the drivers for reselling.

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RQ3: What are the barriers to reselling personal luxury goods?

Finally, this research attempts to recognise the possible barriers to reselling personal luxury possessions. Although some research (Liao and Chu 2013; Turunen and Pöyry 2019) suggest that resale awareness has a positive influence on the purchase-decisions and hence might later encourage to reselling, it is evident that there are still substantial barriers to such kind of disposal of luxury items. While one might consider that a higher monetary value contributes to greater eagerness to retrieve the money invested in the product after the usage (Chu and Liao 2010), it is not unambiguous that luxury owners would be willing to dispose of their luxury items – those items often embody significant meanings to their owners (McCracken 1986; Belk 1988;

Turunen 2015) and are thus perceived as a part of the self (Belk 1988). This, on the other hand, may hinder the willingness to resell luxury items. Accordingly, it is crucial to investigate why personal luxury owners have not sold their luxury items, what kind of meanings are attached to the items, and what might prevent the consumer from selling its luxury goods. Moreover, these questions are further anticipated to assist on understanding the consumer resale behaviour in general, that is to say, support the findings of the research question one.

1.3 Delimitations

This section aims to briefly define the position and the delimitations of this study in order to provide guidance for the reader. However, the grounds for particular limitations will be further discussed in the subsequent chapters: 2. Conceptual framework, and 3. Methodological framework. This study deals with the consumer-to-consumer (C2C) resale behaviour phenomenon, and thus, the business-to-consumer (B2C) resale aspect will be disregarded.

Secondly, this research involves consumers who have purchased luxury items for their own use, which describes one the most important sample criteria within this research. This criterion forms those candidates to eligible ‘consumer resellers’ as these products can get sold on the second-hand market – from consumer to consumer. According to that requirement, consumers acting as professional resellers are excluded as these resellers aim to repetitively sell a greater number of similar products to increase profit (Chu and Liao 2007). Consequently, their purchase of those items is not foreseen for self-use (Ibid) which stands in contrast to the pre- defined sample criteria.

Although this research is partially connected to disposition behaviour, it only examines resale motivations; defined by the pursuit of a particular goal, a motivation is individually influenced and evaluated by external and internal influences (Heckhausen and Heckhausen 2018).

Disposition is a last phase of a consumption cycle in which the consumers stops using a specific item, even though it still keeps the function (Jacoby, Berning and Dietvorst 1977). To be more exact, consumer resale is a particular method for product disposition. In view of this, the authors only consider motivations to resell or not to resale which comprises resale drivers and barriers.

Consequently, because of the consideration of the two contrary motivational directions, the authors intentionally regard realised and unrealised resale processes as equally important. This

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research aims to investigate different reasonings behind the two contrary motifs. To be more precise, this research does not foresee to identify from successful and failed attempts of reselling, it rather investigates internal motivations influencing a consumer to prompt or prevent a resale of a particular item from happening.

Further, this study is conducted in the domain of personal luxury goods, which consists of clothing, shoes, jewellery, watches, bags or other leather goods, accessories and cosmetics (Bain & Company 2020). The authors perceive both first- and second-hand, as well as vintage as luxury. In other words, the participants of the research might be engaged both in primary and secondary markets of personal luxury goods when acquiring products. Hence, the authors do not limit this study to a particular group of consumers even though product conditions or prices will range, luxury is still regarded as subjective to each individual.

Due to a high involvement of Millennial consumers in personal luxury consumption, this study intends to shed light on this particular age group (1980 – 1995) (Bain & Company), with a sample situated in Europe. The authors do not foresee a representation by this particular sample selection, rather Europe was regarded as the most adequate region for data collection since it is responsible for more than 50 percent of the total turnover of the second-hand personal luxury sales (Ibid). As a result, both men and women contributed to this research in order to realise an equal representation of resale behaviour phenomenon. Further explanation is given in chapter 3.

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2 Conceptual framework

Following the research aim, the subsequent chapter will serve as a tentative framework of resale behaviour in the context of personal luxury. It includes secondary scientific data, theories and preliminary concepts, as well as relevant statistical data to emphasise the vital relation of particular appearances. Noticeable is the importance of the consumption cycle, consisting of acquisition, possession and disposition (Arnould and Thompson 2005), which will be regarded throughout the whole research. At the beginning of the investigation, it is essential to build a preliminary understanding of resale behaviour and its related components. Hence, the essence of luxury is first examined in order to be able to understand what attracts consumers to buy luxury and why they express exceptional commitment towards these items. Building on discussed theories of the luxury chapter 2.1, an evaluation of the determinants of the C2C second-hand markets is required. While chapter 2.2 establishes an understanding of the role of buyers and especially resellers in C2C markets, it further confirms the importance of the inevitable connection between the process of acquisition and disposition. This finally contributes to the accumulated knowledge about resale behaviour in the third and most principal chapter 2.3. There, the authors will address contemporary resale behaviour studies to observe further comprehension. Conclusively, this assembled conceptual framework concerns the luxury domain, as well as second-hand markets, purchasing motivations and finally, resale behaviour. It serves as the foundation for the subsequent analysis of collected empirical data.

2.1 The concept of luxury

The luxury industry is still one of the ever-growing industries (Bain & Company 2020). It has been in a relatively stable position of growth; since 2010, the global segment of luxury constantly grew up to an estimated value of €1.3 trillion in 2019. The personal luxury market (clothing, shoes, jewellery, watches, bags and other leather goods, accessories and cosmetics) have had an average annual growth of +6 percent throughout the 21st century (Ibid). Previously, the segment has been spared to economic downs. Nevertheless, the current Covid-19 situation, which has frozen most of the trades, is a considerable threat for the luxury industry as well;

according to first results by Business of Fashion and McKinsey & Company (2020), the personal luxury segment is expected to shrink by 35–39 percent in 2020 compared to 2019.

After all, the luxury industry embodies an exciting field of research by engaging consumers to spend tremendous amounts of assets on materialistic products (Kapferer and Bastien 2012).

Besides, the fact that scarcity is highly attracting consumers makes the luxury industry even more interesting. By offering entry-level products (Silverstein and Fiske 2003; Kapferer 2012a), such as belts or key chains, some luxury brands also attempt to allure non-luxury consumers to join; the even more clever idea behind the luxury market is not the general access to luxury products, but to spread the intangible feeling of the world of luxury (Ibid). Once luxury in any kind or form has been experienced, it creates a form of addiction – “[…] once people have tasted luxury in whatever area, it is difficult to turn away from it – to come back to earth.” (Kapferer 2012a, p. 15).

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Luxury products, apart from the price level, often have one thing in common – owners are likely to connect emotions to them (Belk 1988). Thus, it can be assumed that luxury goods, compared to mass-produced commodities or lower-priced goods, require a much higher monetary and psychological investment before the actual purchase (Kapferer and Bastien 2012). The emotional bond between product and owner can presumably, therefore, be a lot stronger than with conventional products. Emotions play a crucial role as possessions embody and express consumers’ own selves (Belk 1988). As a purchase inherits investment, a resale often requires separation of these built connections (Roster 2001; Chu and Liao 2015); existing finds claim that a resale of possessions demands a process of disconnection of the emotions (Roster 2001).

Hence, it is essential to emphasise this relationship before the resale of products is even discussed.

As follows, the existing literature is being investigated in the concept of luxury and its distinct definitions marked by subjectivity and emotional attachment by its consumers. By doing that, the main definition of luxury is defined, and differences to non-luxury brands pointed out.

Moreover, a conglomerate of motivations which drive consumers to purchase luxury is inspected.

2.1.1 Definition of the luxury concept

What is luxury? Is luxury definable? The term ‘luxury’ is characterised by controversion, which describes, on the one hand, a common and multinational understanding but, on the other hand, bears the difficulty to define it; a particular state of luxury might not embody luxury for others, and what might be luxury today, may not be luxury tomorrow (Kapferer and Bastien 2012).

Separated into various categories and meanings, the term luxury is typical to take place in a wide range of situations in everyday life, and therefore defining is complex. Few authors even name the process of defining as a ‘debate’ among researchers (Kapferer and Valette-Florence 2016). Explanations might not be wrong, but due to subjective perceptions, these definitions do not illustrate basic and complete definitions (De Barnier, Falcy and Valette-Florence 2012). As an example of the range of definition, recent studies included definitions from sociology to economics to psychology, which addressed research within the field of social roles in luxury, motivational consumption behaviour or a more managerial perspective while looking at the price and assortment management (Kapferer 2012a).

The difficulty of defining is a result of subjectivity and individual perceptions. Although the idea of luxury is intended to be affordable only for few, the term luxury is ambiguous and easy to find in colloquial speech (Kapferer and Bastien 2012). For some people, it might outline the idea of an occasion of enjoyment, it may be used to portray an exceptional moment, marvellous results of extravagant beauty products or a gold-plated diamond ring by Cartier. According to Christodoulides, Michaelidou and Li (2009), the understanding of luxury differentiates itself from society to society. Luxury is an universal detectable term in the most diversified societies to describe a particular subjective state. Nevertheless, a recent analysis of interviews show that

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the circle of luxury is relatively small; by asking about the names of luxury brand examples, certain brand names appear repetitively, e.g. Louis Vuitton, Chanel, Rolex, Ferrari, Gucci, Tiffany, Prada, […] (IPSOS 2014). It surprisingly results in a more comparable illusion of luxury from different origins, even though prior research in consumer behaviour shows that different cultures see the world through different eyes and therefore create, in this sense, ‘own’

meanings and values of the world (McCracken 1986).

To come back to the more initial understanding of the concept of luxury, a subjective understanding is attempted intentionally less disregard in the following definition. Therefore, first the subsequent focus lies on the perspective of a more classical, institutional way of describing and characterising the ‘absolute’ concept of luxury (KPMG 2009; Kapferer 2012b) without consideration of relativity and time. According to one of the most known accounting and consulting groups KPMG, the following definition of a luxury brand was developed after its market research in 2009.

“A luxury brand is a brand whose underlying goods or services go far beyond the normal size of the respective category in terms of quality or value. It is characterised primarily by exclusivity and scarcity, from which a high price level results as a typical characteristic. Last but not least, a luxury brand enjoys outstanding recognition for its authentic and traditional values.” (KPMG 2009, p. 7)

Recognisable in this definition are four main criteria of luxury brands: (1) beyond quality or value, (2) exclusivity and scarcity, (3) high price level, and (4) authentic and traditional values (KPMG 2009). These criteria will be further described in this conceptual framework to study the definition of luxury.

According to KPMG (2009), the quality and value of a luxurious product are characterised by being (1) “far beyond the normal size of the respective category” (Ibid, p. 7). Luxury products are expected to inherit craftsmanship at its best quality and superior characteristics (Vigneron and Johnson 2004). Additionally, as researchers Chandon, Laurent and Valette-Florence (2016) stated, “previous luxury required craftsmanship and artistic creativity” with a mix of technologies, design, and sophistication (Vigneron and Johnson 2004). Customers expect non- mass-produced goods or services with excellent quality (Dubois, Laurent and Czellar 2001;

Keller 2009); the quality has to be as high as customers’ expectations or even exceed them (Silverstein and Fiske 2003). If not, doubts arise, which weakens the image of a luxury brand (Keller 2009).

The second criterion concerns (2) “exclusivity and scarcity” (Ibid, p. 7) and is based on the principle of rarity (Phau and Prendergast 2000; De Barnier, Falcy and Valette-Florence 2012;

Kapferer and Valette-Florence 2018), also called ‘abundant rarity’ (Kapferer 2012b). It “[…]

suggests that in order to maintain prestige, luxury brands must sustain high levels of awareness and tightly controlled brand diffusion to enhance exclusivity.” (Phau and Prendergast 2000, p.

122). A luxury brand has to keep a consumer’s perception as attractive as possible, while at the same time, keeping a distance towards the consumer in form of price, limited quantities or its

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exclusivity (Kapferer and Valette-Florence 2016). Thus, there is a paradox; the objective of luxury brands is to be exclusive while simultaneously aiming to increase the sales globally.

However, too much distribution, awareness, and proliferation might weaken the luxury brand and its embodiment as a superior and scarce brand (De Barnier, Falcy and Valette-Florence 2012). The subjective concept of luxury, therefore, has to get balanced between the demand and supply, scarcity and the awareness of consumers.

For one thing, high quality goes hand in hand with craftsmanship and production. Besides that, consumers naturally perceive a (3) high price as an indicator of high quality (Rao and Monroe 1989). Therefore, the price strategy of those brands is of great importance. Exceptional artisan craftsmanship, as well as outstanding workmanship, and the finest materials are not enough to encourage consumers to spend an extraordinary amount of money (Kapferer and Tabatoni 2011). The pricing itself not only justify the value of the product or service, but has to overcome the borders of reasonable pricing of non-luxury brands. The price has to be unnatural, in other words, it has to accomplish the “sociological function of luxury” (Ibid, p. 6), which is followed by acting as a “social stratifier” (Ibid, p. 6), so that the consumers automatically start creating a ‘dream’ around a brand and product (Vigneron and Johnson 2004).

Finally, (4) ‘heritage and traditions’ are being seen as crucial factors for luxury brands and are, therefore, seen as the fourth category in the aforementioned definition by KPMG (2009). First of all, the heritage evokes authentic and unique characteristics which distinguish a brand from others (Fionda and Moore 2009). As a major part of a brand identity, the historical development of a brand has several advantages. First it connects stakeholders and consumers, secondly it embodies unique characteristics compared to other brands, and thirdly, results in a growing value of the brand equity (Keller and Rickey 2006). Built on traditions and heritage, marketing actions for luxury brands have the aim to transmit certain feelings, a unique image and even a special aura towards consumers and competitors (Urde, Greyser and Balmer 2007). In other words, as Kapferer stated: “[luxury brands] offer more than mere objects: they provide a reference of good taste.” (Kapferer 1997, p. 253). Consequently, it forms a certain image which consumers will receive by the brand. This helps in connecting the brand’s values with consumers’ personal values and norms.

2.1.2 Motivations behind purchasing luxury

As the definition by KPMG (2009) is limited to initial criteria, it additionally has to be regarded from a perspective of consumer behaviour as subjectivity is a crucial factor within the domain of luxury. Therefore, to define the luxury market more in detail, the following chapter will investigate the motivational intentions of possessing and acquiring luxury goods.

To understand consumer behaviour, it is first necessary to perceive the significance of possessions; especially noteworthy is the relation of a consumer and its belongings. These possessions express, intentionally or unintentionally, certain subjective perceptions and meanings of a person within a society (McCracken 1986). At the same time, special regard is

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given to the fact that possessions support individuals in defining and constructing their extended self (Belk 1988). Therefore, emotional and meaningful attachments have to be considered during the whole research while concerning phases of acquisition, possession and disposition.

The significant difference between luxury and non-luxury brands has to be pointed out.

Previous research indicates (Vigneron and Johnson 2004; Hudders 2012) that luxury brands distinguish themselves with its psychological benefits and social motivations as these can emit

“hidden information about the owner to significant others” (Hudders 2012, p. 610). Successful expression of those values can link consumers to the so-called ‘dream dimension’ (Dubois and Paternault 1995); a dimension which answers consumers’ psychological needs with benefits of a luxury brand (De Barnier, Falcy and Valette-Florence 2012). Also, researchers Vigneron and Johnson (2004) believe that luxury brands are linked to psychological values such as self- esteem and social recognition. At the same time, these bespoken values are naturally connected not only to luxury brands’ expressions but also to its products’ or services’ composition, including the products’ aura (Ibid). As a result, psychological benefits embody a distinguishing criterion compared to non-luxury brands (Vigneron and Johnson 1999; Vickers and Renand 2003). In other words, a luxury brand is regarded as “[...] one that has premium products, pleasures a central benefit, and connects with consumers on an emotional level” (Hagtveded and Patrick 2009, p. 609). This connection constitutes an essential focus on the special relationship between a product and its owner. As mentioned before, meanings and emotions attached to possessions are crucial factors in understanding consumer behaviour, especially in the context of purchasing and reselling luxury possessions.

Nevertheless, the question ‘why’ consumers purchase luxury goods can have different forms of motivations. Several researchers of luxury brand perceptions (Kapferer 1998; Vigneron and Johnson 1999; Dubois, Laurent and Czellar 2001; Vickers and Renand 2003), have found out that consumers purchase luxury goods for three main motivations: (1) functionalism (e.g.

quality), (2) experimentalism (e.g. the need of pleasure or hedonism), and (3) symbolic interactionism (e.g. affiliation to group or confession of social status). According to Vickers and Renand (2003), only a successful accomplishment of all three criteria distinguish luxury brands from non-luxury brands. Even though several researchers use different terminologies for describing the motivational factors, this study will use the synonyms of (1) utilitarian, (2) hedonic, and (3) social motivations which will be further explained in the subsequent paragraphs.

First, some researchers are convinced of a fundamental motivation in the form of utility or functionalism, such as the quality and product usage (Kapferer 1998; Dubois, Laurent and Czellar 2001; Vickers and Renand 2003; Vigneron and Johnson 2004; Tynan, McKechnie and Chhuon 2010). Those attributes can be referred to as tangible characteristics of a product (Hirschman and Holbrook 1982). Utilitarian motivations are led by rational, deliberated, and goal determined motifs (Ibid). This is one of the reasons why some researchers see it as a non- existent variable in the context of luxury; according to Hudders (2012), the necessity of a luxury purchase is not driven by the need of a functional item (e.g. a bag to carry objects).

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However, the investment factor should not be missed in the context of luxury items as it is a clear utilitarian motive of purchasing. Certain products will keep gaining value over time and are regarded as capital investments (Merten 2015; Turunen and Pöyry 2019) as they show “most valuable artefacts craved in the secondary market” (Merten 2015, p. 554). To name some examples, financial investments can be old, classic handbags, vintage watches, particular jewelry, as well as fashion (Garms 2018). Investing in luxury goods offers a chance to be independent of stocks or bonds; after the financial crisis in 2009, the trend of investing in luxury goods increasingly raised (Ibid). For some, investing in products instead of stocks is being considered as a profound asset protection or a future retirement provision (Brückner 2012;

Merten 2015; Luckwaldt 2020). According to research by Business of Fashion and McKinsey

& Company (2020), a suitable example for increased monetary value is the famous ‘Kelly’ bag by the French luxury manufacturer Hermès. Its price value increased by 58 percent in 13 years, starting with a sales price of ≈ €4.300 in 2000. Another leading luxury segment is luxury watches in which some specific models promise stable and lasting performances (Brückner 2012; Merten 2015). Particular timepieces over €25.000 within this segment grew by 35 percent, watches between €10.000 and €25.000 already 19 percent (Luckwaldt 2020).

Yet, a distinction must also be made here. Certain purchases in the luxury segment are made in the form of an investment that may not foresee the usage of the purchase. In that manner, the product retains the highest possible resale value (Brückner 2012), which is considered as an utilitarian motive. However, investing capital does not always anticipate reselling the product for potentially more profit. For some, it embodies an investment in their own selves (Belk 1988), in the future, or the collection (Garms 2018). Building collections might emotionally connect the consumer with the products over time and hence, the consumer might subconsciously recognise parts of this collection as an expression “of one’s identity” (Belk 1988, p. 154). By spending time and effort searching and buying for collections, it strongly connects the consumer and can be referred to as “symbolic self-enhancement” (Belk 1988, p.

154). These motivations no longer refer to the previously discussed utilitarian motifs, but speak for hedonistic reasons.

Hedonic motivations also referred to as experimentalism (Vickers and Renand 2003), such as pleasure, fantasy and emotions (Hirschman and Holbrook 1982), are one of the three successful benefits of luxury brands. Besides external motivations (e.g. showing off and branding), consumers bear a need for “experience of time, space, authenticity, community individuality and well-being” which are summed up as internal, hedonic motivations (Yeoman and McMahon-Beattie 2018, p. 205). It can also be referred to as the actual desire of a consumer.

Functionalism is no longer justified in this category. Hedonic motivations, such as the product’s rarity, the customer’s taste, or the perceived self-expression or the overall feeling when wearing the product, are put in the foreground and play an essential role in the purchase decision (De Barnier, Rodina and Valette-Florence 2006).

Finally, social motivations, also called symbolic interactionism (Vickers and Renand 2003), are exemplified by the visual expression of social status to others. Furthermore, it is needed to summarise the natural force of social stratification within groups of individuals. According to

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previous sociology research, a humanities’ need for some form of social classification exist (Powderly and Macnulty 1990; Veblen 2001; Kapferer and Bastien 2012). As stated by the French sociologist Pierre Bourdieu (1984), individuals and groups with a high social capital in the form of social and cultural capital, gain power within relationships to others and set the rules in terms of taste. This, at the same time, embodies a dominant of societal hierarchies (Ibid).

The connection to luxury lies in the ability of the luxury concept to create social stratification because it is mainly based on the consumers’ perceptions, and the recognition and the awareness of a brand (Vigneron and Johnson 2004). According to Kapferer and Bastien (2018, p.18), “The essence of luxury, therefore, is the symbolic desire to belong to a superior class”. Societally accepted taste in the form of luxury goods and services embody high social capital, which is given initially to privileged by a particular form of education, assets and values (Bourdieu 1984). Thus, luxury embodies a more obvious form of this taste which makes it possible for individuals to gain acceptance. Moreover, the luxury concept is based on conformity and distinction of a social group within a society (Bourdieu 1984). Members of a society can, intentionally or unintentionally, choose and categorise themselves within a particular social stratum according to own and others’ perceptions and, obviously, financial limits.

According to previous research, it is needed to examine three of the most common social, motivational effects. (1) The Snob and (2) the Veblen effect both explain the motivation and ability to distinguish from other groups, for example, referred to lower classes the consumer does not want to get linked to (Veblen 1899; Leibenstein 1950). To further distinguish, the Snob effect is driven by the uniqueness and exclusivity of a product (Leibenstein 1950) which is given because of the ability to purchase something someone else is not able to; this is mostly driven by the need for uniqueness. The (2) Veblen effect is emphasised by displaying expressive possessions to spread the image of high income and solid wealth (Veblen 1899) to ensure a distinction to lower classes. Further, the (3) Bandwagon effect describes the motivation and ability to conform or imitate a reference group and its purchasing pattern because of the ability to purchase something that others also purchase which is mostly driven by the need for conformity (Leibenstein 1950).

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2.2 Second-hand luxury

Previously, second-hand was generally associated with low-income classes that could not afford to buy products as brand-new (Beard 2015). However, during the past decade, second-hand has undergone a tremendous change from being classified as a shameful act to becoming a hobby of trendy influencers. The de-stigmatisation of second-hand purchasing in the 21st century is a result of the rising concerns about environmental issues and sustainability (Guiot and Roux 2010; Beard 2015; Amatulli et al. 2018; Kessous and Valette-Florence 2019), the emergence of new online platforms (Turunen, Leipämaa-Leskinen and Sihvonen 2018), as well as growing need for uniqueness and self-expression as a countermovement to mass production (Cervellon, Carey and Harms 2012; Ferraro, Sands and Brace-Govan 2016; Sihvonen and Turunen 2016).

The second-hand trend has gained a significant foothold, especially within the fashion and textile industry. Not only has the second-hand boom influenced the middle and premium markets but also the luxury segment has shown great growth in preowned goods’ sales.

According to Bain & Company’s Luxury Goods Worldwide Market Study for Fondazione Altagamma (2020), the second-hand market for personal luxury goods has grown by 10 percent per year since 2015, reaching €26 billion in 2019. The market is led by European consumers, accounting for 55 percent of the total market, and profoundly driven by younger consumers, mainly by Millennials (Ibid).

Although the second-hand market, both C2C and B2C business models, has gained growing attention within the consumer behaviour studies (Guiot and Roux 2010; Cervellon, Carey and Harms 2012; Turunen and Leipämaa-Leskinen 2015; Amatulli et al. 2018), the vast majority of the research is still focusing on the perspective of a buyer while overlooking the significance of the seller. It is noteworthy as the consumer-to-consumer second-hand market provides an unusual opportunity for consumers to alternate between the roles of a buyer and a seller; at the same time as a consumer is representing the demand of the market, it is also responsible for the supply itself. Therefore, to obtain more knowledge about the consumer resale behaviour, it is first essential to understand the components of the C2C second-hand market and how purchasing influence selling and vice versa. Consequently, this chapter aims to provide a comprehensive outlook on the existing literature about C2C second-hand markets and highlight the decisive factors related to consumer resale behaviour.

2.2.1 Definition of second-hand luxury

Second-hand is a commodity that is pre-owned and pre-used before it reaches its new owner (Guiot and Roux 2010; Cervellon, Carey and Harms 2012; Turunen and Leipämaa-Leskinen 2015). In other words, purchasing second-hand is regarded as the acquisition of previously used goods. Guiot and Roux (2010, p. 356) propose that second-hand purchasing is not only characterised by the product features but also by its sales channel, and therefore define second- hand shopping as “the acquisition of second-hand objects through methods and places of

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exchange that are generally distinct from those for new products”. This definition is noteworthy as the perceived value of a luxury product, as well as the purchase motivations of second-hand luxury, are highly dependent on the experience of shopping activity, not only on the product attributes (Sihvonen and Turunen 2016; Amatulli et al. 2018).

Second-hand markets have lately gained increased attraction, however exchanging product ownerships between consumers is not a new phenomenon itself: contemporary second-hand markets share similar characteristics with, e.g. farmer’s markets, garage sales, flea markets and swap meets (Belk, Sherry and Wallendorf 1988). They are forms of lateral cycling in which used goods exchange the ownership in return for money or other compensation (Bardhi and Arnould 2005). These exchange between private consumers are regarded as informal channels (Belk, Sherry and Wallendorf 1988). Today, especially online platforms are claimed to be a significant driver for second-hand luxury growth (Amatulli et al. 2018), yet 70 percent of the second-hand purchases are still made in physical stores (Bain & Company 2020). Even though only a few are purchasing second-hand personal luxury online, these web-based peer-to-peer platforms have increased the awareness of such possibility (Chu and Liao 2015) – which is highly remarkable considering reselling.

These “places of exchange” (Guiot and Roux 2010, p. 356), whether online or offline, describe different types of business models operating in the second-hand market: the consumer-to- consumer (C2C) second-hand market represents the process of a consumer passing over a product’s ownership to another consumer (Paden and Stell 2005; Chu and Liao 2015). The transaction between consumers can take place either directly or through a middleman; these companies acting between the seller and buyer serve as a mediator separating those two parties.

Depending on the business model, the seller itself is able to act more independently during the reselling process and can mostly decide upon, e.g. resale price, description, selling period, and preferred buyer. Contrary to that are the business-to-consumer (B2C) second-hand business models, in which the consumer sells the product ownership to the business itself. Followed by that, the operating company acts as an active player and is responsible for the supply of the reselling process to a new consumer (C2B2C). The difference between business-to-consumer (B2C) and consumer-to-consumer (C2C) second-hand markets is that selling on a C2C-market is usually not regulated in terms of taxes or other governmental fees (Paden and Stell 2005), and therefore intended only for those who have previously acted as a consumer (Chu and Liao 2015).

These platforms built a crucial factor of the shopping experience, which is why many operating businesses have improved. New C2C marketplaces have become more professionalised and many offer their services through a consignment model such as authentication processes, shipping, or communication between seller and buyer. These service-oriented middlemen, whether online or offline, receive a fee for an actualised resale while the profit itself goes into the hands of the reselling consumer.

Further, it is crucial to draw a line between second-hand and vintage items as these words are often used parallel in everyday speech, although their definitions have slight differences.

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According to Cervellon, Carey and Harms (2012), vintage goods, unlike second-hand items, are bond to a specific time, usually to the period of 1920s to 1980s. Moreover, vintage might not be previously used even though it is always pre-owned. This can be explained by, e.g.

collecting pieces that have been owned by a connoisseur but kept in the storage in order to maintain the quality. As the production quantities in the early 20th century have been substantially smaller than in the 21st century, some consider vintage pieces also more unique and scarcer (Ibid). Although, there is a minor difference in the definition of second-hand and vintage, this study will regard vintage as part of second-hand.

Next, the question is whether a second-hand luxury item can still be considered as luxury even though it is pre-owned and pre-used? Drawing back to the definition of luxury, the essential difference between first-hand and second-hand luxury goods is the lack of exclusive service experience (Turunen and Leipämaa-Leskinen 2015). As reported by Bain & Company (2020), more than 85 percent of the total luxury purchases are still made in brick-and-mortar, which indicates that consumers are, after all, expecting to gain added value by visiting a physical store.

It is obvious that an independent second-hand reseller is not able to reach to the same service level as the original luxury brand, as it is not able to provide e.g. original packaging or full security of the authenticity of the product. However, due to the extensive counterfeit market, also second-hand actors have recognised the importance of certificates and authentication services and thus developed their services to meet the demands of luxury consumers (Boston Consulting Group and Altagamma 2019).

Few might also point out that second-hand corresponds to a lower price level (Bardhi and Arnould 2005). However, this is not always the case. Similar to vintage items, some second- hand luxury goods are more exclusive and scarcer since the accessibility is restricted or the production limited (Kapferer 2012a), and thus, the resale price can even exceed the original sales price. One example of a luxury product falling into this category is the legendary Hermès

‘Kelly’ bag. As already introduced in chapter 2.1., by limiting the availability of their products, Hermès has been able to keep up the interest of consumers and hence increase the monetary value of their products (Business of Fashion and McKinsey & Company 2020). Yet, the prices for a ‘Kelly’ bag have continued to grow even higher on the second-hand luxury market as for the first time people have been able to buy the bag without the struggle of getting on a waiting list (Ibid). Finally, prior research demonstrates that second-hand luxury products are, in fact, considered to have even higher quality and deeper meaning because of the product’s past (Turunen and Pöyry 2019). This further strengthens the argument that second-hand should be viewed as a form of luxury. Albeit the incomparable service experience, it is possible to agree with Turunen and Leipämaa-Leskinen (2015) that “the experience of luxury can be transferred from one owner to another in the second-hand markets” (p. 62), and thus, concludes that second-hand and vintage luxury goods fulfil the criteria of luxury definition.

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2.2.2 Motivations behind second-hand luxury purchasing

Consumption consists of acquisition, possession and disposition of goods (Arnould and Thompson 2005). All of these phases of consumption are linked with each other’s and hence influence one another, e.g. disposing may contribute to purchasing of new items (Turunen and Leipämaa-Leskinen 2015; Turunen and Pöyry 2019). Thus, it is essential to understand what is known about second-hand consumption and purchasing behaviour, even if studying consumer disposition and resale behaviour. Prior research in the context of second-hand consumption has largely focused on studying the underlying motives for second-hand purchasing and the second- hand consumer per se (Bardhi and Arnould 2005; Guiot and Roux 2010; Turunen and Leipämaa-Leskinen 2015; Ferraro, Sands and Brace-Govan 2016; Amatulli et al. 2018; Kessous and Valette-Florence 2019). Based on the aforementioned studies, this chapter aims to provide an understanding of why people buy second-hand luxury goods, and what drives them to act as a seller in C2C secondary markets.

For decades second-hand shopping was considered to be driven exclusively by economic benefits. Yet, recent research proves that second-hand purchasing is often motivated by both utilitarian and hedonic benefits (Bardhi and Arnould 2005; Guiot and Roux 2010), as well as by symbolic meanings (Turunen and Leipämaa-Leskinen 2015; Amatulli et al. 2018). These findings are in line with the aforementioned terminology describing three consumer motivations of luxury consumption: (1) utilitarian, (2) hedonic, and (3) social motivations (Kapferer 1998;

Vigneron and Johnson 1999; Dubois, Laurent and Czellar 2001; Vickers and Renand 2003).

In the context of second-hand, whether the purchasing is taking place on B2C or C2C markets, utilitarian motivations are contrasted with economic interests and being thrifty: “thrift is conceptualised as […] careful consumption and saving in the present in order to consume better in the future” (Bardhi and Arnould 2005, p. 227). Based on Guiot and Roux’s (2010) categorisation of second-hand shopping motivations, economic dimensions consist of (1) spending less on second-hand compared to an equivalent new item, (2) feeling of paying a fair price for what the product is considered to be worth, (3) buying more with the same budget, and (4) paying the lowest possible price, also known as bargain hunting. Although utilitarian motivations are strongly connected to monetary interests, people may still spend a lot of money on a second-hand item. However, the price is justified by the difference compared to the original price, the quality of the product, or other utility. This is particularly visible in second-hand luxury consumption, as Turunen and Pöyry (2019) disclose: “those who buy second-hand luxury products emphasise the price-quality ratio” (p. 554).

On the other hand, second-hand purchasing can also be driven by hedonic and recreational determinants, which are related to the experimental aspect of shopping (Sherry 1990; Bardhi and Arnould 2005). It is about satisfying consumers’ desires rather than actual needs (Ibid). As classified by Guiot and Roux (2010), hedonic motivations can be related to (1) the product attributes such as originality and rarity of a product, nostalgia from the past, finding a piece that appeals to the taste of the consumer, and self-expression; or to (2) the recreational aspect of sales channels, like social contact with others, stimulation of looking, and treasure hunting. In

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case of second-hand luxury, the experience of treasure hunting, both in terms of object and the experimental aspect of shopping activity, is regarded as important as saving money (Turunen and Leipämaa-Leskinen 2015; Kessous and Valette-Florence 2019; Turunen and Pöyry 2019), while in the domain of vintage luxury, hedonic benefits such as personal fulfilment, self- confidence and self-identification are shown to outweigh the monetary benefits (Amatulli et al.

2018).

Besides utilitarian and hedonic motivations of second-hand purchasing, Guiot and Roux (2010) discovered three additional dimensions, namely critical motivations, which bear a resemblance to the synonymous terminology of symbolic interactionism, e.g. social motivations (Vickers and Renand 2003). The motivations include ethical and ecological reasons, avoidance of conventional channels, and anti-ostentation motives (Guiot and Roux 2010). These critical motives cannot alone be linked to symbolic interactionism as hedonic determinants also involve symbolic meanings to a large extent. However, these dimensions address particular connection to social standing. First, second-hand shopping has gained significant popularity due to its sustainability and environmental benefits (Ibid) and hence, by purchasing second-hand products consumers are able to identify themselves with a specific reference group – also known as Bandwagon effect (Leibenstein 1950). Secondly, the research addresses that some purchase second-hand products as a countermovement to the mass production and to avoid conventional channels (Guiot and Roux 2010), which can also be regarded as a desire to belong or distinct oneself from a particular people. Thirdly, anti-ostentation is about resisting and rebelling against, e.g. the fashion system by not buying the latest trends. It emphasises individuality and breaking the social hierarchies, which can be considered as reversed Veblen effect. Lastly, a study by Ferraro, Sands and Brace-Govan (2016) demonstrates that second-hand purchasing is often driven by fashionability, which can also be regarded to be driven by the external motivations, that is to say, social interactionism. Hence, based on the aforementioned examples, it is possible to conclude that second-hand shopping is driven by utilitarian and hedonic incentives as much as social motivations.

2.2.3 Seller’s role in forming the C2C luxury second-hand market

The consumer-to-consumer second-hand market describes a rather informal, tax and government fee unregulated environment and is therefore intended only for those who have also previously acted as a consumer (Chu and Liao 2015). So, as the seller of the C2C second- hand market is expected to be engaged in purchasing prior selling, it is evident that purchasing influences selling of second-hand goods, and vice versa. That leads to an unusual and interesting circumstance in which the selection of reselling goods is dependent on the individual sellers’

purchasing preferences. This, on the other hand, signifies that in C2C markets it is up to the reseller to attract suitable buyers and to adjust the supply to meet the consumers’ needs.

Since consumers have become more aware of the possible disposal alternatives, with special regards to the opportunity to resale, the more consumers take it into consideration prior purchasing (Paden and Stell 2005; Liao and Chu 2013). Traditionally, the purchase decision-

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making process is divided into five parts: need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behaviour (Ekström, Ottosson and Parment 2017). Although reselling is a part of post-purchase behaviour, it is proven that in some cases it might influence the decision-making already before purchasing (Liao and Chu 2013; Chu and Liao 2015; Turunen and Pöyry 2019). However, that is subject to the consumer’s knowledge about which products and brands are popular at the resale market, which items are limited or exclusive and therefore attractive, which goods are long-lasting in terms of design and quality (Chu and Liao 2015), and consequently – which products can maintain or even increase their financial value over time.

Moreover, not only has the consumer expertise an impact on the decision-making but also on the overall satisfaction of the purchase itself (Chu 2013); assuming that a person would buy a product with a future resale opportunity in mind, he or she may become disappointed with the purchase if, e.g. the resale price does not live up to the expectations, or if the resale experience is somehow unpleasant. But how does a consumer determine the value of a brand on the second- hand market? According to Sihvonen and Turunen (2016), consumers base the perceived value of a fashion brand on six factors: quality, price, design, brand availability, origin and authenticity. Special attention is given to the understanding of time. For example, if the product is rare, the passing of time may increase the value of a product, whereas if the product is bond to seasonal trends, time might decrease its value. However, Sihvonen and Turunen (2016) underline that the perceived value is always subjective to the consumer and cannot be predetermined or generalised. In conclusion, the subjective understanding of the value of a product relies on the seller’s overall knowledge of the second-hand markets. That, in turn, affects the selection, pricing and availability of goods in C2C second-hand markets.

At the same time as the consumer-seller is responsible for the utilitarian aspects, in other words, which products are offered, for what price and at what time, he or she is also in charge of the purchasing experience of the buyers. That is to say, although the C2C second-hand market is extensively lead by consignment stores (Chu and Liao 2015), the original seller has still an essential role in creating the second-hand environment. As concluded in the previous chapter, hedonic motivations, such as the origin and the nostalgia of the product, are fundamental when purchasing second-hand and vintage luxury (Guiot and Roux 2010), and they might even exceed the utilitarian motifs (Amatulli et al. 2018). Similarly, the seller might associate strong meanings to the possessions which are being sold and hence be guided by the desire to sell to someone who will appreciate the history and the stories, namely the emotional value attached to the product (Roster 2001). In practice that could mean that the seller picks a person he or she trusts the most to carry the legacy, sets the price relatively high to exclude undesirable buyers, or even refuse to sell if no suitable buyer candidates are found. As a matter of fact, that type of behaviour consequently influences, besides utilitarian and hedonic aspects, also the social factors of purchasing and selling of second-hand goods; at the same time as sellers are prone to sell to people that appear reliable, also the buyers are more likely to buy from like-minded sellers and to whom they can relate to (Roster 2001). Ergo, it is also possible to claim that consumer-sellers of second-hand goods have a significant influence on building second-hand communities.

T O SELL OR NOT TO SELL