Consumer Participation in Online Second-Hand Transactions

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This entry is adapted from the peer-reviewed paper 10.3390/su14074318

Consumer participation in second-hand transactions is increasing, facilitated by digital platforms in the form of apps or websites. The use of online platforms to buy or rent second-hand goods is more likely when being male, relatively young, with children, a frequent internet user, with employment and living in a household with some price-consciousness and environmental awareness. The scarcity of brick-and-mortar stores in the area and car ownership can also increase demand for used goods through online platforms.

second-hand shopping P2P consumption

1. Economic Variables

Research on collaborative consumption (CC) points to the relevance of economic factors in explaining why individuals engage in this form of consumption ^[1], especially the aim of saving money ^[2] associated to price-consciousness ^[3]. Specific research of second-hand transactions finds that it is driven by practical reasons (chore shopping) rather than by recreational considerations (pleasure shopping). Consumers value the availability of branded goods at a low price, trying to get the best quality/price ratio or other relative advantages. The perceived bargaining power could be a differential factor vis-à-vis online first-hand shopping. While e-commerce is dominated by big retailers, second-hand is mostly P2P and buyers feel they have more room to get better prices. In fact, the development of digital platforms to buy/sell goods may have attracted especially the most economically-driven, because of the swiftness to complete transactions, the wider range of opportunities to get a best deal and the easier comparability of prices. Actually, consumers with price-awareness have smaller odds of participating in second-hand online transactions.

Income is another economic factor worth mentioning. Even if counter-intuitive, income could increase the use of second-hand online platforms, since those could attract wealthy consumers, in the form of materialistic and indulgent consumption ^[4]. The researchers obtain results that confirm the hypothesis that low-earner groups (students, unemployed, non-employed) are less likely to engage in online second-hand markets.

2. Situational Variables

Situational factors include aspects like physical surroundings, temporal perspectives, or antecedent states ^[5]^[6].

For instance, if the number of retail stores in the geographic area is low, stores would be more expensive and less accessible, leading consumers to turn to online second-hand markets. The researchers' results back this hypothesis.

At the same time, owning a car may increase the use of second-hand platforms, since (even if consumers’ browsing and negotiation of prices takes place online) closing the transaction generally entails an actual face-to-face meeting where the potential buyer can actually check the state of the good and consumers actually tend to pay in cash when meeting ^[7]. The researchers' results also confirm this effect.

3. Individual Characteristics

Age is a socio-demographic factor worth mentioning. Although the effect of age is bound to depend on the goods purchased, the researchers presume that generally the elderly will be less likely to engage in online second-hand markets. They can trust less (or stigmatize more) the idea of buying second-hand goods from unknowns through webs/apps. The researchers' results confirm that the participation in online second-hand markets decreases for senior citizens.

Regarding gender, some surveys on the use of sharing economy in Spain have obtained that being a female is likely to increase participation ^[8], although these authors caution that this merits further research. In the case, being a male increases participation.

Another factor to consider is the fact of having children because of the transitory need for special items ^[9]. Some children goods are relatively expensive and durable, and second-hand marketplaces offer an opportunity to buy these products (and resell them after some years too). This, coupled with parents’ lack of time and the fact that product browsing can be done from home at any time of the day ^[10], can explain why having children may increase participation in online second-hand goods ^[11]^[12]^[13], even if hygiene and safety concerns could be a refraining factor for parents ^[13]. The results confirm that having children increases the use of second-hand platforms.

Regarding the impact of the level of studies and skills, the researchers focus specifically on skills related to internet tools, using as a proxy the frequency of use. Skilled and frequent internet users have more confidence in second-hand platforms and are more likely to value the convenience and/or the quality of an app/website vis-à-vis face-to-face shopping. Consumers who are not comfortable with online tools will tend to prefer personal sources to exchange second-hand goods, while frequent and experienced internet users are more likely to participate in online second-hand shopping. Spending time online increases the likelihood of buying used products through online platforms. Finally, environmental concerns are a driver of participation in different forms of the sharing economy. In the same vein, altruistic factors and the contribution to collective goods can be a motivation for engaging in second-hand transactions ^[14]^[15]. In this regard, individuals’ environmental awareness (proxied by individuals pertaining to households with solar panels) encourages the use of second-hand online platforms.

4. Conclusions

Factors behind participation in second-hand online platforms have relevant implications both for retailers and policy-makers.

As far as retailers are concerned, even if some (situational and socio-demographic) factors are beyond their control, they must be aware of this phenomenon and adapt to it. According to the research, participants in online second-hand platforms are an attractive niche (in terms of willingness/ability to pay): full-time job, with children and car, eco-friendly, and spending time on the internet (although it is fair to say that these consumers are also cost-aware). Moreover, it seems that, consumer participation in online second-hand markets is driven by structural factors (e.g., price awareness, income, environmental awareness, internet skills) which do not change abruptly. Therefore, on the practical side, retailers can try to target this niche in order not to lose business opportunities.

As far as policy-makers are concerned, they must consider the impact of this phenomenon on economic, environmental, and social sustainability. On the positive side, this phenomenon may be attracting environmentally aware consumers. It allows the satisfaction of (temporary) needs in a circular economy, increasing economic and environmental efficiency. Besides, this phenomenon facilitates consumption smoothing for families with children, pointing to positive social derivatives too. But this phenomenon comprises especially well-off consumers (with full-time jobs) and who are relatively internet-literate. Therefore, if buying/renting goods through these online platforms allows costs savings, the fact that low-income consumers are not so active in these platforms undermines the contribution of this phenomenon to economic and social sustainability (pointing to more evidence of digital divide). In addition, the participation of relatively well-off consumers could indicate some traces of materialistic consumption (in apparel, children and sport equipment, video-games, collection items, etc.), pointing to a not-so-positive dimension in terms of economic, social, and environmental sustainability.

References

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