tcsdaily

Shopping as a Lifestyle

By Glenn Harlan Reynolds, 14 Dec 2005

Okay, I’ve written about shopping here before — in some ways, as recently as last week, and, if you compare this recent story with this column from 2003, maybe even presciently. I’ve also written about the way things like eBay are changing our country, and Christmas shopping, in all sorts of ways.

But I haven’t thought things through in the way that Daniel Nissanoff has. Nissanoff’s new book,FutureShop: How the New Auction Culture will Revolutionize the Way We Buy, Sell, and Get the Things We REALLY Want, looks at the long-term impact of easy purchase and resale of, well, pretty much everything. And it sounds as if it might be bigger than most anyone realizes.

Right now, eBay is a novelty, really, even if it’s become a fairly important one. But Nissanoff points out that eBay (along with other auction sites in existence, or waiting to be invented) isn’t just a place to buy and sell, but to buy and resell, so that consumers can recapture a lot of value from things that currently just sit in closets depreciating until people give up and throw them away. Having done a major round of closet-cleaning this summer, I can identify: We gave some things away to friends and family, but we threw away a lot of stuff that still had some value. I probably should have tried to unload at least some of it on eBay.

Nissanoff argues that with the advent of “dropshops” that sell things for you, and increasing familiarity with Internet auctions in general, more people will be doing just that — reselling stuff via auction sites rather than just storing it until they toss it in a fit of pique. And he also argues that this will change the markets fundamentally. Instead of buying, say, a camera or a pair of skis with the expectation that the price we pay will come entirely out of our pocket, we’ll buy things with the expectation that we can recapture a lot of their value later, by reselling them.

Right now only a few consumer products fall into this category; cars are probably the most obvious. Most people buy a car with the expectation of reselling it. They also pay attention to how well cars hold their value for resale, with brands that depreciate less (like Mercedes or Toyota) commanding a premium when new. And there are considerable resources available for those who want to know the going rate for used cars in various conditions.

Imagine if everything worked that way. You’d probably be more likely to buy a Burberry raincoat, or a new Nikon camera, if you knew that you could resell it in a year or two for 60% of its value, instead of clogging a closet until you eventually threw it away. Or you might choose to buy one a year old off eBay and save the 40% upfront.

Some people are already doing this, but if it gets easier, and more accepted, enough people will do so that it will change the market. Right now, notes Nissanoff, luxury brands like Chanel actually try to suppress sales of used products on eBay for fear that those cost them sales of new goods. But that strategy, probably beneficial in the short term, could be disastrous if people started buying Chanel with the expectation of reselling it. Imagine what would happen to Mercedes’ new car sales if the company tried to crack down on the market in used Mercedes automobiles. Nothing good, I’m sure. That’s why some companies are already taking control of the secondary market in their products (much as car dealers have done with “certified pre-owned” programs) by offering trade-in credits and selling used products themselves.

The kind of “auction culture” that Nissanoff foresees is likely to have interesting second-order effects, too. Some products with a steeply improving performance curve – like electronics – may not be built with the resale market in mind, but for others it may mean a move away from planned obsolescence. And to the extent that resale displaces the sale and purchase of new goods, it may offer an environmental bonus.

As with so many technologies (the theme is sounded at length in my forthcoming book) the end result may be a sort of “back to the future,” where such 20th Century bugbears as short product cycles, planned obsolescence, low quality, and clogged landfills become far less prominent as people once again build things to last, because people aren’t buying things to use and discard. Sounds good to me.

How the New Auction Culture Will Revolutionize the Way We Buy, Sell, and Get the Things We REALLY Want

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