Building consumer trust in secondhand fashion: A signaling theory perspective on how consumer orientation and environmental awareness shape engagement

Abstract

The secondhand fashion market suffers from information asymmetry, creating consumer distrust and limited engagement in secondhand fashion (ESHF). The existing research on how sellers and product signals can mitigate this distrust is limited and produces conflicting results. This is particularly true in terms of understanding how signaling interacts with consumer-specific factors such as orientation and environmental awareness. Thus, this study contributes to understanding the factors driving consumer trust (CT) and ESHF through signaling theory and the nuanced role of consumer orientation and environmental awareness. Structural equation modeling, including multigroup analysis, is employed to test the proposed hypotheses with a sample of 203 Indonesian consumers from a secondhand market platform. The findings indicate that signals such as seller reputation, product history, and refurbishment details significantly enhance CT, with seller reputation being the most influential of the factors. The effectiveness of these signals varies by consumer orientation: functionality-oriented consumers respond more to remarketing information, whereas newness-conscious consumers are influenced more by refurbishment details. Additionally, consumer environmental awareness significantly strengthens the positive relationship between CT and ESHF, highlighting the importance of aligning environmental values with trust-building measures to enhance consumer ESHF. These insights enrich the theoretical understanding of signaling in secondhand markets and offer practical guidance for addressing the challenges associated with CT and ESHF.