Princeton University

10 CHAPTER 2 THEORITICAL FOUNDATION 2.1. Second-Hand A second-hand is one that is previously used or owned by others (Princeton University, 2003). Second hand do not always refer to used good, second hand can also mean that the good is still new but being sold or given to other person. On this research, the word second-hand refers to the meaning of used item. 2.1.1. Second-Hand Shoppers’ Motivations Denis Guiot and Dominique Roux consider motivations for second-hand shopping to be abstract attributes with a reflective nature (Guiot & Roux, 2010)Critical motivation, economic motivation, and hedonic/recreational motivations are the factors from a hierarchical structure characteristic which is confirmed by the analysis. From the interview that they had done, critical motivations express the possibility of avoiding conventional channels, supporting ethical and ecological concerns about recycling and combating waste, and avoiding ostentation (Guiot & Roux, 2010)Second- hand shopping is one of the ways to escape from the traditional retailing. They do smart shopping (Haim Mano, 1997) which means that taking intelligent advantage by reusing products that other people do not want any longer. Moreover, critical motivation is also lead people to escape themselves from mass consumption and anything related to become fashionable, it is all about the value of the product itself rather than its function as a symbol or a sign. 11 While critical motivations are about the distance from the traditional system and the ethics and ecology, economic motivations are about price so that it include four motives that relate to price which are the wish to pay less, the search for a fair price, bargain hunting, and the gratification role of price (Guiot & Roux, 2010)People in this group think that by buying second-hand, they pay for the fair price comparing to when they buy new product with much higher price. They also love to do some bargain hunting in order to fulfill their primary needs, means that they can get more things by buying second-hand rather than new products. On the other hand, hedonic and recreational motivations are including treasure hunting, originality, social contact, and nostalgic pleasure. The activity when buying second-hand products is perceived as an adventure so that the consumers feel like a treasure hunter. Furthermore, one of the motives of buying second-hand is to get products that no one has, e.g. when they buy antique jewelry or vintage bags. Their other motive is also to get the pleasure by meeting and talking with others whose interests are similar. These kinds of people are the ones who enjoy social interaction and it is not always about finding and buying the second-hand product itself. Some people who have an attraction to old and or vintage products, they have an intention to buy second-hand products because of the history of the products and it reminds them from the past. 12 Denis Guiot and Dominique Roux, regarding to their prior study, found four antecedents which are related to economic motivation, critical motivation, and hedonic and recreational motivations. These antecedents are becoming a global determinant of all motivations, they are frugality, materialism, need for uniqueness, and nostalgia. Frugality is one’s thriftiness toward the spending that he or she does. Therefore, they are really price sensitive and anti-materialism, while materialism is the reverse of anti- materialism which means that a person who cares more about the brand that a product carries or the perceive value of the products in other eyes rather than the function of the product itself. Furthermore, some people buy second-hand because they want to have items that other people do not have since some of the second-hand items are one-of-a-kind. As what the author has mentioned above, for people who love to find vintage items, they will also really love to go to second-hand store or market to find vintage items. Even though not all of vintage items are used, but the majority of them are second-hand or used items. 2.1.2. Second-Hand Accessories in Jakarta Second hand clothing and accessories are popular in Jakarta to low economic class people. Pasar Senen which is located in Central Jakarta is the most popular place for people to find second hand accessories, some of them are also vintage items. Another location in Jakarta to find second hand accessories are SOGO Jongkok (located in South Jakarta), Pasar Melawai Blok M (located in South Jakarta), and near railway in Pasar Kebayoran Lama (located in South Jakarta). 13 On the other hand, there are boutiques that sell second hand clothes and accessories in Kemang (located in South Jakarta), Dharmawangsa Square (located in South Jakarta), and Kebon Sirih (located in Central Jakarta). Internet is one of the most potential channels for people to do trading, including selling and buying second hand accessories. Ebay, Kaskus, Multiply, Femaledaily, Facebook, and Twitter are the most used channels for trading. They do the trading in two ways, first, they do the trading via internet and send the items through TIKI or Pos Indonesia, and second, they meet in a place that they both agree and do the trading. Figure 2.1.2.1. Online Shopping Using Facebook as The Medium to Sell Second-Hand Bags Source : http://www.facebook.com/#!/album.php?id=100001918072202&aid=21873 14 2.2. Retailing Retailing is a set of business that adds value to the products and services sold to consumers for their personal or family use (Levy & Weitz, 2004). On the other hand, a retailer is a business that sells products and/or services to consumers for personal or family use (Levy & Weitz, 2004). 2.2.1. Retail Channel Retail channel is divided into three channel, they are including brick and mortar, internet, and catalog. • Brick and Mortar Brick and mortar channel is a channel for retailers to display and to sell their products through stores where customers can see and feel the products using their five senses (sight, hearing, smell, taste, and feeling). Brick and mortar is one of the channel that people usually see and experience. This type of channel is known to be convenient to the customers since they can experience the products before they finally make a decision whether or not to purchase the products. Figure 2.2.1.1. Second-Hand Boutique in Dharmawangsa Square Source : Raisa Jovanie Private Pictures. (March, 2011). 15 • Internet Online shopping is popular as it has no borders to promote and to sell products to anyone in this world. Moreover, it has unlimited space to display products through websites. Internet has been becoming a medium for retailers to sell their products. Other than websites, online shopping is done through social networking sites (i.e. Facebook, Friendster, Twitter), forums (Fashionesedaily.com, Kaskus.us, Femaledaily.com), and other sites i.e. Ebay, Multiply.com, Tokopedia.com. • Catalogue Retailers are also using catalogues as a medium to sell their products. Usually, on the catalogues, retailers will put the telephone number and the letter that will be used to write down the items that customers order to be sent back to retailers. Some retailers that do catalogue shopping are Victoria’s Secret, IKEA, Sophie Martin, and Oriflame. 2.2.2. Retail Industry in Indonesia According to a banking practitioner, Marina R. L. Pandin, retail business in Indonesia is classified into two groups, Modern Retail and Traditional Retail (Pandin, 2009). The first modern retail in Indonesia was established in 1962, it famously known as Sarinah Department Store. This concept was growing from 1970 until 1980. Since 1990 foreign retailers have started to enter Indonesia market. ‘Sogo’ was the first foreign retail chain from Japan who entered Indonesia. 16 Today, many types of modern retail chains are exist in Indonesia, i.e. Department Store (‘Sogo’, ‘Debenhams’, ‘Ramayana’), Boutique (‘Zara’, ‘Topshop’, ‘GAP’), Supermarket (‘Foodhall’, ‘Hero’, ‘Indomart’), Hypermarket (‘Giant’, Hypermart’, ‘Carrefour’), Specialty Store (‘Ace Hardware’, ‘Rumah Kita’, ‘Informa’), Mall (‘Pondok Indah Mall’, ‘Mall Plaza Senayan’), Supermall (‘Supermall Karawaci’, ‘Pluit Village’), Trade Centre (‘ITC Kuningan’, ‘ITC Mangga Dua’), Factory Outlet (‘Rumah Mode’, ‘Millenia’), etc. Figure 2.2.2.1. Characteristics of Modern Retail in Indonesia Source : The Portrait of Retail Business in Indonesia : Modern Market. (2009, March). Retrieved March 25, 2011, from http://www.bni.co.id/portals/0/document/2009Marchritel%20business.pdf 17 2.3. Consumer Behavior Consumer behavior is ‘the actions a person takes towards purchasing and using products and services, including the decision-making process that precedes and determine those actions’ (McColl et al, 1994, p116). Consumer behavior is influenced by many factors i.e. cultural, economic, psychological, sociological, demographic, lifestyle, social class, past experience, etc. Consumer behavior is important because consumer behavior leads to a person’s purchasing behavior. 2.3.1. Decision Making Process There are 5 stages of decision making process according to Richard Sandhusen (Sandhusen, 2008), they are : • Problem Recognition On the first stage, people start to realize something do not run as it should be. People recognize that they are facing problems and therefore they need to find out solutions to overcome the problems. For example, Jack is feeling thirsty in the middle of his walk in the sunny day. • Information Search On the second stage, people try to find alternatives to solve the problem. People are searching information needed in order to find the solutions. The information gained is based on how deep a person being involved with this problem. The higher the risk, the more information a person will search. For example, Jack is going to a mini market to purchase some drink, he will look what are the options he has.

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