In the luxury industry, fashion brands like Burberry and Cartier are reported to destroy leftover products at the end of the selling season (Scenario BC). This helps to maintain products’ exclusivity image but creates a loss of goodwill because consumers in the market commonly value sustainability and responsibility. In the sharing economy, luxury fashion brands can sell their leftover products to certain platforms and generate revenue (Scenario PL), but doing so reduces the image of product exclusivity. In this paper, we establish stylized models and analytically investigate this operational problem. In the basic model, we consider the case in which the luxury fashion brand can choose between Scenarios BC and PL with deterministic leftover-product-handling effects. We find that Scenario PL outperforms Scenario BC in terms of both benefit and profit risk (i.e., mean–variance dominating) when (i) the inventory service level in Scenario PL is sufficiently small and (ii) either the demand volatility is sufficiently large or the loss of goodwill cost is sufficiently large. In the extended models, we first generalize the two-period model to a multiple N-period model. We then explore another case in which the leftover-product-handling effects brought by Scenarios BC and PL are stochastic, and we highlight the impacts of the associated uncertainties. Finally, we consider a third scenario in which leftover products are donated for charity. We find that the main insights derived from the basic model remain robust in all of the extended models. In short, in the sharing economy, with an alternative way of using the product leftovers and consumers commonly treasure sustainability, we argue that luxury brands should no longer destroy product leftovers. Our proposal is also in line with the current measures imposed on the luxury brands by European Union in which it is no longer legal for luxury brands to “burn” the product leftovers.

中文翻译：

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共享经济中的可持续性与排他性：是否应该销毁剩余的奢侈时尚产品？


据报道，在奢侈品行业，Burberry 和 Cartier 等时尚品牌会在销售季结束时销毁剩余产品（情景 BC）。这有助于维护产品的排他性形象，但会造成商誉的损失，因为市场上的消费者通常重视可持续性和责任感。在共享经济中，奢侈时尚品牌可以将剩余产品销售到某些平台并产生收入（场景 PL），但这样做会降低产品排他性的形象。在本文中，我们建立了程式化模型并分析研究了这个操作问题。在基本模型中，我们考虑了奢侈时尚品牌可以在具有确定性剩余产品处理效果的情景 BC 和 PL 之间进行选择的情况。我们发现，当 （i） 情景 PL 中的库存服务水平足够小，并且 （ii） 需求波动足够大或商誉成本损失足够大时，情景 PL 在收益和利润风险（即均值-方差占主导地位）方面都优于情景 BC。在扩展模型中，我们首先将两个周期模型推广到多个 N 周期模型。然后，我们探讨了情景 BC 和 PL 带来的剩余产品处理效应是随机的另一种情况，并强调了相关不确定性的影响。最后，我们考虑第三种情况，即将剩余产品捐赠给慈善机构。我们发现，从基本模型得出的主要见解在所有扩展模型中都保持稳健。简而言之，在共享经济中，通过另一种方式使用产品剩余物，消费者通常珍视可持续性，我们认为奢侈品牌不应再销毁产品剩余物。 我们的提案也符合欧盟目前对奢侈品牌实施的措施，其中奢侈品牌“焚烧”产品剩余物不再合法。