Awareness of the fashion industry’s harmful impacts that significantly affect the environment and the society has increased enormously, specifically the problem of an ever-growing throwaway culture. This has led researchers and practitioners to find feasible solutions, dealing with post-consumer garment waste. In that respect, the CE has undoubtedly become the focus of current research. Substantial economic benefits are expected to accompany the transition from a linear to a circular economic model. However, there is still a lack of frameworks that explain how companies have to adapt their BMs in order to succeed in a circular environment. Furthermore, the question remains, if this could be economically feasible from a company perspective because the economic model of the fashion industry is still highly linear and its success depends on product obsolescence.
Therefore, the purpose of this study is to identify motivations, enablers and challenges of implementing circular strategies and PLE initiatives in BMs, and explicitly exploring the economic feasibility of prolonging the lives of products.
To explore these phenomena, pioneers in the field of CE and PLE were studied. The researcher employed an inductive-exploratory case study design that allowed her to investigate the practical implementations of circular approaches and contribute to existing CE and PLE theory.
The findings of the cross-case analysis revealed that the transition towards a CE has been voluntary, underlying the companies’ internal motivations and sustainability agendas. External pressures do not play a role at this moment. Circular approaches support the companies’ visions to realise long-term strategies. Despite the higher costs of circular strategies and PLE initiatives, this study found that these have a positive effect on the businesses regarding enhanced customer loyalty and long-term relationships with the customer.
The study is one of the first academic studies that investigates the economic feasibility of PLE initiatives from a company perspective. However, the findings of this research cannot be generalised, as the scope of the study and the sample size are constricted. Therefore, further research in this field is required.
Table of Contents
1. INTRODUCTION
1.1 Context
1.1.1 The Fashion Industry
1.1.2 The Sustainability Challenge
1.1.3 Circular Economy
1.2 Rationale and Research Questions
1.3 Aim and Objectives
1.4 Research Methodology
2. LITERATURE REVIEW
2.1 Introduction
2.2 Fast Fashion
2.3 The Impact of Fast Fashion
2.3.1 Social Concerns
2.3.2 Environmental Impacts
2.3.3 Opportunities
2.4 The Need for Alternative Business Models
2.4.1 Business Models
2.4.2 (Sustainable) Business Model Innovation
2.5 Circular Business Models
2.5.1 Drivers, Principles and Strategies
2.5.2 Post-retail Initiatives
2.5.3 Service-based Business Models
2.5.4 The Four Resource Loops
2.5.5 The Sources of Circular Value Creation
2.5.6 Circular Business Models
2.6 Circular Economy in the Fashion Industry
2.6.1 Post Retail Initiatives in the Fashion Industry
2.6.2 Circular Business Models in the Fashion Industry
2.6.3 Five Circular Business Models
2.6.3.1 Reuse and Resale
2.6.3.2 Closed Loop & Recycling
2.6.3.3 Repair and Warranty
2.6.3.4 Renting and Leasing
2.6.3.5 Redesign
2.6.4 Conclusion
3. RESEARCH METHODOLOGY
3.1 Introduction
3.2 Philosophical Assumptions
3.3 Research Approach
3.4 Research Design
3.4.1 Case Study Research
3.4.2 Sampling Strategy
3.4.3 Data Collection Techniques
3.4.3.1 Secondary Data
3.4.3.2 Primary Data
3.4.4 Time Horizons
3.4.5 Analysis of Data
3.4.6 Evaluation and Validity of Data
3.4.6.1 Secondary Data
3.4.6.2 Primary Data
3.5 Critical Discussion of the Methodology
3.6 Research Ethics
4. ANALYSIS
4.1 Introduction
4.2 Analytical Approach
5. FINDINGS
5.1 Introduction
5.2 Internal Motivations
5.2.1 Brand Values Shape the Business Strategy
5.2.2 Long-term Strategy
5.3 Enabling Factors
5.3.1 Independence Enables Long-term Goals
5.3.2 Store Presence Enables Story-telling
5.3.3 Human Centered Design/ Design for Longevity
5.3.4 External Enablers
5.4 Challenges and Risk Factors
5.4.1 Lack of Consumer Awareness
5.4.2 Logistic Barriers and Poor Take-back System
5.4.3 Financial Barriers
5.5 Economic Feasibility
5.5.1 Brand-customer Relationship
5.5.2 Service as USP
5.5.3 ROI
5.5.4 Circular Advantage
6. DISCUSSION AND CONCLUSION
6.1 Introduction
6.2 Discussion
6.2.1 Motivations
6.2.2 Enablers
6.2.3 Challenges
6.2.4 Economic Feasibility
6.3 Conclusion
6.3.1 Implications and Recommendations
6.3.2 Limitations and Future Research
7. REFERENCES
Research Objectives and Topics
This dissertation explores how fashion brands can move from a linear "take-make-dispose" model to a circular economy (CE) framework, specifically by evaluating the economic feasibility of product life-span extension (PLE) initiatives. The study investigates the internal and external drivers, barriers, and enablers for implementing circular business models (CBMs) to determine how brands can maintain economic viability while reducing environmental impact.
- Implementation of circular strategies and PLE initiatives in fashion business models.
- Identification of company motivations, organizational enablers, and logistical/financial challenges.
- Economic feasibility and return on investment (ROI) of product maintenance and repair services.
- The impact of long-term business strategies versus short-term profit models on sustainability.
- Customer engagement through physical retail presence as a tool for circularity education.
Excerpt from the Book
2.6.1 Post-retail initiatives in the fashion industry
In order to implement circularity in fashion BMs, there is a strong need to deal with the occurring post-consumer garment waste. Textile waste can be classified into three waste-categories. First, post-producer waste is the waste that occurs as a by-product during the production of clothing (WRAP 2017). Second, pre-consumer waste is caused by retailers when garments are not sold. And finally, post-consumer waste, which is the waste generated by the consumer, when garments are discarded after their use (Kant Hvass 2016). In this paper, the focus lies on post-consumer garment waste.
As mentioned earlier (section 2.5.2) businesses should focus on post-retail initiatives to extend the lives of products, as it is more beneficial in environmental and economic terms (Kant Hvass 2016). Therefore, fashion companies should aim to implement PLE strategies such as repair, reuse, refurbishment and remanufacture in their BMs before considering recycling (Fletcher 2008; Kvant Hass 2014).
Because the waste management field in the fashion industry is still an emerging topic and companies are in the learning process, it is highly fragmented, complex and limited (Kvant Hass 2014). There are two post-retail concepts, the circular and the servitization approach. The circular approach ensures that resources are being circulated in a closed-loop system through garment collection or take-back systems and recycling of the products (Bocken et al. 2015; Kvant Hass 2014; Sitra 2015; Stahel 2016). Companies collect items for recycling. Mass-market brands with more complex supply chains and lower quality products usually apply take-back systems in their BMs and rather recycle products due to the insecurity of the product’s resale value (Kvant Hass 2014).
The servitization approach is concerned with the PLE related to slowing resource loops (Bocken et al. 2015; Kvant Hass 2014; Stahel 2016). Companies develop alternative product utilisation strategies, such as second-hand channels, repair services or renting and leasing models, where the product liability remains with the company (Sitra 2015). This strategy is mostly applied by brands operating in the premium or high fashion segment, because the product’s value usually remains higher due to higher product quality (Kvant Hass 2014). Many companies, however, use a combination of the strategies above.
Summary of Chapters
1. INTRODUCTION: Defines the environmental and economic challenges of the current linear fashion industry and establishes the research focus on circular economy (CE) and product life-span extension (PLE).
2. LITERATURE REVIEW: Explores existing theories on fast fashion, circular business models, and service-based strategies, providing a framework for understanding how product life can be extended.
3. RESEARCH METHODOLOGY: Details the inductive-exploratory approach using multiple-case studies of five pioneering fashion brands, including data collection techniques like semi-structured interviews.
4. ANALYSIS: Explains the analytical framework used to process qualitative data, utilizing Gioia et al. (2012) methodology to bridge raw interview data with theoretical concepts.
5. FINDINGS: Presents the primary empirical results regarding internal motivations, enablers, challenges (such as reverse logistics), and the economic feasibility of circular strategies.
6. DISCUSSION AND CONCLUSION: Synthesizes the empirical findings with current theory, offering recommendations for businesses and identifying limitations and areas for future academic research.
Keywords
Circular economy, Fashion industry, Business model innovation, Product life-span extension, Sustainability, Post-consumer waste, Circular business models, Service-based models, Economic feasibility, Customer loyalty, Reverse logistics, Repair services, Brand values, Long-term strategy, Textile recycling.
Frequently Asked Questions
What is the core focus of this dissertation?
The research examines how fashion brands can transition from linear models to circular economy models, with a specific focus on the practical implementation of product life-span extension (PLE) and its economic viability.
What are the primary themes investigated in the study?
The central themes include internal corporate motivations, key enabling factors for circularity, operational challenges such as reverse logistics, and the economic feasibility of service-based circular strategies.
What is the primary research goal?
The primary goal is to analyze how circular principles are implemented in fashion companies and to determine how brands can capture value through circular strategies and whether prolonging product lives is economically sustainable.
Which scientific methodology was employed?
The researcher used a qualitative, inductive-exploratory approach, conducting multiple-case study research on five pioneering fashion brands through semi-structured interviews and document analysis.
What does the main body of the research address?
The main body covers the theoretical foundation of circular business models, the current impact of fast fashion, the methodology of the multiple-case study, and a cross-case analysis of findings from companies like Nudie Jeans, Fjällräven, and Eileen Fisher.
Which keywords best describe this research?
The most characterizing keywords are Circular Economy, Business Model Innovation, Product Life-span Extension, Economic Feasibility, and Sustainable Fashion.
How does this study address the "paradox" of circularity in the fashion industry?
The study addresses the conflict between the traditional retail model that relies on constant sales and the circular requirement to prolong product use. It finds that companies overcome this by building long-term customer relationships and using repair/maintenance as a unique selling proposition (USP).
Why did the researcher choose private companies for the case studies?
The study indicates that financial independence is a crucial enabling factor. Private ownership allows these brands to focus on long-term sustainability goals without the pressure of quarterly reporting to external investors.
What is the role of the physical store in this research?
Contrary to the trend of closing retail locations, this study finds that physical stores act as vital hubs for customer engagement, storytelling, and education regarding circular products and repair services.
- Quote paper
- Lynn Pearl Mayer (Author), 2018, How can Fashion Brands Enhance Value and Life-Span Extension of Products? An Exploratory Study of Circular Economy in Regard to the Economic Viability of Product Life-Span Extension, Munich, GRIN Verlag, https://www.grin.com/document/495840
