[Note: This is the fourth post in our “Papers in Brief” series. This series offers a special service as it explains the core ideas of chosen research papers in a nutshell.]
Papers in Brief (IV) by Kerli Kant Hvass
Kant Hvass, K. (2016): Weaving a Path from Waste to Value: Exploring Fashion Industry Business Models and the Circular Economy. PhD Thesis. Copenhagen Business School.
Kerli’s PhD dissertation examines post-consumer textile waste from the fashion industry’s perspective and addresses how business model innovation can facilitate reuse and recycling of garments and a transition towards a circular economy of fashion. Focusing on the emerging reuse and recycling practices of global fashion brands, the study builds upon one explorative and two in-depth case studies of industry pioneers and their endeavors of integrating reuse and recycling activities in their existing business models. Theoretically the study rests on business models, business model innovation for sustainability, and circular economy. The findings demonstrate that creating value from used products and encouraging sufficiency through reuse and resell can facilitate new value propositions that fashion brands can create, deliver, and capture.
The study provides an unique contribution by synthesizing the theoretical and empirical insights from the field of business model innovation and circular economy in a specific industry context. The findings cover broad industry-level and more specific company-level discoveries. The industry-level findings provide a general understanding of existing reuse and recycling practices among fashion companies and concludes that managing the post-consumer textile waste lacks best practices within business models, supply chain infrastructure, technological solutions, and consumer engagement. A transition towards a circular economy implies full systemic change and innovation not only in business models but also in technologies, society, policies, and finance methods as well as consumer behavior. None of these aspects can work in isolation, requiring that stakeholders work in tandem.
The company-specific findings identify key issues and challenges of integrating a product’s end-of-life aspects in an existing business model. The research highlights important business model innovations that are necessary to consider when transitioning towards a circular fashion business model. These include:
- Companies need to extend the existing value propositions so that they incorporate product’s end-of-life value flows in product or service offerings.
- Circular business models require an extended customer perspective where end consumers are seen as suppliers and value co-producers. This creates a need for customer relationship management throughout a product’s lifecycle (i.e. engagement with customers during pre-purchase, purchase, use and disposal phase of products).
- Companies need to initiate new activities, such as setting up a product return management system, developing reuse and resell platforms, developing closed-loop supply chains for recycling purposes and redistribution channels for reused and recycled products. New activities bring along a need for revised skills, competencies, and procedures, thus organizational learning becomes very relevant. In addition, organizational alignment plays a crucial role in order to integrate the circular thinking in company’s strategy and action plans.
- Building partnerships with wider industry stakeholders in order to synchronize the logistics infrastructure and to assemble different knowledge and skills needed for circular economy solutions. For example, closed-loop fashion is a complex matter with several uncertainties and challenges that span across the entire value chain and therefore partnerships with collectors, sorters and recyclers are needed.
The body of the dissertation comprises of the following research articles:
Kant Hvass, K. (2014): Post-retail responsibility of fashion – a fashion industry perspective, Journal of Fashion Marketing and Management, Vol. 18, No. 4, 413-430. DOI: http://dx.doi.org/10.1108/JFMM-01-2013-0005
Kant Hvass, K. (2015): Business model innovation through second hand retailing: A fashion industry case, Journal of Corporate Citizenship (special issue on New Business Models for Sustainable Fashion), Issue 57, 11-32. DOI: http://dx.doi.org/10.9774/GLEAF.4700.2015.ma.00004
Kant Hvass, K.: A bumpy road towards a closed loop fashion industry: an experience from a Scandinavian fashion brand (under review).
This was an interesting piece of work, but it poses a problem that many of us face when working on innovative business models… we tend to focus on those at the forefront of change, on pioneers shall we say, of which there are few in number and in those we find are modest in their reach. So, how can we generalise in a convincing manner about the examples we find? They may be dismissed as marginal or ephemeral, as will our work, by the wider academic community. Kerli mostly worked with the cases, which is an answer of sorts – engagement with practice as least shows relevance!