Old But Gold? Product Design Innovation and the Value of Used Products in Secondhand Markets

An important global trend today is the rise of the secondhand market powered by consumers’ desire for sustainability and affordability, as well as a surge in the use of digital resale platforms. While marketing research has primarily focused on the success of new product markets, scant research has tried to understand secondhand markets. To advance knowledge in this area, we investigate how product design innovation affects the value of used products in secondhand markets. Specifically, we develop a framework of the intertemporal distinctiveness of a used product's design , defined as the extent to which the design of a used product is distinct from the newest design of the same product. We use image-processing software to analyze product pictures and quantify the intertemporal distinctiveness of design. Analyzing a unique dataset of used cars sold in the U.S. automotive market, we find a U-shaped relationship between the intertemporal distinctiveness of design and the resale price of used products. Moreover, we find that the effect of intertemporal distinctiveness is moderated by the within-category distinctiveness of a used product , defined as the extent to which a used product's design is distinct from other used products in the same product category. This study contributes to the research on product design and the determinants of resale prices, providing practical implications for consumers, manufacturers, and dealers.