Paying Twice for Aesthetic Customization? The Negative Effect of Uniqueness on a Product's Resale Value

Abstract

Customers frequently gravitate toward unique products, and firms increasingly utilize mass customization strategies allowing customers to self-customize products according to their unique preferences. While existing research shows that customers are willing to pay extra for this uniqueness, the present investigation points to a potential cost of self-customization that has been largely overlooked thus far. Specifically, the authors argue that what creates value for the individual consumer-designer (i.e., the original customer of the self-customized product) might conversely be detrimental to potential customers on the second-hand market, particularly in the context of aesthetic (vs. functional) customization. Results of three distinct data sets (including an analysis of more than 500,000 pre-owned car sales listings) support this uniqueness-hurts-resale hypothesis and provide a series of more nuanced findings. Consistent with the theorizing and empirical studies, three follow-up experiments show that while consumer-designers’ valuations are positively affected by uniqueness, uniqueness indeed negatively affects second-hand market customers’ willingness-to-pay. This is because the more unique a given configuration to a given consumer-designer, the lower the likelihood that said design will meet second-hand market customers’ taste preferences. The findings point to a tension between maximizing utility at first purchase and minimizing the related cost of aesthetic customization at resale.

Understanding Consumer Self-Design Abandonment: A Dynamic Perspective

“…Given that consumers do actually start the customization process with the principal goal to finish it (Xie, Bagozzi, and Troye 2008), it seems plausible that they have some optimism regarding the subjective value they might obtain. In other words, consumers’ valence (Colombetti 2005) is positive in the beginning, likely due to three principal factors (Dellaert and Stremersch 2005; Fuchs and Schreier 2023; Huffman and Kahn 1998; Randall, Terwiesch, and Ulrich 2007; Schreier 2006). The first and perhaps most obvious is the product design that consumers generate, and that may be more or less appealing to them (i.e., the design fits better with their individual preferences, appears more unique, etc.).…”