Buying while expecting to sell: The economic psychology of online resale

Consumer online resale is becoming increasingly common for transactions of secondhand goods. However, when accompanied by a preconceived intention to resell a product after using it, the initial consumer purchasing decision for self-use is complicated by the estimated resale value of that good. We applied the principles of mental accounting to develop and evaluate a new concept that may influence consumer resale and purchase intention: external resale reference price (ERRP). The study examines how online consumer sellers' economic psychology of buying affected their expectation of future online resale outcome. The results indicate that (1) consumers' awareness of future online resale potential can influence their purchasing decisions; (2) ERRP, which is mediated by the estimated resale return, can increase purchase intention; and (3) the effects of ERRP on purchase intention are moderated by online resale likelihood, but are minimal when consumers are aware that resale possibility is extremely low.     

Business at the fingertips of consumers: a scale for measuring resale motivations in online settings

Our current understanding of what motivates consumers to resell second-hand products online is limited. This article lays out the development and validation of an online resale motivation (ORM) scale based on three studies involving 1119 respondents. Study 1 presents the ORM scale development process and the resulting multidimensional construct, including the protester, economic, generative, recreational, practical and social facets of motivation. Study 2 replicates the scale and investigates its predictive value, demonstrating that the ORM scale successfully predicts online resale frequency. Study 3 examines the mediating role of ORM on the relationship between planned resale intentions and online resale behaviour. The findings show that there is no direct link between a consumer’s intention to resell an item prior to its purchase and the frequency with which they resell online. Rather, consumers who more frequently resell online items that they acquired with the intention of reselling do so because they perceive positive economic, practical and recreational outcomes associated with online reselling.     

Shopping value in online auctions: Their antecedents and outcomes

Online auctions present unique characteristics in the consumer decision-making process that raise new issues related to consumer shopping behaviors in auction-based purchases. The present research examined the relationship between consumer characteristics (i.e., compulsive buying behavior, variety-seeking tendency, and price sensitivity) and shopping value (i.e., utilitarian and hedonic) in online auctions and found that both compulsive buying behavior and variety-seeking tendency are critical factors of shopping value in the online auction environment. There were no positive relationships between price sensitivity and shopping value. The results of this study also revealed that consumers’ shopping value positively influenced their preference, which, in turn, formed behavioral intentions in online auctions. While utilitarian value was found to be a significant predictor of behavioral intentions, hedonic value was not. However, hedonic value influenced intentions indirectly through preference.     

From Fatwallet to eBay: An investigation of online deal-forums and sales promotions

Sales promotions are an important part of retail advertising strategy. Traditionally, research on sales promotions has generally assumed that the buyers are end consumers who do not engage in reselling, in large part due to high transaction costs. However, the recent Internet related technologies have dramatically lowered the cost of transferring goods between consumers, leading to relative ease of reselling activity amongst individual consumers. Little is known about the impact of this phenomenon on retailer's sales promotion strategy. In this research we investigate the reselling activity in online auctions for products that active deal seekers can obtain at deeply discounted prices from retailers. We further investigate the role of deal-forums in the resale process. Data is collected from an online deal-forum (http://www.fatwallet.com/) and eBay to test various reselling-related hypotheses. The results show that there is a significant abnormal increase in the number of newly posted auctions of a product after the deal information of this product is posted on deal-forum website. We also find that there is a significant price incentive for individuals to resell. The implications for sales promotion research and practice are discussed.     

Leveraging the co-evolution of offline and online video games: an empirical study

Considerable research has been carried out on online shopping and the implications of this purchasing format for consumers and retailers. Most of these studies have focused on consumer attitudes towards online shopping, and how these can be useful predictors of online shopping adoption. Notwithstanding these insights from adoption theory, existing research has yet to distil the most effective means of understanding consumers’ attitudes towards online video game purchases. Based on a qualitative study, our study contributes to literature on adoption theory by presenting some explanations involving online video games purchases by identifying salient perceptions of online and offline motivations and advances ideas on the facilitating role of incentives in making purchase decisions.     

An empirical analysis of online shopping adoption in Beijing,China

The Internet is a global communication medium that is increasingly being used worldwide as an innovative tool for marketing goods and services. At the end of 2010, Internet users in China reached 420 million. However, online shopping in China is not widely practiced and organisations investing in B2C online shopping need to understand the factors that affect Chinese consumers′ online buying behaviour. This research develops a theoretical research model as a framework to identify the key decision factors influencing Chinese consumers′ to shop, or not to shop online. A self-administered questionnaire was used to gather information from 435 respondents in Beijing, China. The empirical analysis identifies and ranks seven important decision factors: perceived risk, consumer resources, service quality, subjective norms, product variety, convenience, and website factors. All of these decision factors impact on Chinese consumers′ adoption of online shopping. Moreover, managerial implications and recommendations are also presented.     

Consumer Product Redistribution

Abstract

Formats for product redistribution are emerging and evolving, creating alternative channel options for consumers' disposition of unwanted possessions. These retail formats operate in both informal (e.g., garage sales) and formal (online auctions) economies. As consumers participate in redistribution channels, some retailers are confronted with new competition and the potential for declining sales. This article expands on both recycling and disposition literature by examining consumer disposition behavior and the flow of used products through various redistribution channels. Strategies are offered to address consumer disposition behaviors as well as to assist retailers in combating traditional and non-traditional competition.     

The phenomenon of purchasing second-hand products by the BOP consumers

This study explores the motivations and consequences of purchasing second-hand (SH) products by the rural and sub-urban (RSU) base of the pyramid (BOP) consumers using a qualitative phenomenological approach. This study has also examined the preferred purchase points for buying SH products by the RSU BOP consumers. Findings revealed that the RSU BOP consumers preferred their personal sources over offline and online retails while buying a SH product. The economic motivations, need for fulfilling aspirations, apathy towards cheap brands, need for social recognition, and pester power of school/college going children were found as the motivations behind the purchase of SH products by the RSU BOP consumers. This study has also identified that increasing consumption of branded SH products results in compensatory consumption, increased consumerism, and overwhelming recurring cost at the RSU BOP. This study has put forth a conceptual model leading to a comprehensive understanding of the purchase points, motivations, and consequences of SH purchase by the RSU BOP consumers. It has advanced the social comparison theory and the theory of compensatory consumption in the context of SH buying by BOP consumers. This study would fill the gap in the literature on consumer behaviour and BOP by examining such a novel issue. The practical and social implications of the study have been discussed.     

The role of fashionability in second-hand shopping motivations

Second-hand consumption has been quietly undergoing a makeover in recent years. As part of this shift, the concept of shopping for second-hand goods has been redefined. In today's retail marketplace, a mix of thrift stores, high-end stores, and online retailers are recognising the value of second-hand and hosting flea markets or launching their own vintage product collections. However, limited research attention has been paid to role of ‘fashionability’ as a motivation for consumers to shop for second-hand goods. In this study, we explore modern consumer second-hand shopping behaviour and motivations, inclusive of fashionability. Through a segmentation of second-hand store shoppers, we identify four distinct segments. While we find a polarisation of fashionability motivations, the vast majority (83%) of second-hand shoppers are driven by fashion when shopping in second-hand stores. The findings present several implications for second-hand retailers, including new ways to expand their customer base by tapping into elements of fashionability.     

Digital distribution and the prohibition of resale markets for information goods

An existing theoretical literature finds that frictionless resale markets cannot reduce profits of monopolist producers of perfectly durable goods. This paper starts by presenting logical arguments suggesting this finding does not hold for goods consumers tire of with use, implying the impact of resale is an empirical question. The empirical impact is then estimated in the market for video games, one of many markets in which producers may soon legally prevent resale by distributing their products digitally as downloads or streamed rentals. Estimation proceeds in two steps. First, demand parameters are estimated using a dynamic discrete choice model in a market with allowed resale, using data on new sales and used trade-ins. Then, using these parameter estimates, prices, profits, and consumer welfare are simulated under counterfactual environments. When resale is allowed, firms are unable to prevent their goods from selling for low prices in later periods. The ability to do so by restricting resale outright yields significant profit increases. Renting, however, does not raise profits as much due to a revenue extraction problem.     

Consumer intentions to falsify personal information online: unethical or justifiable?

ABSTRACT

Companies routinely analyse the online activities of consumers to understand shopping habits and buying patterns. As the amount of personal information available online has grown, so has the potential for its misuse. When consumers believe that their personal information is being used for an unstated purpose, they may consider the firm to be acting unethically. They may then falsify their personal information online as a reaction to apparent ethical violations by companies or as an opportunistic unethical act of their own. The purpose of the present research is to propose a framework that could be used to understand consumer intentions to falsify personal information online. The research is important from both a theoretical and business perspective. From a theoretical standpoint, they add to the literature on the dark side of marketing by examining ethically questionable behaviour by consumers. The research is relevant for firms because when consumers falsify personal information their ability to target consumers with personalised offers is diminished. The research is also relevant for policymakers as they evaluate existing regulatory safeguards intended to protect consumer information online.     

Shopping with the resale value in mind: A study on second‐hand luxury consumers

The market for second‐hand luxury products is growing and the variety of available sales channels has increased; consumers can buy second‐hand luxury goods not only from brick‐and‐mortar stores but also from a myriad of both global and local online channels. Arguably, the increase in available sales channels has changed consumers’ purchasing behaviour as the roles between sellers and buyers are alternating as one can act as a buyer one day and a seller the next. However, prior research on luxury consumption has mainly focused on brand‐new luxury goods, largely neglecting the consumption of previously‐used luxury products and has not accounted for the multi‐channel shopping environment. The purpose of this paper is to understand how consumers mentally approach the purchase of second‐hand luxury products and what kinds of decision‐making styles they use. The empirical interview data of 22 consumers was analysed by the means of shopping style dimensions that account for both consumer characteristics and external shopping conditions. The interviewees were members of a Facebook buy and sell ‐group focused on luxury products and had recently bought a second‐hand luxury product. All the existing dimensions were evident in the data but an additional dimension was also identified: resale value consciousness. The new dimension emphasizes an investment‐led and price‐quality conscious shopping style but was also found to relate to impulse buying and brand consciousness. The emergence of the dimension is argued to be due to the increase in viable online sales channels for second‐hand luxury products.     

Investigating social motivations,opportunity and ability to participate in communities of virtual co‐creation

Communities of virtual co‐creation are emerging as a new form of consumer engagement, where through a collaborative and interactive process, ideas and knowledge from consumer are applied differently to create new value for the consumers themselves, the company and all stakeholders. The aim of this paper is to explore the drivers, namely motivation, opportunity and ability, of consumer willingness to participate in communities of virtual co‐creation. The role of social motivations, that is, altruism and social reputation, particularly relevant inside online communities, is investigated. Data were collected through an online survey on 180 consumers from diverse nationalities. The unit of analysis was a virtual co‐creation activity for food products. Findings show that consumer motivation and ability have a relevant influence on willingness to participate in co‐creation projects, while opportunity has not. In particular, ability showed to be the most relevant factor, suggesting that virtual co‐creation initiatives should be properly designed to facilitate the engagement of consumers. Further, results indicate that consumers' motivations are driven by both altruism and social reputation, where altruism plays a greater role. This confirms that social relations are key motivational drivers in virtual communities, where value is created through interaction with like‐minded people, exchange of information and experiences, provision of support.     

Product classifications,consumer characteristics,and patronage preference for online auction

An important unanswered question in the area of Internet auctions is what dynamics influences consumer preferences for shopping on these online auctions. Two key aspects of studying what sells on the Internet auctions are (a) the characteristics of products to be purchased and (b) consumer characteristics. This research focuses on the relationship between product purchase preference, prior experience, and socioeconomic characteristics for the online auction participants. It uses product classification theory rooted in information economics and marketing. The study results are based on a US national sample of online auction participants. The findings suggest that product class affects online auction patronage, yet socioeconomic characteristics may not be as influential as once perceived. The online merchants can benefit from the inquiry to improve auctions for search, experience, and credence goods. The five key contributions of the findings add value to the theory and practice of consumer behavior.     

Experts and Amateurs: The Role of Experience in Internet Auctions

The use of auctions as a pricing mechanism has grown dramatically over the last few years. The introduction of electronic auctions has significantly widened the pool of consumers who participate in auctions and increased the number of companies attempting to sell their products in an auction format. Previous empirical research on auctions has focused almost exclusively on the behavior of professional bidders in high stakes common value auctions or the behavior of students in laboratory experiments. We collect data on a large number of electronic auctions, across four product categories, to explore the behavior of consumers bidding in a real marketplace. In particular, we focus on the role experience plays in their bidding behavior to uncover whether consumer learning drives the bidding process towards outcomes described in the theoretical literature on auctions. We find that experience does indeed lead to behavior which is more consistent with theory although the proportion of experienced bidders who behave in a manner inconsistent with theory remains quite large.     

Offline and Online Search in Used Durables Markets

This study examines how different information sources are used by consumers prior to their purchase of used durable goods, specifically used cars. We examine how online and offline search are related. Categories of online sources are dealer websites and resale websites, and of offline sources are print media and dealer visits. Prior research on new car purchases finds that online sources substitute for traditional, offline sources such as dealer visits. We examine whether this theory extends to used-car purchases and distinguish between dealer websites and resale websites (a distinction relevant to used-goods markets) by collecting data from a sample of used-car buyers. Because search in different sources can be interrelated, and due to data censoring, we build and estimate a simultaneous equations Tobit model. In contrast to existing research, we find that online search on dealer websites is complementary to and not a substitute for dealer visits. This complementary effect highlights the importance of dealers’ web presence in used markets.     

Financial service providers: Does it matter if banks don't behave ethically?

The ethical consumer literature predominantly concentrates on fast‐moving consuming goods and thus, neglects insights to consumer behaviour within ethical services. As the financial services sector continues to grow in the UK, this paper addresses this anomaly by providing further insight into consumers and their ethical banking practices. More specifically, it examines their motivations as well as the trade‐offs and barriers which prevent greater uptake. Using a combination of in‐depth interviews and projective techniques, the research draws on Freestone and McGoldrick's model to reveal a lack of awareness towards ethical financial service providers and sheds light on various perceptions regarding what constitutes an ethical financial service. Additionally, numerous underlying personal benefits of ethical financial services became apparent alongside consumer expectations of customer care. In conclusion, our findings help to create a revised model which identifies more precisely the stages of ethical awareness, motivation and behaviour of ethical consumers both in the context of ethical financial services but also ethical consumption practices in general.     

Why do people buy organic food? The moderating role of environmental concerns and trust

Although consumer interest in organic food has risen over time, resulting in a generally positive attitude toward these organic food products, scholarly research suggests a comparatively low volume of its consumption in the market. This has resulted in an urgent need to study the motivations which enhance consumers’ proclivity to purchase food items produced organically. The current research attempts to understand potential associations between motivations (intrinsic and extrinsic), attitude, and buying behaviour towards organic food. Self-determination theory (SDT) was applied to develop a theoretically grounded framework which was evaluated with 378 organic food consumers. The hypotheses were tested by analyzing the data through structural equation modelling (SEM), wherein environmental concerns and trust were the moderating variables. The study results demonstrate the significant influence of intrinsic motivation, integrated and external regulation on consumer attitude, and buying behaviour. But, attitude had no significant association with buying behaviour. The findings indicate consumers’ motivation may be stimulated to encourage higher frequencies of purchasing organic food by emphasizing values that reflect motivations arising from ethical or green consumerism, health, and social benefits. Furthermore, policymakers should focus on avenues to integrate organic food as permanent parts of individual lives and a socially exalting behavioral action.     

Online consumer shopping behaviour: A review and research agenda

Over the last two decades, motivated by the continuous evolution of the technology-driven retail environment, researchers have studied various aspects of online consumer behaviour. This article attempts to take stock of this environment to critically assess the research gaps in the domain and provide future research directions. Applying a well-grounded systematic methodology following the TCCM (theory, context, characteristics and methodology) framework, 197 online consumer shopping behaviour articles were reviewed. The findings reveal that the application of theories remains limited in the current pool of literature that focuses more on developed nations. While studies have primarily considered categories such as apparel and grocery, in terms of methodology experimental and survey-based studies were most common. Additionally, the article suggests some future research directions. The use of combined theories to better understand technology acceptance by consumers of online-shopping is recommended. Similarly, studies across other categories like online experiential luxury, luxury services, or second-hand products that then link to novel constructs reflecting issues with payment methods, online service quality, and online store atmosphere are portrayed as meaningful avenues that will advance research in the domain.     

The Influence of Seller,Auctioneer, and Bidder Factors on Trust in Online Auctions

A growing body of research promotes the importance of trust in the business-to-consumer e-commerce environment. However, there has been little research on consumer trust in the new frontier of consumer-to-consumer (C2C) online auctions. The current study investigates the factors that influence bidders’ trust in online auctions from seller (trust arguments), bidder (disposition to trust), and auctioneer (structural assurance and perceived Web risk) perspectives in order to provide a more comprehensive understanding of trust in the C2C environment. Laboratory experiments (manipulating the trust arguments in “about me” page) and online questionnaire surveys (measuring the subjects’ responses regarding structural assurance, perceived risk, disposition to trust, trust, and purchase intention) were conducted to collect necessary data. The results suggest that benevolent sellers significantly influence the trust of bidders. Analysis also finds that structural assurance is the most influential predictor of trust, which significantly influences a buyer's intention to purchase. In addition, disposition to trust is a significant predictor of trusting belief, whereas perceived Web risk does not predict purchase intention.