Leveraging visual cues and pricing strategies: An empirical investigation of the pre-owned luxury market

ABSTRACT

Previously less notable behind the primary market, the pre-owned luxury market has grown rapidly during the past five years as luxury resale has become a new normal. This market presents some new challenges that do not apply to the traditional luxury market, yet limited research explores it. This paper fills this gap by investigating information disclosure and pricing effects in pre-owned luxury product promotion in the digital market. Analysis of a unique dataset from a leading luxury resale online platform suggests that providing more information through visual cues reduces information asymmetry and facilitates transactions, but the effect is moderated if pre-owned products are in newer conditions. High prices also have an overall negative effect on sales, but the effect is moderated among newer products because they provide higher price-prestige value. Managerial implications to sellers and the platform are discussed.

KEYWORDS:

• Pre-owned luxury market
• information disclosure
• visual cues effect
• the price effect
• secondary data set

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Different from other measures, DV duration related negatively to product attractiveness. Thus, the longer the duration, the less attractive the product. A negative/positive coefficient suggests that the IV correlated positively/negatively with the product promotion outcome.