Factors Influencing Consumer Initiation of Secondhand Markets



Citation:

M. Rucker, K. McGee, and B. Alves (1995) ,"Factors Influencing Consumer Initiation of Secondhand Markets", in E - European Advances in Consumer Research Volume 2, eds. Flemming Hansen, Provo, UT : Association for Consumer Research, Pages: 425-429.

European Advances in Consumer Research Volume 2, 1995      Pages 425-429

FACTORS INFLUENCING CONSUMER INITIATION OF SECONDHAND MARKETS

M. Rucker, University of California

K. McGee, University of California

B. Alves, University of California

M. Hopkins, University of California

T. Sypolt, University of California

M. Watada, University of California

Despite economic, social and environmental benefits that can be derived from encouraging consumer initiation of second order markets, little research has been directed toward this issue. In the present study, personal sale sponsors and a matched set of nonsponsors were questioned to determine what motivated sponsorship of personal sales and variables distinguishing sponsors from nonsponsors. Findings suggest several ways in which personal sales might be encouraged. These include publicizing the potential for economic gain and providing a clearinghouse for potential individual sponsors who want to join with others to increase benefits and reduce costs of involvement in the secondhand marketing system.

The need for encouragement of recycling and development of secondhand or second-order marketing systems has received increasing attention in recent years. Concern about depletion of natural resources and proliferation of solid waste have been partially responsible for the heightened interest in recycling. Reports such as those by Forester (1988) and Richardson and Havlicek (1974, 1978) suggest that the average U.S. household generates about 40 pounds of solid waste per week; when multiplied by number of households, this totaled an estimated 200 million tons for 1990. Richardson and Havlicek calculated that over 50 percent of this waste load could be salvaged for some type of reuse.

Depressed economic conditions and changing societal values have added impetus to the interest in second-order markets. As noted by Darnton and Springen (1991), Gubernick (1993), Dreyfus (1980) and Courtless (1982) among others, the stigma attached to secondhand items such as used clothing has been disappearing; consumers have developed a greater appreciation for the value of well-made older products. According to Manning (1993), secondhand markets in the U.S. have also benefitted from the drop-out culture's adoption of cast off commodities as an expression of lifestyle. According to a recent article in The Economist (Second-hand Trade, 1993), second-hand markets have also been booming in the U.K. Demand has increased as a function of domestic concern for less expensive goods as well as devaluation of the pound which encouraged the return of foreign dealers. Similar reports of the popularity of second-hand markets have come from other countries in Europe and the rest of the world (cf Scitovsky, 1994).

Although the benefits to be derived from reuse of products are obvious and compelling, obtaining consumer cooperation in initiating this reverse distribution process has proved to be difficult. Early work by Zikmund and Stanton (1971) noted that financial incentives were generally not sufficiently high to compensate for the effort involved in initiating the recycling process. Geller, Winett and Everett (1982) also observed a relationship between financial incentives and recycling and the failure of recycling plans when such incentives were withdrawn.

Unfortunately as Oskamp et al (1991) pointed out, given the average market value of recycled products, it may or may not be feasible for a given recycling program to make participation financially worthwhile. To increase the reuse of products, it is necessary to examine monetary and nonmonetary incentives and barriers to recycling, and weigh the advantages and disadvantages of alternative systems from the point of view of the initiators as well as the consumers. As Hanson (1980) and Richardson (1992) have indicated, we must find out how and why people dispose of products and what factors affect disposition decisions in order to reduce problems of environmental pollution. In spite of the call for this type of research, only a limited number of studies on disposition behavior are currently available. Furthermore, most of what research is available has focused on recycling to the exclusion of other types of disposition decisions.

Disposition of items through personal sales would seem to deserve special attention here since both the original and secondary owners may derive substantial economic benefit from the transfer of goods. Furthermore, as Hutchins and Hawes (1982) have noted, the useful life of items is extended by passing them on from the first owner to another person who finds them more desirable, without the necessity of expending time and effort collecting, transporting, and reprocessing the items for subsequent use. As observed by Herrmann (1991), there are also social benefits that accrue from personal sales of used commodities. Both sale sponsors and shoppers often work together and thereby strengthen social networks. She also noted that "The very act of selling used goods, along with their history, at very low prices fosters a generalized sense of community." However, the consumer who initiates this type of second-order marketing must expend more personal effort than the one who chooses an alternate method of disposal such as donation to charity or discard. Preparation before the sale may include sorting, cleaning and pricing items. After the sale, additional effort must be directed toward finding other ways to dispose of the items that did not sell.

Several previous studies have considered sale of used items as a method of disposing of unwanted items but these are limited by being largely descriptive and/or combining sale decisions with other types of disposition decisions in inferential analyses. However, some of the findings are relevant to the objectives of the present study and will be reviewed below.

At least two studies suggest that garage sales are a popular form of second-order marketing among consumers. In a study of households in a small western city (O'Reilly, Rucker, Hughes, Gorang and Hand, 1984), slightly over one-half of the respondents reported attending a garage sale during the previous 12 months. Similarly, in a survey of households in the metropolitan area of a major midwestern city, Healy and Dovel (1975) found that sixty-one percent of their respondents had attended at least one garage sale.

In a subsequent study of garage sale customers and sponsors, Dovel and Healy (1977) found that reasons given for holding a sale, in decreasing order of frequency, were the following: to reduce the clutter, to obtain extra money, for fun, because of a move, to meet interesting people, and to fight inflation. Whether or not the sale was a financial success was the primary determinant of a sponsor's satisfaction with the sale. In terms of merchandise offered, a little over 50 percent of the sponsors stated that the sale included merchandise from friends. As for assistance in conducting the sale, close to 40 percent said they had help from relatives and a similar percentage reported having help from neighbors; almost 30 percent stated that friends provided assistance.

Winakor and Martin (1963) limited their research to sales of used clothing and collected data from sale sponsors on the operation and procedure of these sales. With respect to motivation for holding such sales, they report that, in general, organizations were concerned with making money whereas individual sponsors held sales to dispose of the clothing they no longer needed.

Jacoby, Berning and Dietvorst (1977) collected disposition decision information on six test products. Based on responses to their interviews, they developed three categories of factors influencing disposition choice: psychological characteristics of the decision maker, factors intrinsic to the product, and situational factors extrinsic to the product. However, as they note in their discussion, the exploratory nature of their research prevented them from conducting any formal tests of hypotheses.

Burke, Conn, and Lutz (1978) used both psychographic and demographic variables to distinguish among various disposal decisions. However, for purposes of analysis, they collapsed disposition choice data into a four-group taxonomy and a two-group taxonomy such that it is not possible to recover data on personal sales alone.

More recent studies of secondhand markets in consumer products include the work of Richardson and his students (Richardson, 1992). The emphasis here was on garage sales and flea markets although some data were collected on other types of secondhand markets as well. Unfortunately, ability to interpret the findings is limited by the methodology, as Richardson himself cautioned; all of the interviews were obtained by students working for class credit and therefore findings were affected "by whatever convenience criteria were used to select respondents by a select group of interviewers." In addition, Herrmann (1990, 1991, 1993), Herrmann and Soiffer (1984) and Soiffer and Herrmann (1987) have written a series of manuscripts based on ethnographic research on the garage sale. In this work, the focus has been on participation of women in the institution of the garage sale and the relationships between ideologies, practices and creating community as well as the concept of generalized reciprocity or (re)distribution of goods to where they are most needed. As the title of one paper (Herrmann and Soiffer, 1984) makes explicit, personal sales should be understood in terms of fun and profit. Sherry (1990) reinforced this point with his general marketplace framework that represented structure in terms of the formal-informal dialectic and function by the economic-festive dialectic. Garage sales were placed toward the economic end of the functional dimension but Sherry stressed the importance of not taking economic/festive as an either/or conceptualization.

Scitovsky (1994) provided some theoretical insights regarding secondhand markets but he did so from a macroeconomic perspective. His primary concern was the destabilizing effect of second-order markets on the overall economy. Nevertheless, he made several points that have relevance for understanding the motives and behaviors of individual buyers and sellers in such markets. For example, he noted that most people enjoy accumulating attractive items, with part of the attraction often stemming from the potential for resale. In other words, secondhand markets both depend on and facilitate willingness to hoard and unhoard possessions. Another point was that selling possessions adds to sellers' liquidity (one time increase in holdings of cash) rather than income. This distinction is important because while a rise in income is associated with a rise in spending, the effect of an increase in liquidity is thought to depend on other variables such as overall economic status.

Review of the papers cited above suggested that additional research was needed on what types of people were willing to initiate item reuse through personal sales and what factors prompted them to conduct the sales. Therefore, the following objectives were developed for the present study: (1) to replicate and extend the investigation of factors prompting the initiation of reuse of items through personal sales and (2) to determine those variables which distinguish between those who are willing to sponsor personal sales and those who are not.

METHODOLOGY

Respondents were selected from a small city in northern California. A sample of 50 sale sponsors was drawn from advertisements appearing in the local newspaper. A sample of 50 nonsponsors was drawn by using a published list of residents by address to match nonsponsors with sponsors in terms of location within the community. Sponsors were interviewed before their sales regarding factors prompting the sales. They were questioned about their main reason for holding the sale and supplementary reasons as well. Additional questions about previous experiences with garage sales and marketing strategies planned for the upcoming sale were also included in the interviews. However, these items are not related to the objectives of the present study and therefore are not presented here. After each sale, the sponsor of that sale was asked to complete a questionnaire which included attitude items related to disposition decisions and demographic information. The attitude items were drawn from other researchers' papers on garage sale shoppers and product disposition behaviors (Burke et al., 1978; Healy and Dovel, 1975) as well as discussions with sponsors that occurred during the first author's own research on garage sale shoppers (O'Reilly et al., 1984). The demographic variables included age, marital status, occupation of the main wage earner in the household, and household income. Each nonsponsor was mailed a questionnaire which included the same attitude and demographic items.

RESULTS AND DISCUSSION

Frequency data based on sponsors' responses to questions about their sales are presented in Table 1 and Table 2. A stepwise discriminant analysis of sponsor and nonsponsor responses to the attitudinal and demographic items is presented in Table 3.

As can be seen in Table 1, the most common reason given for initiating personal sales is to dispose of unwanted items in order to clean up the house. This finding is consistent with the data reported by Dovel and Healy (1977) that the most important reason for holding garage sales is to "get rid of the clutter" and the conclusion by Winakor and Martin (1963) that individual sponsors of used clothing sales are primarily interested in disposing of clothing they no longer need. Taken by itself, this confirmatory finding may be relatively uninteresting. However, taken together with the attitudinal data in Table 3, it suggests what may be a crucial constellation of traits that make one prone to be a sale sponsor. Sponsors, compared to nonsponsors, tend to be "pack rats" who allow goods to accumulate until need for space prompts an alternative action. Willingness to stockpile goods on a temporary basis appears to be an important distinguishing characteristic of sponsors because of the need to achieve a critical mass of items before a sale is warranted. In addition, sponsors were somewhat less likely to agree with the statement that you never know when you will need something you have just gotten rid of. This difference suggests that sponsors would be more likely to offer items for sale than to maintain them indefinitely in inactive storage "just in case" a need for them should arise. These findings support the proposition by Scitovsky (1994) that an active second-order market depends on willingness to hoard up to a point and then unhoard.

TABLE 1

REASONS FOR INITIATING A PERSONAL SALE

TABLE 2

MEASURES OF SATISFACTION WITH MOST RECENT SALE

Furthermore, sponsors were more likely to agree with the statement that it takes too long to get a product repaired. This finding suggests the possibility that some of the items allocated to sales may be unusable in their present condition and rather than take the time to repair them, sponsors hope to pass them on to others who are more willing to take on this task. There was some support for this supposition in the interview data; sponsors did report offering items in need of repair "as is."

As indicated in Table 1, desire for extra income is another major factor prompting personal sales. Again, this finding is consistent with the results of the study by Dovel and Healy (1977) and Sherry's (1990) placement of garage sales toward the economic end of the functional dimension in his marketplace framework. However, it should be pointed out that this finding apparently does not reflect frequent initiation of sales by low income people to cover necessary expenses. The demographic data suggest that sales are less likely to be sponsored by those who are relatively downscale in terms of income and occupational status. Lower income people undoubtedly use a given item through a longer period of the product's life such that disposal may not be considered until such time when the item is unacceptable for use by anyone. This hypothesis receives some support from the data collected by Richardson and Havlicek (1978). These investigators found that more clothing is discarded in the trash as income decreases. They suggested that higher income people may have more products in suitable condition for alternative disposal options such as donations to charity.

In addition, approximately 40 percent of the sponsors specifically indicated that money generated by their sales was intended to fund special activities such as travel and entertainment. For many sponsors, then, money from garage sales may be viewed as a windfall to support luxuries that could not be justified otherwise. This finding suggests, as implied by Scitovsky (1994), that the allocation of liquid assets produced by secondhand market sales should receive additional attention in future studies.

As shown in Table 2, the majority of sponsors reported being satisfied with their sales overall and feeling that the money they made was worth the effort they put into their sales. Satisfaction was further reflected in the high proportion of sponsors who expressed the intention to hold another garage sale in the future. When dissatisfaction was expressed, it tended to be associated with relatively low income from the sale.

Items about sale activities as individual or group efforts were also included in the questionnaires. Responses to these questions suggested that, more often than not, garage sales are cooperative activities. Sixty percent of the sample reported including items from other households in their sales and sixty-two percent reported having the assistance of others in conducting the sale. Cooperation appears to be prompted, at least in part, by the desire to have sufficient merchandise to hold a "good" sale. These findings also support Herrmann's (1991) proposition that an important social function of garage sales is to generate or strengthen social bonds. In addition, they suggest that one method of encouraging personal sales might be to have a clearing house for potential sponsors who would like to join with others for a more sociable and profitable as well as less labor intensive multiple-household sale.

TABLE 3

STEPWISE DISCRIMINANT ANALYSIS TO DIFFERENTIATE BETWEEN GARAGE SALE SPONSORS AND NONSPONSORS

The stepwise discriminant analysis presented in Table 3 indicates that several attitudinal variables in addition to those already discussed are important in distinguishing between sale sponsors and nonsponsors. For example, the ANOVAs indicate that sponsors are more likely to perceive garage sales as "fun" and that the money made from a garage sale is worth the effort involved in holding one. In addition, sponsors are less likely to be concerned about having other people inspect their possessions. The first of these variables, perceiving garage sales to be fun, also added significant information to the multivariate equation. As noted previously, both Dovel and Healy (1977) and the present researchers found entertainment to be one of the reasons sponsors give for holding sales. When monetary outcomes are relatively low, this type of supplementary justification may be needed to impel people to hold a sale rather than select an easier disposition option.

As for demographic variables, it should be noted that knowledge of organizations that collect secondhand clothing added significant information to the multivariate equation. This finding suggests that one is more apt to be a sale sponsor if one is less familiar with other options for disposing of usable items.

The jackknifed classification matrix calculated for the data indicated the ability of the discriminant equation to correctly classify respondents as either sponsors or nonsponsors. Approximately 82 percent of the classifications were correct for the group as a whole with 84 percent for sponsors and 80 percent for nonsponsors. These values indicate that the equation provides a substantially better classification than one would expect by chance alone.

IMPLICATIONS

The results suggest that consumer initiation of second-order marketing through personal sales might be fostered by publicizing the potential for economic gain, especially for discretionary expenses such as travel and entertainment. There also appears to be a need to reduce concerns about the invasion of privacy associated with having other people inspect one's possessions. Taking guidance from Herrmann's work (1991) perhaps efforts here could be directed toward emphasizing the positive aspects of transferring one's unwanted items to other people who would appreciate and use them. With respect to continuing involvement of current sponsors, sustained interest could be encouraged by providing advice on strategies that increase the salability of secondhand products.

REFERENCES

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----------------------------------------

Authors

M. Rucker, University of California
K. McGee, University of California
B. Alves, University of California



Volume

E - European Advances in Consumer Research Volume 2 | 1995



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