Show, Don't Tell: Education and Physical Experience Effects in Remanufactured Product Markets

Abstract

Problem Definition: We study the effectiveness of two theoretically and practically relevant interventions designed to stimulate the appeal of and willingness to pay (wtp) for re-manufactured (refurbished) consumer products that are often found repulsive by consumers: 1) educating consumers about the re-manufacturing process, 2) providing physical experience with re-manufactured products. Academic/Practical Relevance: We contribute to the emerging literature on behavioral issues in a circular economy, which examines consumer attitudes toward sustainable product solutions and ways to improve them. We provide insights to practitioners regarding how the adoption rates and wtp for re-manufactured consumer products may (may not) be improved through certain managerial interventions. Methodology: We conduct an online survey and two randomized experiments in a controlled lab environment and a regression based mediation analysis with non-parametric bootstrapping technique to answer the research questions. Results: Education does not cause an increase in the appeal of and wtp for re-manufactured consumer products. Providing physical experience, relative to text and text plus picture modalities, significantly increases both the appeal of and wtp, as a result of increasing perceived quality and decreasing disgust. Managerial Implications: Sellers can benefit from marketing re-manufactured consumer products through physical channels (i.e., brick-and-mortar, outlet, showroom stores) as opposed to solely through online channels, which is the common wisdom.