Can Digital Technologies Increase Consumer Acceptance of Circular Business Models? The Case of Second Hand Fashion

Abstract

Experimentation with, and the implementation of, circular business models (CBMs) has gained rapid traction within the textiles and fashion industry over the last five years. Substitution of virgin materials with bioderived alternatives, extending the lifecycle of garments through resale, and rental services and the recycling or upcycling of garments are some of the strategies being used to reduce the 1.2 billion tonnes of greenhouse gas emissions and 92 million tonnes of waste associated with the sector in 2017. However, whilst CBMs demonstrate environmental and economic benefits, low consumer acceptance is considered by business professionals and policymakers to be one of the main barriers to the transition towards a circular economy. Digitisation is widely acknowledged as a catalyst for innovation in many sectors and digital technologies are driving new ways to exchange and share goods and services, enabling companies to match the supply, and demand for, otherwise underused assets and products. Online platforms, in particular, have played a crucial role in driving the growth of used goods and resale in other consumer goods markets, such as consumer technology. A mixed methods approach, including a review of 40 organisations operating second hand fashion models, a consumer survey of over 1200 respondents and in-depth interviews with 10 organisations operating second hand fashion models, is adopted to reveal (a) the barriers to consumer acceptance of reuse models in the fashion industry, and (b) how digital technologies can overcome these barriers. Findings highlight the significant progress that organisations have made in using digitalisation, including data analytics, algorithms, digital platforms, advanced product imagery and data informed customer communications, to address barriers associated with convenience, hygiene, trust and security. Furthermore, the study identifies opportunities for the development of more sophisticated digital technologies to support increased transparency and address concerns associated with the quality, authenticity and sourcing of materials. Positioned at the interface of digitisation and consumer acceptance of circular business models, this study makes an important contribution to understanding consumer barriers and how to address them and concludes with a set of recommendations for practitioners.