“Enabling circular business models in the fashion industry: the role of digital innovation”

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Phuc Hong Huynh
Keyword(s):  
Business Model ◽  
Circular Economy ◽  
Business Models ◽  
Digital Technologies ◽  
Theory And Practice ◽  
Chain Model ◽  
Fashion Industry ◽  
Digital Innovation ◽  
Content Type ◽  
Radical Innovations

PurposeDigital innovation and circular business model innovation are two critical enablers of a circular economy. A wide variety of digital technologies such as blockchain, 3D printing, cyber-physical systems, or big data also diverges the applications of digital technologies in circular business models. Given heterogeneous attributes of circular business models and digital technologies, the selections of digital technologies and circular business models might be highly distinctive within and between sectorial contexts. This paper examines digital circular business models in the context of the fashion industry and its multiple actors. This industry as the world’s second polluting industry requires an urgent circular economy (CE) transition with less resource consumption, lower waste emissions and a more stable economy.Design/methodology/approachAn inductive, exploratory multiple-case study method is employed to investigate the ten cases of different sized fashion companies (i.e. large, small medium-sized firm (SME) and startup firms). The comparison across cases is conducted to understand fashion firms' distinct behaviours in adopting various digital circular economy strategies.FindingsThe paper presents three archetypes of digital-based circular business models in the fashion industry: the blockchain-based supply chain model, the service-based model and the pull demand-driven model. Besides incremental innovations, the radical business model and digital innovations as presented in the pull demand-driven model may be crucial to the fashion circular economy transition. The pull demand–driven model may shift the economy from scales to scopes, change the whole process of how the fashion items are forecasted, produced, and used, and reform consumer behaviours. The paths of adopting digital fashion circular business models are also different among large, SMEs and startup fashion firms.Practical implicationsThe study provides business managers with empirical insights on how circular business models (CBMs) should be chosen according to intrinsic business capacities, technological competences and CE strategies. The emerging trends of new fashion markets (e.g. rental, subscription) and consumers' sustainable awareness should be not be neglected. Moreover, besides adopting recycling and reuse strategies, large fashion incumbents consider collaborating with other technology suppliers and startup companies to incubate more radical innovations.Social implicationsAppropriate policies and regulations should be enacted to enable the digital CE transition. Market patterns and consumer acceptances are considered highly challenging to these digital fashion models. A balanced policy on both the demand and supply sides are suggested. The one-side policy may fail CBMs that entail an upside-down collaboration of both producers and consumers. Moreover, it is perhaps time to rethink how to reduce unnecessary new demand rather than repeatedly producing and recycling.Originality/valueThe pace of CE research is lagging far behind the accelerating environmental contamination by the fashion industry. The study aims to narrow the gap between theory and practice to harmonise fashion firms' orchestration and accelerate the transition of the fashion industry towards the CE. This study examines diverse types of digital technologies in different circular business models in a homogeneous context of the fashion industry with heterogeneous firm types.

scholarly journals From singular to plural: exploring organisational complexities and circular business model design

2019 ◽  
Vol 23 (3) ◽  
pp. 308-326 ◽  
Author(s):  
Esben Rahbek Gjerdrum Pedersen ◽  
Rebecca Earley ◽  
Kirsti Reitan Andersen
Keyword(s):  
Business Model ◽  
Circular Economy ◽  
Business Models ◽  
Illustrative Case ◽  
Fashion Industry ◽  
Value Capture ◽  
Content Type ◽  
Fashion Brand ◽  
New Business ◽  
Multiple Challenges

Purpose The purpose of this paper is to discuss how organisational complexities influence the design of circular business models, which have recently been introduced as a new panacea for aligning the interests of business with the needs of the environment. Design/methodology/approach The Service Shirt, a new garment concept, is used as an illustrative case example for demonstrating some of the organisational complexities of making circular business models operable. The shirt was developed through a series of design workshops for the fashion brand Fashion Alpha. Findings The analysis highlights multiple challenges emerging when a fashion product with a significantly extended lifecycle passes through different users, organisations and business models. It is concluded that it is difficult to talk about a circular business model (singular) as circular economy solutions depend on the contributions of multiple stakeholders with business models. Practical implications The findings illustrate how fashion companies interested in the circular economy fundamentally have to rethink conventional approaches to value, organisational boundaries and temporality. Originality/value Drawing on a case example from the fashion industry, the paper demonstrates the organisational complexities linked to the design of new business models based on circular economy thinking, as these require the coordination of actions between autonomous actors driven by different logics regarding value creation, value delivery and value capture.

The anatomy of circular economy transition in the fashion industry

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sita Mishra ◽  
Sheetal Jain ◽  
Gunjan Malhotra
Keyword(s):  
Business Model ◽  
Value Chain ◽  
Circular Economy ◽  
Business Models ◽  
Closed Loop ◽  
Phase 1 ◽  
Extensive Literature ◽  
Fashion Industry ◽  
Model Framework ◽  
Content Type

Purpose Unsustainable fashion consumption and wasteful practices have recently garnered attention in practice and academia; however, research in this field is limited. This study is based upon an extensive review of the literature and aims to fill this gap by providing an in-depth understanding of various drivers and actors operating in the closed-loop fashion value chain. The purpose of this study is to develop a framework of transformation from the linear economy (LE) to the circular economy (CE) for the fashion industry based on “transition theory.” Design/methodology/approach This study is conducted in two phases. In Phase 1, a bibliographic compilation on the given subject is done. In Phase 2, data about the case company is collected through trade media and semi-structured interviews with the founder and the designers. Findings The study found that key drivers for the closed-loop fashion value chain are collaboration with partners, innovation, waste management system, customer connect and changing utilization patterns. Based on the extensive literature review and analysis of the case study, it can be concluded that to incorporate CE principles, namely, reduce, repair, reuse and recycle into current business models, redefining existing value propositions and transforming various business model elements is essential. Practical implications A three-level (discrete level, aggregator level and the peripheral level) framework is developed that can help the fashion industry in transition from LE to CE. This study will help fashion houses to understand how they can work in tandem with various stakeholders to develop sustainable business models. Originality/value This paper contributes to research by advancing the understanding of how to further develop and redesign an innovative business model framework for the circular fashion value chain. A three-level framework is developed that can be used for transition from LE to CE, especially in the fashion industry. This study is one of the first research that has tried to analyze the Indian case company for CE practices in fashion.

Cognitive biases of consumers as barriers in transition towards circular economy

2019 ◽  
Vol 57 (4) ◽  
pp. 921-936 ◽  
Author(s):  
Poonam Singh ◽  
Elisa Giacosa
Keyword(s):  
Business Model ◽  
Circular Economy ◽  
Business Models ◽  
Cognitive Biases ◽  
Content Type ◽  
Effective Interventions ◽  
Free Transition ◽  
Conceptual Paper ◽  
The Individual ◽  
Practical Implications

Purpose The purpose of this paper is to identify the cognitive biases of consumer and explain how they are creating barriers in transition towards circular economy (CE). Design/methodology/approach This is a conceptual paper which adopts a consumer-centric conceptualization of CE by focussing on cognitive biases as an underlying and unifying mechanism which is creating barriers in the adoption of CE. This conceptualization explains consumers’ non-adoption of circular business model, highlight synergies across disconnected theories and streams of research originating in different disciplines and at the individual, societal and cultural levels of analysis. Findings The findings of this paper suggest that circular business models are not fulfilling the psychological, social and cultural needs of the consumers and that in turn lead to barriers in diffusion of the CE. Consumers have a negative connotation with the different circular business model due to their cognitive biases. Practical implications The paper details about key implications to design effective interventions to modify consumer behaviour in the desired direction for hassle-free transition to CE from the linear economy. Originality/value This paper offers a shift in CE research from a deterministic approach to conceptualising consumers to a positivist approach to conceptualising consumers.

Extreme luxury fashion: business model and internationalization process

2017 ◽  
Vol 34 (3) ◽  
pp. 403-424 ◽  
Author(s):  
Simone Guercini ◽  
Matilde Milanesi
Keyword(s):  
Business Model ◽  
Business Models ◽  
Theory And Practice ◽  
Internationalization Process ◽  
International Expansion ◽  
Foreign Markets ◽  
Content Type ◽  
Positive Side ◽  
Unique Approach

Purpose The purpose of this paper is to identify the defining characteristics of the extreme luxury fashion business model (ELFBM) and the relationship between this business model and the process of firm internationalization. The paper examines the potentially positive outcomes of differences and distances in the internationalization process of extreme luxury fashion companies. Design/methodology/approach The paper presents and discusses the data collected during a five-year case analysis of an Italian luxury company. The main characteristics of the business model are identified in terms of products, manufacturing and sourcing, distribution channels, marketing communications and overall characteristics of consumers. The internationalization process is described, with a focus on the Russian market as an emblematic case, highlighting the role of distances – geographic, psychic and cultural – and liabilities, namely foreignness and outsidership in the international expansion of the firm. Findings The findings of this paper highlight the main features and specific traits of the ELFBM characterized by a global and unique approach to the offer. This business model has in its origin the demand from certain foreign markets, and the elements of the country of origin of the firms coexist and are enhanced by the presence of specific characteristics of the destination countries in terms of niche consumers with economic and cultural characteristics and a strong perception of “Made in” and luxury goods. Originality/value The paper contributes to previous studies on the relationships between business models and internationalization. It provides a framework for the “ELFBM,” in which internationalization is a constitutive element of a specific business model rather than a strategy for a business model already defined. Examining the positive side of differences and distances in the internationalization process of firms adopting such business model, the paper contributes to the international business theory and practice. It also expands research on luxury fashion defining an international company which is under-investigated, the extreme luxury fashion company, and the elements that constitute its business model.

Circular economy business model for smart tourism: the case of Ecobnb

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Pasquale del Vecchio ◽  
Caterina Malandugno ◽  
Giuseppina Passiante ◽  
Georgia Sakka
Keyword(s):  
Business Model ◽  
Value Creation ◽  
Circular Economy ◽  
Business Models ◽  
Business Model Innovation ◽  
Social Implications ◽  
Content Type ◽  
Tourism Management ◽  
Practical Implications ◽  
Smart Tourism

PurposeThe paper aims to shed new light on the process of value creation and business model innovation resulting from circular economy in the context of smart tourism.Design/methodology/approachThe study embraces a qualitative and exploratory approach related to a single case study. Data have been collected through the integration of web-based desk analysis, interviews and social big data analytics.FindingsFindings are related to Ecobnb, a network-based tourism company, coherent with the principles of value creation and business model innovation in the context of circular economy and smart tourism.Research limitations/implicationsThe study allows understanding of how smart tourism and circular economy can represent two important lenses for managing complexity and driving tourism companies and destinations toward sustainable and smart value creation processes.Practical implicationsPractical implications arise for managers and destination makers in terms of innovation of the tourism management and transition of the business models toward a circular configuration.Social implicationsThe study offers social implications by contributing to the dissemination of a culture of sustainability in tourism management and active involvement of local stakeholders in the growth of a tourism destination.Originality/valueThe study provides an original contribution to the debate on tourism by highlighting the obsolescence of traditional models of management in tourism companies and destinations, seen during the recent pandemic emergence, could be solved through the virtuous integration of digital technologies and sustainable approaches.

CIRCULAR ECONOMY: INNOVATIVE AND SUSTAINABLE BUSINESS MODELS IN THE FASHION INDUSTRY

2021 ◽  
Vol 296 (4) ◽  
pp. 25-28
Author(s):  
Olga Garafonova ◽  
◽  
Daria Vietrova ◽  
Olha Marhasova ◽  
◽  
...  
Keyword(s):  
Circular Economy ◽  
Business Models ◽  
Fashion Industry ◽  
Sustainable Business ◽  
Radical Innovations ◽  
Sustainability Strategies ◽  
New Business ◽  
Sustainable Fashion ◽  
The Many ◽  
Key Aspects

Promoting sustainable fashion within the circular economy is an important contemporary topic. Experts in design, consumption, business and industry explain how to approach circularity in fashion production and consumption in different ways. Increasingly, new and existing companies are looking for ways to thrive in a competitive environment through innovative business models, taking into account public opinion and avoiding actions that harm the planet. Trends such as the circular economy, fair trade, and sharing policies are among the many new approaches to business that address these issues, but there is still a gap between the theory that argues for levels of environmental and social sustainability and the implementation of these strategies in practice. That is why the study of the current state of the circular economy is relevant. This article presents the principles of the circular economy in terms of fashion. The key aspects of the integration of sustainable development in the fashion industry are considered. Different approaches of new business models for the circularity of the economy are highlighted. The main directions of implementation of sustainability strategies due to business transformation are identified, which requires the construction of a new level of the system and radical innovations.

scholarly journals Collaborative consumption: business model opportunities and barriers for fashion libraries

2015 ◽  
Vol 19 (3) ◽  
pp. 258-273 ◽  
Author(s):  
Esben Rahbek Gjerdrum Pedersen ◽  
Sarah Netter
Keyword(s):  
Business Model ◽  
Business Models ◽  
Small Scale ◽  
Fashion Industry ◽  
Collaborative Consumption ◽  
Content Type ◽  
New Business ◽  
Multiple Case ◽  
Barriers And Opportunities

Purpose – The purpose of this paper is to explore barriers and opportunities for business models based on the ideas of collaborative consumption within the fashion industry. Design/methodology/approach – The analysis is based on a multiple-case study of Scandinavian fashion libraries – a new, clothes-sharing concept that has emerged as a fashion niche within the last decade. Findings – It is concluded that fashion libraries offers interesting perspectives, e.g. by allowing people to experiment with styles without having to pay the full cost and becoming a meeting place for young designers and end consumers. However, at present fashion libraries remain a small-scale phenomenon with difficulties reaching the mainstream market, not least due to limited financial and human resources as well as conventional fashion consumption patterns. Research limitations/implications – The study is limited to the new phenomenon of fashion libraries and does not cover other types of collaborative consumption within the fashion industry (Swap-parties, etc.). Originality/value – The paper is one of the first attempts to examine new business models of collaborative consumption in general and the fashion library concept in particular. The study contributes to the discussions of whether and how fashion sharing and collaboration holds promise as a viable business model and as a means to promote sustainability.

Managing business model innovation: an innovative approach towards designing a digital ecosystem and multi-sided platform

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nino Bernd Hoch ◽  
Stelian Brad
Keyword(s):  
Business Model ◽  
Business Models ◽  
Design Science ◽  
Digital Technologies ◽  
Business Model Innovation ◽  
Added Value ◽  
Structured Interviews ◽  
Behavioural Science ◽  
Content Type ◽  
Digital Ecosystem

PurposeThis study aims to increase understanding regarding the transformation of traditional business models, integrating digital technologies. The significance of digitisation within business models has increased dramatically in recent years. Because of this, new knowledge on how to transform traditional business models into digital business models in a systematic way is needed. Digital technologies, embedded in previously non-digital goods, force companies to rethink their business models.Design/methodology/approachA design science research methodology was chosen for this study. A literature review and semi-structured interviews served as the theoretical foundation to integrate behavioural science into the design science process. From the design science perspective, an artefact is introduced to provide an architectural framework to manage business model innovation in a systematic way. The artefact's application is demonstrated through a case study conducted at a real company and evaluated afterwards by means of structured interviews with experts.FindingsThe authors propose a highly useable and valuable conceptual framework for systematic business model innovation. However, one limitation of the research is that it was conducted among construction professionals in Germany, and so the result might not hold true for other firms or industry branches.Research limitations/implicationsThe research was conducted among construction professionals in Germany, and this acts as a limitation, as the result might not hold true for other firms or industry branches.Originality/valueThe purpose of this study is to provide managers with a framework for business model innovation, helping them systematically integrate digital technologies to create customer-added value. The proposed framework presents an innovative conceptual analysis of systematic business model innovation, which has not been addressed in prior studies.

Circular business models: level of maturity

2019 ◽  
Vol 57 (4) ◽  
pp. 1043-1066 ◽  
Author(s):  
Simone Sehnem ◽  
Lucila M.S. Campos ◽  
Dulcimar José Julkovski ◽  
Carla Fabiana Cazella
Keyword(s):  
Business Model ◽  
Circular Economy ◽  
Design Methodology ◽  
Service Sector ◽  
Business Models ◽  
Optimal Level ◽  
Model Design ◽  
Biological Cycle ◽  
Socially Responsible ◽  
Content Type

Purpose The purpose of this paper is to analyze circular business models of Brazilian companies. Design/methodology/approach The authors analyzed 105 business models of adopting companies from the perspective of the circularity of resources. These were classified as analytical sector category, business model design aligned with sustainability, sustainable practices adopted, level of maturity of business models and determinants of the circularity of resources. Findings The results show that companies belonging to the service sector predominate, which, above all, offer the virtualization of processes, sharing, ecological products, socially responsible and emphasis on recycling. Of these, 92.38 percent were already aligned with the sustainability assumptions, which contribute decisively to the operationalization in a circular perspective. Therefore, the materialization of the circular economy (CE) in Brazil is occurring, although there is potential for a stronger engagement with the determinants of the CE, especially in the perspective of the biological cycle and in the short cycles of technical levels. Originality/value In addition, the authors promote advances in the maturity levels of business models to optimize the optimal level, where processes are predictable, critically analyzed and continuously improved.

Digitisation and Sustainable Development: The Opportunities and Risks of Using Digital Technologies for the Implementation of a Circular Economy

2021 ◽  
Vol 7 (1) ◽  
pp. 17-23
Author(s):  
Benjamin Kottmeyer
Keyword(s):  
Sustainable Development ◽  
Circular Economy ◽  
Business Models ◽  
Research Question ◽  
Digital Technologies ◽  
Theory And Practice ◽  
Social Outcomes ◽  
Social Progress ◽  
Future Research ◽  
Critical Social

Digitisation is developing a transformational potential that is profoundly changing people, our societies and the planet. Like any major societal transformation, it offers both, significant opportunities for progress and significant risks with harmful consequences for societies. This paper, therefore, addresses the question: ‘What are the critical social outcomes and concerns flowing from the advances in digitisation on our work environment?’ To discuss the broad research question in sufficient depth, this paper focuses not only on specific critical social outcomes of digitisation but also on how some of them can be mitigated by combining digital tools with the concept of a circular economy (representing the abstract idea of sustainable development). The implementation of blockchain technologies and new business models shows that digital technologies have the potential to close the realisation gap between theory and practice of the circular economy concept by enhancing the information flow and the communication between stakeholders in the value chain. Nonetheless, the implementation of these technologies also entails social and economic risks, such as power abuse or regulatory arbitrage, which should be considered in advance. To avoid jeopardising digital innovations, future research should therefore develop a more holistic and interdisciplinary understanding of the complex interactions to exploit the potential of digitisation for social progress.

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