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The New Luxury

ARM: Dissertation Proposal

HAW15443989

Word Count: 2611

Date: 27/11/19

A Transactional Guide: To Buy, Rent or Sell?

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Table of Contents:

1. Introduction & Rationale 3 2. Aims & Objectives

2.1 Aim 5 2.2 Objectives 5

3. Preliminary Literature Review 6 4. Research Design & Research Methods

4.1 Research Design 9 4.2 Research Methods 11 4.21 Sampling Method 11 4.22 Data Collection 12 4.23 Reliability 12 4.24 Content Validity 12 4.25 Face Validity 12 4.26 Internal Validity 13 4.27 Ethics 13

5. Limitations & Final Considerations 14 6. Proposed Structure of MSc Project 15

References 16 Appendix 18 1.1 Critical Path 18 1.2 McGraw-Hill Connect Resource 19 1.3 Information and Consent Form Example 20

List of Figures:

Figure 1: Venn Diagram 6 Figure 2: Research Onion (Saunders et al, 2009, pp. 108) 9 Figure 3: Sampling Technique (Saunders et al, 2009, pp. 213) 11

List of Tables: Table 1: Creswell’s Alternative Strategies of Inquiry (Creswell, 2003, pp. 13) 10

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1. Introduction & Rationale

Consumer attitudes towards traditional methods of purchasing are changing. With sustainability becoming more important in consumers decision making, a strong shift noted by Business of Fashion & McKinsey in both 2019 and 2020 State of Fashion reports (2019, 2020). Yeoman (2011, pp. 48) agrees with this consumer shift, stating that growing intolerance for wasteful consumerism is on the rise. As a result, alternative methods of retailing are gaining momentum. Rent the Runway (RTR), ThredUP and The Real Real (RR) are just an example of the companies leading the way in the US in this alternative retail movement . As discussed by Mintel’s Retail analyst DeSalva (2019). DeSalva (2019) credits both RTR and The RR for introducing a new generation of consumers to the concept of shopping resourcefully. Stating that American consumers are beginning to entertain the concept of not buying new, or buying at all, which loosens the relationship of consumer ownership (DeSalava, 2019). Gopalakrisnan et al (2017, pp. 354) categorises these alternative retail methods as Collaborative Consumption (CC). Gopalakrisnan et al (2017, pp. 354) describes the concept as an emerging sustainable business approach, encapsulating various business models such as renting, trading, and thrifting. Gopalakrisnan et al (2017, pp. 355) expands on this by discussing other industries in which CC has become successful e.g. Airbnb and Zipcar as methods of CC in the car and space sharing industries, whilst Mckinsey’s 2019 State of Fashion report (2019) expands on this by identifying Netflix and Spotify as alternatives to video and music store models. This increase in sharing vs owning calls for a ‘Netflix’ or ‘Spotify’ of fashion, as concluded by a BBC Business Report (Hooker, 2018). US-based luxury consignment business The RR partnered with UK brands Stella McCartney in 2017, and Burberry in late 2019 (Ma, 2019). This partnership was designed to increase motivation towards circular economy, whilst increasing brand/product valuation, rewarding consignors with exclusive shopping opportunities at full price Burberry and McCartney stores (Ma, 2019). Shortly after, Luxury online retailer Farfetch joined forces with Thrift+, a UK based second-hand start-up that donates to 160,000 UK registered charities (Whelan, 2019). This industry shift that has aided consumers in being introduced to luxury brands that they may not have purchased otherwise, as explain by Tururnen et al (2015, pp. 58). Similarly, this notion was also expressed by RTR co-founder Jennifer Hyman, who stated that women renting from RTR are choosing brands they would never choose before due to the break-down of financial barriers and choice available to them (McKinsey, 2019, pp. 43). This shift in purchasing behaviour towards renting and second-hand is projected to make up 13% of Americans wardrobes by 2028, as projected by US second-hand giant ThredUP (ThredUP, 2019) ThredUP predicts that second-hand, renting & subscription are the top 3 fastest growing retail categories, with second-hand purchases making up 1/3 of American consumers wardrobes by 2033 (ThredUP, 2019).

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This study aims to investigate this growing consumer trend, focusing itself solely on the UK economy. Most current studies surrounding this topic are heavily focused on US populations, with the exemptions of few Australia and European based studies. Additionally, most international and UK rental sites are geared towards female clientele. Therefore, this study will lend its focus towards female participants only.

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2.1 Aim: To quantitatively analyse the barriers towards the adoption of sharing economy (e.g. rental) and circular economy (e.g. second-hand goods) by considering UK Female luxury consumers attitudes to determine the most suitable economy for luxury brands.

2.2 Objectives:

1. To critically evaluate the barriers hindering the adoption of sharing and circular economy practices and the opportunities and challenges brands face.

2. To identify how the luxury sharing and re-sale platforms are gaining sales from luxury brands.

3. To analyse UK female consumer attitudes towards adopting rental and second-hand luxury fashion.

4. To provide managerial recommendations for UK luxury brands on extensions into the sharing and circular economy.

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3. Preliminary Literature Review

This project aims to gain guidance from existing literature surrounding three key outlining theories: Circular Economy, Sharing Economy & Consumer Behaviour. With addition to CC, Access-based Consumption (ABC), Sustainability and Price Sensitivity. These theories will be discussed and analysed through the literature of multiple academic authors in order to gain an academic perspective surrounding this forthcoming project.

The theory of Circular economy is discussed by Gopalakrishnan et al’s 2018 study regarding CC examining second-hand fashion in terms of business model analysis. Here Gopalakrishnan et al (2018, pp. 354) identifies the growing CC trend amongst the fashion industry in terms of growing popularity of second-hand fashion platforms. Gopalakrishnan et al’s (2018, pp. 359) breaks down certain motivations for consumers shopping within this market, as identified through their sample of US Second-hand store managers. Strong conclusions are made concerning cheaper prices, with consumers achieving a ‘thrill of the hunt’. Participants concluded that their clientele, predominately woman, believe shopping second-hand means

Figure 1: Venn Diagram

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gaining cheaper attire from well-known brands (Gopalakrishnan et al, 2018, pp. 359). Almedia et al (2019, pp. 389) supports Gopalakrishnan et al (2018) by stating that shopping for second-hand fashion goods isn’t due to financial restraints, it’s the ideal of finding an exclusive ‘outfit’ at a lower price than traditional retailers. This notion is built upon by Carey et al (2012, pp. 957) who’s study identifies six main psychological motivations for shopping second-hand: Fashion Involvement, Nostalgia Proneness, Need for Uniqueness, Need for Status, Eco-consciousness and Frugality, with additional motivational drivers; Bargain and Treasure Hunting. Carey et al’s (2012) findings link with Gopalakrishnan et al’s (2018) bargain seeking conclusions, as a strong theme amongst Carey et al’s (2012, pp. 957) findings involve three topics surrounding purchasing behaviour such as, Frugality, Bargain and Treasure Hunting. Carey et al (2012, pp. 962) elaborates on the term Frugality by including Value Consciousness as a linked psychology. However, Carey et al (2012, pp. 962) makes the conclusion that although frugality is linked to value and price consciousness within consumer’s purchasing habits, the behaviour is not linked to eco-friendliness, rejecting the idea that the two go hand in-hand. As these two studies view-points are for the fashion industry in general, these conclusions cannot be fully applied to the luxury fashion industry as the shopping behaviours surrounding luxury involve different characteristics such as public and brand self-consciousness and self-esteem as identified by Giovannini et al (2014, pp. 25), along with the notion of higher price points. Therefore more research surrounding luxury needs to be conducted in order to achieve this context of the overall aim for this project. However, Carey et al’s (2012, pp. 957) identification of the consumers ‘Need for Uniqueness’ when purchasing second-hand correlates with Giovannini et al’s (2014, pp. 27) luxury consumer motivations, which states the luxury consumers desire for uniqueness. However, more clarification is needed in order to determine whether the need for uniqueness lies within the characteristics of the product, or the wearer within society. Yeomans (2011, pp. 50) concludes that luxury is now more accessible to the mass market, moreover Turunen et al (2015, pp. 57) states that examples of luxury consumers who would usually invest in a cheaper ‘sister’ luxury brand are now turning towards second-hand luxury products and luxury rental products instead. Suggesting that consumer choice and available platforms to shop are being more widely accepted by the market. In terms of the sharing economyl, Lang (2019, pp. 7) suggests that fashion rental allows consumers to strive for a more luxurious lifestyle that fails to reflect their real social status. Supporting Yeomans’ (2011) notion that luxury is now more accessible to the mass market than ever. Lang (2019, pp. 7) links the idea of frugality as a consumer motivation towards fashion renting. An term also coined when discussing second-hand items as mentioned earlier by Almedia et al (2019), Carey et al (2012) and Gopalakrishnan et al (2018). Suggesting that this may be a key motivator when consumers are looking to either shop second-hand or rent. This is again supported by Lang et al’s (2018, pp. 38) statement that consumers who cannot afford to purchase luxury at full price can now rent them as an alternative. Lang et al (2018, pp. 38) credits CC for allowing consumers to have more access to new fashions and exclusive products. However, Lang et al (2018, pp. 39) identifies that although renting designer clothing in the US and renting designer accessories have been increasingly popular, this has been limited to special occasion wear. A hint at the potential limitations

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facing the ABC sharing economy and a limitation facing the available US platforms. Evidencing that a UK based study may reveal different or similar results. Chow (2020, pp.1) defines ABC as peer-to-peer sharing of underutilized products and services. Armstrong et al (2019, pp. 583) views this form of alternative retailing a potential solution to reduce the excessive textile consumption facing the fashion industry. Whilst, Shen et al (2019, pp. 185) pins the success of the ABC movement on the integration of the retailer and the renter. Which, as a result would create more choice for the consumer and more consolidated access to existing and potential customers, as mentioned before by Lang et al (2018) and Yeomans (2011). However, this conflicts with Giovannini et al’s (2018) idea that the luxury consumer craves uniqueness, an option that the average consumer doesn’t have sufficient means to obtain. Therefore, this creates a juxtaposition for where the luxury retailer faces a dilemma. As Turunen et al (2015, pp. 58) stated earlier regarding the use of second-hand purchasing, consumers are introduced to new brands in which they originally may not have considered or been aware of before. The same concept can be applied to renting due to the nature of consumption and accessibility made aware by Lang et al (2018) and Yeomans (2011). However, it could be suggested that luxury brands participating in the business of second-hand and renting are damaging the exclusivity and uniqueness they allure, as a result of making themselves more accessible through lower price points and alternative retailing methods.

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4.1 Research Design Following the guidelines of Saunders et al (2009, pp. 108) research onion (figure 2), this study will take the philosophical approach of Positivism. According to Creswell’s (2003, pp. 7) definition of Positivism is to examine causes that influence outcomes, developing numerical measures that study the behaviour of individuals. This correlates with the overall aim of which is to quantitively examine two causes in order to convince an overall outcome.

A deductive approach will be taken in that a following a literature based review surrounding the first objective of this project, hypothesis’ will then be formed and tested using data collected, this will be guided by the construct of objective 3. This will help achieve results in order to conclude objective four and the overall aim of this study. Creswell (2003, pp. 13) further defines the nature of a quantitative study by outlining the typical methods of data collection (table 1).

Figure 2: Research Onion (Saunders et al, 2009, pp. 108)

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As exampled in Table 1, this study will conduct a survey following the obligations of the study third objective in order to collect data surrounding UK female consumer attitudes. A mono-method quantitative process will suffice due to the comparative nature of the aim and supporting objectives, meaning that a single survey should obtain sufficient enough data to quantitively explore the underpinning guidelines. As explained by Creswell (2003, pp.14), surveys can take a cross-sectional or longitudinal approach, due to certain time restrictions within this project a cross-sectional method will be the most efficient due to the given time frame. The data collection and analysis section, as outlined by Saunders et al’s (2009, pp. 108) Research Onion, will use Google Forms in order to facilitate the survey section of this project, whilst the use of SPSS will be integrated heavily in the Research Methods section. SPSS will be used to quantify and examine the data collected within the survey section, providing statistical evidence in order to reject or fail to reject hypothesis created, aiding in the conclusion of this project.

Table 1: Creswell’s Alternative Strategies of Inquiry (Creswell, 2003, pp. 13)

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4.2 Research Methods

4.21 Sampling Method Reviewing Sanders et al’s (2009, pp. 213) sampling technique’s (figure 3) A Non-Probability sample path will be chosen due to the probability of all UK female’s partaking in this study highly difficult to achieve (Saunders et al, 2009, pp. 213). Additionally, Snowball and Convenience sampling will be employed.

As discussed by MacIntosh and O’Gorman (2014, pp. 162) the Snowballing technique allows this study to identify a participant that meets the criteria, in this case UK based female, to act as a link to gather more participants. This aims to act as a catalyst in order to reach a substantial (200+) response rate in which this study can then quantify its data in SPSS. Additionally, the idea of convenience sampling will also be employed. Creswell (2003, pp. 156) defines Non-Probability sampling as Convenience sampling, explaining that this is devised by employing respondents that are convenient and available to the study. Due to the time constraints mentioned earlier, these forms of sampling are the most appropriate and viable options for this study.

Figure 3: Sanders et al Sampling Technique (2009, pp. 213)

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4.22 Data Collection

To appropriately conduct a Mono-Method Quantitative study, a survey will be undertaken in order to fulfil the method set out to achieve the underlying aim. As discussed by Creswell (2003) and Saunders et al (2009), this quantitative study will conduct an online questionnaire instead of an experiment. Due to the comparative nature of the aim and objective number 3, appropriate data can be collected and compared via this route. By sending out the survey via an online platform (google forms) a larger reach and participant pool can be accessed. Additionally, by engaging Snowball an Convenience sample methodology’s, sharing is made easier due to its online nature. This study aims to collect a larger pool of respondents in order to accurately compute its data and reach a generalised conclusion.

4.23 Reliability

Saunders et al (2009, pp. 156) defines the assessment of reliability as asking the below questions:

1. Will the measures yield the same results on other occasions? 2. Is there transparency in how sense was made from the raw data?

These reliability questions are also confirmed by MacIntosh and O’Gorman (2015, pp. 166). MacIntosh and O’Gorman (2015, pp. 166) state that self-administered survey’s lack bias from the researcher themselves due to their lack of presence when the survey is being completed. Therefore, in order to answer Saunders et al’s (2009) questions surrounding reliability, questions will included in the survey sequence to gauge the respondents engagement. This will aim to eradicate lazy responses that tamper with the overall data set. Transparency from the raw data will be evidenced in the appendix and research methods section as findings will be drawn upon from the raw data set.

4.24 Content Validity

Content validity aims to be achieved via engaging the correct SPSS measurement tools. Survey questions will take the correct nominal, ordinal, interval and ratio responses with correct measures in place.

4.25 Face Validity Ensure survey questions achieve their overall objective and are created in the correct format in order to later conclude.

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4.26 Internal Validity

In order to achieve internal validity, the literature used will create the basis of survey questions. This will create correlation between hypothesis’, survey questions and overall conclusion. Increasing validity through ensuring the use of academia is constantly considered.

4.27 Ethics The Study will be in line with UAL’s code of ethics, i.e. Participants will fill out UAL’s Information and Consent Form (see 1.3 appendix).

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5. Limitations & Final Considerations Certain limitations will incur around the sampling method chosen. Due to the nature of convenience and snowball sampling, questions around its validity and reliability remain as it lacks a robust and random approach that other sampling techniques obtain. Therefore, results may vary if the whole population was sampled. However, due to the time frame and available monetary funds for this study, sampling and convenience methods are the most accessible way to conduct this research.

As a result of the chosen sampling method, a large respondent rate is required in order to make the data gain more validity. Therefore, a sufficient time scale must be put in place in the aim of gaining the 200+ participants forecasted to make the data plausible. Additionally, correct SPSS measures need to employed in order to formulate the raw data into relevant conclusions.

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6. Proposed Structure of MSc Project Title page:

Abstract, Table of contents, List of figures etc. (not included in the word count)

Chapter 1:

Introduction (Approx. 2250 words) - Context & Rationale evidencing why this study needs to be done. - Including and comparing industry and academic evidence.

Chapter 2:

Literature Review (Approx. 5000 words) - Evaluating the barriers surrounding sharing and circular economy. - Discussing all theories mentioned in Venn Diagram (figure 1). - Comparing academic discussions. - Discussing need for UK based study. - Hypotheses

Chapter 3:

Research Design (Approx. 2250 words) - Methodology - Reliability & Validity - Ethical considerations

Chapter 4: Findings and Analysis (Approx. 4000 words) - Evaluating and concluding SPSS data as a result of survey - Analysing data

Chapter 5:

Discussion and Conclusions (Approx. 2500 words) - Correlate SPSS findings with Literature review - Conclude overall aim - Discuss limitations to study and how it could be furthered.

Reference List (not included in the word-count) Appendices (to include individual learning agreement and research ethics forms) (not

included in the word count)

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References:

Armstrong , C. & Lang, C. (2019) ‘Fashion leadership and intention toward clothing product-service retial models’ Journal of Fashion Marketing and Management. 22(4), pp. 571-587. Almedia, S., Machado , M, Bollick, L & Bragagnolo, G. (2019) ‘Second-hand fashion market: consumer role in circular economy’ Journal of Fashion Marketing and Management. 23(3), pp. 382-395. Business of Fashion x Mckinsey & Company (2020) ‘The State of Fashion 2020: Download

the Report’ Available at: https://www.businessoffashion.com/articles/news-analysis/the-

state-of-fashion-2020-download-the-report (Accessed: 21/11/19)

Business of Fashion x Mckinsey & Company (2019) ‘The State of Fashion 2019: Download

the Report’ Available at:

https://www.mckinsey.com/~/media/McKinsey/Industries/Retail/Our%20Insights/The%20S

tate%20of%20Fashion%202019%20A%20year%20of%20awakening/The-State-of-Fashion-

2019-final.ashx (Accessed: 21/11/19)

Carey, L. Cervellon, M. & Harms, T. (2012) ‘Something old, something used. Determinants of women’s purchase of vintage fashion vs. second-hand fashion’ International Journal of Retail & Distribution Management. 40(12), pp. 956-974 Chow, P. & Lee, S. (2020) ‘Investigating consumer attitudes and intensions towards online fashion retail renting’ Journal of Retailing and Consumer Services. 52(1), pp. 1-8 Creswell, J. (2003) Research Design. Qualitative, Quantitative and Mixed Methods Approaches. USA: Sage Publications Inc. DeSalva, A. (2019) ‘Rentals and Resale are dominating the apparel industry’ Available at:

https://academic-mintel-com.arts.idm.oclc.org/display/986078/?highlight (Accessed:

14/11/19)

Giovannini, S., Thomas, J. & Xu, Y. (2015) ‘Luxury fashion consumption and generation Y consumers, self, brand consciousness and consumption motivations’ Journal of Fashion Marketing and Management. 19(1), pp. 22-40. Gopalakrishnan, S. & Matthews, S. (2018) ‘Collaborative consumption: a business model

analysis of second-hand fashion’ Journal of Fashion, Marketing and Management. 22(3), pp.

354-368

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Hooker, L. (2018) ‘Will we soon be renting rather than buying our clothes?’ Available at:

https://www.bbc.co.uk/news/business-45630395 (Accessed: 21/11/19)

Lang, C. (2019) ‘Perceived risks and enjoyment of access-based consumption: identifying barriers and motivations to fashion renting’ Fashion and Textiles. 5(1), pp. 1-18. Lang, C. & Armstrong, CMJ. (2018) ‘Collaborative Consumption: the influence of fashion leadership, need for uniqueness, and materialism on female consumers’ adoption of clothing renting and swapping’ Sustainable Production and Consumption. 13(1), pp. 37-47. Ma, F. (2019) ‘Burberry partners with the Real Real in the name of circular fashion’ Available at: https://wwd.com/fashion-news/fashion-scoops/burberry-partners-with-the-realreal-name-of-circular-fashion-1203335581/ (Accessed: 7/10/19) MacIntosh, R. & O’Gorman, K. (2014) Research Methods for Business and Management: A Guide to Writing your Dissertation. Oxford: Goodfellow Publishers Ltd.

Another (no date) Trish Goff Wearing Monogrammed Chanel Glasses for A/W94. Available

at: https://www.pinterest.co.uk/pin/672866000556891983/ (Accessed: 1/11/19)

Saunders, M., Lewis, P. & Thornhill, A. (2009) Research Methods for Business Students. England: Pearson Education Limited. Turunen, L. & Leipamaa-Leskien, H. (2015) ‘Pre-loved luxury: identifying the meanings of second-hand luxury possessions’ Journal of Product and Brand Management. 24(1), pp. 57-65 ThredUP (2019) ‘Annual Report – Meet the Closet of the Future’ Available at: https://www.thredup.com/resale (Accessed: 22/11/19) Whelan, G. (2019) ‘Farfetch partners with second-hand clothing service’ Available at: https://www.drapersonline.com/news/latest-news/farfetch-partners-with-second-hand-clothing-service/7037916.article (Accessed: 9/10/19) Yeoman ,I. (2011) ‘The Changing Behaviours of Luxury Consumption’ Journal of Revenue and

Pricing Management. 10(1), pp. 47-50.

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Appendix: 1.1 Critical Path:

Recommended Research Activity (To be split by week)

Jan 2020

Feb 2020

March 2020

April 2020

May 2020

1st individual tutorial with supervisor FMP Briefing stage 1 Refine project as a result of Proposal feedback

Completion of introduction (context, rationale, aims & objectives) Completion of Literature Review

Write up of methodology 2nd individual tutorial with supervisor

Creation of survey & collection of data Coding data for SPSS input

3rd individual tutorial with supervisor Write up of findings

Completion of discussion, conclusions and limitations

Hand-in MSc Project & Academic Poster

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1.2 McGraw-Hill Connect Resource

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1.3 Information and Consent Form Example