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 secondhand market, particularly in the context of aesthetic (vs. functional) customization. Results of three distinct data sets (including an analysis of more than 500,000 preowned 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 although consumer-designers’ valuations are positively affected by uniqueness, uniqueness indeed negatively affects secondhand-market customers’ willingness to pay. This is because the more unique a given configuration is to a given consumer-designer, the lower the likelihood that said design will meet secondhand-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.