A conceptual smart pricing solution for the second-hand sector

Abstract

The second-hand, or reuse and refurbishment, sector is a core part of the transition towards an economically inclusive and environmentally sustainable circular economy. Shifting consumer preferences and new platforms of exchange are helping to drive growth in second-hand sales across a wide range of product categories. Pricing decisions effect the profitability and overall viability of the second-hand sector and are a key requirement for its continued growth and maturity. However, findings from interviews with leaders in the second-hand sector indicate that traders do not currently leverage best practice pricing techniques or digital technologies effectively. Instead, they rely on the experience of team members, simple pricing guides, and manual calculations to set prices. This thesis uses a design science research methodology to develop two research artefacts that can be used to develop a digital pricing tool to help second-hand traders strategically price their goods. Firstly, a pricing matrix is consolidated from pricing literature to support traders to align their pricing approaches with their organisational objectives. Secondly, a high-level data architecture is presented to illustrate how data from second-hand traders could be used to develop a smart pricing solution for the sector.