The underground mall: An investigation of factors influencing gray market consumption

Purpose - A dynamic retailing format is emerging in metropolitan cities across the USA: the underground mall (UGM). The UGM is a place of trade where a cluster of socially networked buyers (i.e. potential customers) and sellers (i.e. retailers) meet face-to-face in a private setting (i.e. in the seller's garage or in a neighborhood clubhouse) for the purpose of trade. This study seeks to detail how this unique retailing format operates and examines factors influencing consumption within this gray market. Design/methodology/approach - Two theories were utilized in developing a framework for data collection: gray markets and market embeddedness. Data were collected via in-depth interviews with 16 UGM shoppers. The data were analyzed and interpreted according to the protocol for phenomenology. Findings - A combination of diverse retailing and socialization benefits drives the gray market of the UGM. Retailing benefits include a wide variety of vendors and products, unique items, convenience, a personalized shopping experience, and a comfortable shopping context. Socialization benefits include strengthening interpersonal relationships and building connections within one's community. Research limitations/implications - This study makes an important contribution to the gray marketing literature. The findings illustrate that a combination of diverse retailing and socialization benefits, not price, drives this particular gray market. Originality/value - This research is original to the gray market, market embeddedness, and retailing literatures within the field of marketing. The findings of this study suggest that consumer motives for shopping in the gray market of the UGM are more hedonic than utilitarian in nature.