Blockchain in Luxury Resale: The Impact of Blockchain Technology Through Regulatory Focus and Uncertainty Reduction Theories

Abstract

The exponential growth of the online luxury resale market has spurred a notable shift toward a circular economy, reflecting the increasing consumer preference for pre-owned luxury items. Nevertheless, this growth presents challenges related to product authenticity and seller credibility. In response to these concerns, blockchain technology (BT) emerges as a promising solution, leveraging a decentralized ledger to enhance transparency and reduce information asymmetry. This allows for the traceability of pre-owned luxury goods, addressing issues of provenance and authenticity in the online resale space. By incorporating regulatory focus theory into the uncertainty reduction theory, this study examines how approach and avoidance motivations impact evaluations of BT-enabled platforms to effectively mitigate consumer uncertainties and influence trust. The collected data (N= 511) was analyzed through partial least squares structural equation modeling (PLS-SEM; study 1), and a complementary qualitative study (study 2) was additionally conducted. Results reveal that distinct motivations coexist, each following separate pathways to build consumer trust. Findings indicate that an approach orientation mindset highly values the reliability of BT-enabled information, while an avoidance orientation focuses on risk mitigation and expresses heightened uncertainty in online transactions. Consequently, BT is found to be instrumental in reducing consumer concerns about purchasing pre-owned luxury products. The study contributes to the existing literature by shedding light on the psychological dynamics influencing consumer trust in BT-enabled platforms, has implications for luxury retailers contemplating BT integration, and offers insights into consumer behavior that can inform strategies to enhance perceived trust in online luxury resale.