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"Understanding Second-Hand Retailing: a Resource Based Perspective of Best Practices Leading to Business Success" (2013)

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Iowa State University Capstones, Theses and Graduate Theses and Dissertations Dissertations 2013 Understanding second-hand retailing: A resource based perspective of best practices leading to business success Jinhee Han Iowa State University Follow this and additional works at: https://lib.dr.iastate.edu/etd Part of the Art and Materials Conservation Commons, Business Administration, Management, and Operations Commons, and the Sustainability Commons Recommended Citation Han, Jinhee, "Understanding second-hand retailing: A resource based perspective of best practices leading to business success" (2013). Graduate Theses and Dissertations. 13636. https://lib.dr.iastate.edu/etd/13636 This Thesis is brought to you for free and open access by the Iowa State University Capstones, Theses and Dissertations at Iowa State University Digital Repository. It has been accepted for inclusion in Graduate Theses and Dissertations by an authorized administrator of Iowa State University Digital Repository. For more information, please contact [email protected]. Understanding second-hand retailing: A resource based perspective of best practices leading to business success by Jinhee Han A thesis submitted to the graduate faculty in partial fulfillment of the requirements for the degree of MASTER OF SCIENCE Major: Apparel, Merchandising, and Design Program of Study Committee: Linda S. Niehm, Major Professor Te-Lin Chung Deanne Brocato Iowa State University Ames, Iowa 2013 Copyright Jinhee Han, 2013. All right reserved. ii TABLE OF CONTENTS LIST OF TABLES..…………………………………………………….………………... v LIST OF FIGURES……………………………………………………………………… vi ACKNOWLEDGMENTS……………………………………………………………… vii ABSTRACT……………………………………………………………………………… viii CHAPTER ONE: INTRODUCTION 1.1 Background …………………………………………………….…………… 1 1.2 Significance of Study ……………………………………………………….. 4 1.3 Objective of Study…………………………………………………………… 5 1.4 Definitions of Terms………………………………………………………… 6 CHAPTER TWO: REVIEW OF LITERATURE 2.1 Introduction …………………………………………………….…………… 7 2.2 History of Second-hand Trades ……………………………………………... 7 Pre-Industrial Revolution Period (c. 1400~1700)………………………… 7 Industrial Revolution Period (c. 1700~1850) …………………………..… 9 Post-Industrial Revolution Period (c. 1850~present)……………………... 10 2.3 Motivations of Second-hand Consumption………………………………….. 11 Economical Motivations…………………………………………………... 12 Third-world countries: Final destination of second-hand clothes…... 12 Economic advantages of frugal shoppers: Alternatives to new clothes……………………………………………………………….. 13 Motivations of Ethical Consumerism…………………………………… 14 Hedonic and Recreational Shopping Motivations……………………….. 15 Nostalgia ……………………………………………………………. 15 Need for uniqueness………………………………………………… 16 Treasure hunting…………………………………………………….. 16 Social interaction……………………………………………………. 17 Motivations to Follow Fashion Trends……….….……………….………. 18 2.4 Types of Second-Hand Retailers….…………………………………………. 19 Vintage, Consignment, and Thrift shops…………………………….…… 19 Vintage shop/boutiques……………………………………………... 19 Consignment shops………………………………………………….. 20 Thrift shops………………………………………………………….. 21 Informal Trade throughout Non-Store Retailers……………………….…. 21 Swap meets and flea markets……………………………………….. 22 Car-boot sales…………………………..………………………….. 22 Online auction sites………………..………………………………. 22 2.5 Theoretical Frameworks……………………………………………………... 23 Resourced-Based View (RBV) ………………………………..…………. 23 Firm resources………………………………………………………. 24 iii Sustained competitive advantage…………………………………… 25 Four Experiential Realms (4Es) ………………………………………….. 27 2.6 Research Questions…………………………………………………………... 30 CHAPTER THREE: METHODS 3.1 Introduction …………………………………………………….…………… 31 3.2 Sample and Data collection …………………………………………………. 31 Sample…………………………………………………………………… 31 Data Collection…………………………………………….…….............. 32 3.3 Data Analysis………………………………………………………………... 33 CHAPTER FOUR: RESULTS 4.1 Introduction………………………………………………………...………... 36 4.2 Profiles of Second-Hand Retailers………………….……………………….. 36 4.3 Findings from Interviews with Business Owners-Managers……...………… 37 Business Backgrounds and Motivations……………………………….… 39 Motivations of vintage store owners………………………………... 39 Motivations of consignment store owners………………………….. 40 Motivations of thrift store founders………………………………… 40 Resources Generated for Second-Hand Retail Businesses……..…….…. 41 Physical capital resources…………………………………………... 42 Organizational capital resources……………………………………. 43 Maintaining relationships with business counselors…………... 43 Supporting community and business partnerships…………….. 44 Use of retail technology………………………………………... 45 Use of alternative retail channels………………………………. 45 Sourcing plans..………………………………………………... 46 Human capital resources……………………………………………. 51 Sustained competitive advantages………………………………...... 52 Marketing and Management Plans…………………..………………..…. 54 Product strategy……………………………………………………... 54 Inventory turnover……………………………………………... 55 Price strategy………………………………………………………... 56 Pricing items affordably……………………………………….. 56 Pricing items individually……………………………………… 56 Promotional strategy………………………………………………... 57 Markdowns…………………………………………………….. 57 Advertisements……………………………………………...... 59 Customer relationships/interactions………………………………… 61 Customer profiles…………………………..………………….. 61 Customer shopping behaviors………………..………………... 62 Customer services……………………………………………… 62 Experiential realms (4Es)……………………………………… 64 Definition of Vintage, Consignment, and Thrift Stores…………………. 68 CHAPTER FIVE: DISCUSSION AND CONCLUSIONS 5.1 Introduction………………………………………………………………...... 71 iv 5.2 Business Backgrounds and Motivations……………………….…………….. 72 5.3 A Typology of Second-Hand Retailers……………………………………… 73 5.4 Resources Generated for Second-Hand Retailer Business…………………... 76 Physical Capital Resources………………………………………….…… 77 Organizational Capital 78 Resources………………………………………... Maintaining relationships with business counselors, partners, and neighbors……………………………………………………………. 78 The use of retail technology………………………………………… 79 The use of alternative retail channels……………………………….. 79 Sourcing plans………………………………………………………. 80 Human Capital Resources……………………………………………….. 83 Sustained Competitive Advantages……………………………………… 84 5.5 Marketing and Management Plans…………………………………………... 85 Product Strategy…………………………………………………………. 85 Price Strategy…………………………………………………………….. 86 Promotional Strategy…………………………………………………….. 87 Customer Relationships/Interactions…………………………………….. 88 Customer profiles and shopping behaviors…………………….…… 89 Customer services…………………………………………………... 90 Experiential realms…………………………………………………. 91 5.6 Limitations…………………………………………………………………… 95 5.7 Implications and Future Research..………………………………………….. 96 REFERENCES…………………………………………………………………………… 98 APPENDICES …………………………………………………………………………... 104 Appendix A. Institutional Review Board Approval…………………………….. 104 Appendix B. Participant Invitation……………………………….……………. 133 Appendix C. Informed Consent Form…………………………………………... 134 Appendix D. Questionnaire for Demographic Information…………………….. 136 Appendix E. Interview Instrument……………………………………………… 138 Appendix F. Samples of Data Coding Process………..…………………..……. 140 Appendix G. Refined Emergent Themes..……………………………………… 164 v LIST OF TABLES TABLE 1. Profiles of Second-Hand Retailers……………………………………………. 37 TABLE 2. A Typology of Vintage, Consignment, and Thrift Stores…………………….. 75 vi LIST OF FIGURES Figure 1. The relationships between strengths-weaknesses-opportunities-threats analysis and RBV………………………………………………………………………………… 24 Figure 2. The four realms of an experience…………………………………………….... 28 Figure 3. A Conceptual framework, second-hand retail business owners-managers’ business practices regarding resources and marketing plans…………………. 39 Figure 4. Second-hand clothes’ distribution channels…………………………………… 80 vii ACKNOWLEDGMENTS I would like to express my deepest appreciation to my advisor, Dr. Linda Niehm, who always encouraged me and provided directions to strengthen my potential. Although it was difficult time for me to realize my abilities and to overcome my weaknesses, she has always trusted my abilities as a researcher. Without her patience and guidance, I would not have been able to overcome my weaknesses and other obstacles to successfully complete this research. I would like to thank to my committee Dr. Te-Lin Chung has always motivated me to seek new ideas, and generously taught me her knowledge and experiences at the level of my viewpoints. I would like to express my gratitude to Dr. Deanne Brocato, who willingly participated in all committee meetings and provided much needed assistance. My special thanks goes to Eonyou Shin, who provided me her precious vacation time for long reliability checking processes, understanding my situation and trying to provide me with the best suggestions. I would also thank to Han Kwon, who helped me as a good friend as well as a transcriptionist, despite his busy schedule. I would like to thank Jinhwan Oh and Pollyanna Zhang, and all of my other friends in Ames, who have supported me and prayed for me. Finally, I would like to thank my parents, younger sister, and younger brother, who have always supported me for this long journey and sent their love from South Korea. I thank them again for doing their best in their positions, and I also send my love to South Korea. viii ABSTRACT Second-hand clothing has been traded since the Renaissance era, and widely consumed by a majority of the populace. However, very few studies concerning second- hand retailing and consumer preferences have been conducted, especially
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