Assignment task:
Pawnshops, not resale platforms, are where you can get designer stuff for a lot less.
It has never been easier to acquire designer arm candy for your wardrobe in a sustainable way. You probably already know of resale platforms, rental services and Carousell. Now, add pawnshops to your list of places to hit up when you are in the mood for some luxe for less.
Yes, you read that right. Today's pawnshops do not just deal with your grandmother's gold coins and bars anymore. In recent years, some pawnshop chains in Singapore, including Maxi- Cash, ValueMax and MoneyMax have become somewhat of a "secret" haunt for savvy, eagle- eyed shoppers.
At these pawnshops, pristine-looking designer bags from brands such as Louis Vuitton, Chanel, Gucci and Prada are prominently displayed alongside glittery cases of gold jewellery and watches for shoppers to browse and bring home, should it strike their fancy.
While prices can fluctuate depending on the condition of the item as well as market demand and fashion trends, one can generally expect to pay about 20 to 30 per cent less compared to retail prices - with discounts of up to 70 per cent if you are lucky.
"We have seen an increased acceptance amongst Singaporeans in owning pre-owned luxury goods today where consumers are able to purchase the same brand in a similar condition at a significant discount, sustainably," said Elim Lau, head of retail operations at MoneyMax, which launched pawning, selling and trade-in services for pre-owned luxury bags in Singapore in 2016.
For example, ValueMax pegged the Hermes Birkin 32 Ostrich Hac in Gris France-grey at S$28,000 and the blue Hermes Birkin 30 Porosus crocodile at S$78,900. Meanwhile over at online retailer FarFetch, a similar preloved grey Hermes Birkin 30 Ostrich is priced at S$67,493 and a preloved magenta pink Hermes Birkin 30 in crocodile leather is priced at S$173,554. "At that time, we realised that there is an increasing pool of customers enquiring with us to encash their luxury bags and accessories. Yet, there weren't many convenient and trusted options offering such solutions. Essentially, these customers are looking to maximise the resale value of their luxury items," Lau added.
What makes pawnshops an appealing option for bag sellers is that they offer some flexibility compared to resale platforms.
"Pawning allows a borrower to redeem their pawned items anytime within the pawn period when you pay back the full loan amount and interest up to that month. The advantage of pawning is also to provide funding flexibility as it allows a borrower to obtain finance on demand," explained Yeah Lee Ching, executive director of ValueMax.
Another lesser known secret is that not all luxury goods are used items. "A majority of the preloved items that Maxi-Cash carries are unused and unworn. They are as good as brand new," said Ng, adding that customers can check with staff to find out which items are in unused condition.
And as more consumers begin to appreciate the benefits they can reap from participating in the circular economy - both on their wallets and for the environment - it is certainly worth placing pawnshops on your radar for your next shopping expedition.
Said Lau, "We are confident that this market will increasingly become part and parcel of a modern lifestyle - owners will want to maximise the resale value of their luxury items and young working adults who cannot afford full-priced items have an option to purchase preloved luxury."
Question:
Using the first three (3) stages of the consumer decision-making process (i.e., need recognition, pre-purchase information search, and evaluation of alternatives), demonstrate how a potential consumer might arrive at considering purchasing luxury bags at a pawnshop.