Research on Resale Strategies of Luxury Brands Based onConspicuous Consumption Behavior

With the rise of the resale market, some consumers with insufficient level of wealth to satisfy their show-off consumption mentality, and then purchase second-hand luxury goods. The resale of second-hand products has become a common phenomenon in the luxury goods industry; however, the strategic interactions between brand owners and second-hand dealers have been scarcely addressed. To analyze the optimal resale strategies for brand owners, incorporates consumer conspicuous consumption behavior and constructs a game theory model to examine the common strategies employed by brand owners in response to second-hand dealers’ intrusion. The model includes strategies of boycott, competition, and brand licensing, and derives the optimal pricing and profits for both brand owners and second-hand dealers under different strategies. The study finds that brand owners consistently benefit from consumers’ preference for high status. When second-hand dealers enter the market with the same level of low (or high) product quality and authenticity, they either damage the brand's image and dilute brand value or harm the brand owner's profits due to the strong substitutability of second-hand products. Licensing fees, as a regulatory tool, can enhance channel efficiency and the double marginalization effect within decentralized channels under brand licensing can actually benefit both brand owners and second-hand dealers, achieving a win-win outcome. Additionally, the core conclusion still holds when the consumer utility function is further expanded, and there is a possibility of reduced profitability for the brand owner only if it chooses a competitive strategy. The conclusions of this study provide theoretical foundations and strategic recommendations for luxury brands in formulating scientifically-informed resale decisions.