Platform strategies for luxury brands operating in second-hand market under digital product passport regulation
研究欧盟数字产品护照法规下奢侈品牌在二手市场的四种平台策略，发现最优策略取决于二手销售中的奢侈体验和消费者对数字产品护照的偏好，为品牌维护排他性提供指导。
• Explore luxury brand operations under digital product passport (DPP). • A game-theoretic study on second-hand platforms (SHPs) under DPP. • The luxury experience provided during second-hand sales is critical. • Brands with an inimitable luxury experience should avoid SHP collaboration. • Brand exclusivity peaks when consumers display moderate interest in DPP. The EU’s Digital Product Passport (DPP) regulation, effective from 2027, will require luxury brands to disclose key information, such as product origin, materials, and ownership history. This mandated transparency is expected to enhance consumer trust in second-hand luxury purchases. Consequently, luxury brands are strategically responding by engaging with the second-hand market while preserving brand exclusivity and consumer trust. This study employs a game-theoretic analytical modelling approach to evaluate four second-hand platform (SHP) strategies under DPP, namely no platform collaboration (e.g., Prada and Louis Vuitton), collaboration with blockchain authentication (e.g., partnering with platforms like Vestiaire Collective), proprietary multi-brand platforms (e.g., Richemont's model), and proprietary mono-brand platforms (e.g., Oscar de la Renta). Our analysis reveals that the optimal strategy depends on two key factors, i.e., the luxury experience provided during second-hand sales and consumer preference for DPP usage. For instance, brands with an inimitable luxury experience should avoid SHP collaboration to preserve exclusivity, while those with the possibility of replicable experiences could benefit from operating proprietary SHP. Additionally, when DPP usage is limited to authentication, collaboration with external SHP is recommended; however, if consumers value DPP for ownership transparency, a proprietary SHP becomes the optimal choice. Notably, brand exclusivity peaks under an optimal pricing strategy when consumers display moderate interest in DPP ownership and obtain modest utility gain from product comparisons. This study provides actionable insights for luxury brands to strategically navigate the second-hand market, leveraging the DPP regulation to enhance consumer trust while maintaining brand exclusivity.