Sharing Economy, Platforms, and Crowds
Paper Number
2512
Paper Type
Completed
Description
Branded recommerce — digitally enabled branded marketplaces that facilitate purchasing pre-owned items directly from a manufacturer’s e-commerce site — creates new opportunities for shared and sustainable product strategies. Powered by platforms like Trove, Thredup and Recurate, recommerce improves seller value capture from pre-owned sales and rental, enables circular consumption and brand experience control but also raises new cannibalization concerns. We develop a new model of these effects, contrasting a third-party marketplace for pre-owned items with branded recommerce, in a two-period model and an infinite-horizon model with overlapping generations. We show that the direct revenue benefits of branded recommerce are not their primary source of value, uncovering instead a set of indirect economic effects including product durability increases and seller incentives to lower quality uncertainty. Our paper sheds new insight into managing a critical new digital channel, underscoring its importance in aligning seller profits with sustainability goals.
Recommended Citation
Li, Rubing and Sundararajan, Arun, "The Rise of Recommerce: Ownership and Sustainability with Overlapping Generations" (2023). ICIS 2023 Proceedings. 15.
https://aisel.aisnet.org/icis2023/sharing_econ/sharing_econ/15
The Rise of Recommerce: Ownership and Sustainability with Overlapping Generations
Branded recommerce — digitally enabled branded marketplaces that facilitate purchasing pre-owned items directly from a manufacturer’s e-commerce site — creates new opportunities for shared and sustainable product strategies. Powered by platforms like Trove, Thredup and Recurate, recommerce improves seller value capture from pre-owned sales and rental, enables circular consumption and brand experience control but also raises new cannibalization concerns. We develop a new model of these effects, contrasting a third-party marketplace for pre-owned items with branded recommerce, in a two-period model and an infinite-horizon model with overlapping generations. We show that the direct revenue benefits of branded recommerce are not their primary source of value, uncovering instead a set of indirect economic effects including product durability increases and seller incentives to lower quality uncertainty. Our paper sheds new insight into managing a critical new digital channel, underscoring its importance in aligning seller profits with sustainability goals.
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