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Determinants of consumer demand for circular economy products. A case for reuse and remanufacturing for sustainable development

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  • Agnieszka D. Hunka
  • Marcus Linder
  • Shiva Habibi

Abstract

We investigate determinants of consumer demand for circular (reused and remanufactured) products. Based on exploratory choice‐based conjoint experiments with a sample of 800 adults in the United Kingdom, we examine two types of premium segment electronic appliances: a mobile phone and a robot vacuum cleaner. We find that consumers prefer partly circulated products over fully or not at all circulated products and that circular products can likely successfully enter the existing market at the retail price of a new product. Interestingly, circular products compete for market share primarily with new products, leaving the market share of second‐hand options less affected. The results show a promising path for firms considering a transition to circular business models.

Suggested Citation

  • Agnieszka D. Hunka & Marcus Linder & Shiva Habibi, 2021. "Determinants of consumer demand for circular economy products. A case for reuse and remanufacturing for sustainable development," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 535-550, January.
    • Handle: RePEc:bla:bstrat:v:30:y:2021:i:1:p:535-550
    DOI: 10.1002/bse.2636
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    1. Patricia van Loon & Luk N. Van Wassenhove & Ales Mihelic, 2022. "Designing a circular business strategy: 7 years of evolution at a large washing machine manufacturer," Business Strategy and the Environment, Wiley Blackwell, vol. 31(3), pages 1030-1041, March.
    2. Robert H. W. Boyer & Agnieszka D. Hunka & Katherine A. Whalen, 2021. "Consumer Demand for Circular Products: Identifying Customer Segments in the Circular Economy," Sustainability, MDPI, vol. 13(22), pages 1-18, November.
    3. Farheen Naz & Rohit Agrawal & Anil Kumar & Angappa Gunasekaran & Abhijit Majumdar & Sunil Luthra, 2022. "Reviewing the applications of artificial intelligence in sustainable supply chains: Exploring research propositions for future directions," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2400-2423, July.
    4. Arvind Upadhyay & Anil Kumar & Vikas Kumar & Ahmed Alzaben, 2021. "A novel business strategies framework of do‐it‐yourself practices in logistics to minimise environmental waste and improve performance," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3882-3892, December.
    5. Ahsan Siraj & Shilpa Taneja & Yongming Zhu & Hongbing Jiang & Sunil Luthra & Anil Kumar, 2022. "Hey, did you see that label? It's sustainable!: Understanding the role of sustainable labelling in shaping sustainable purchase behaviour for sustainable development," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 2820-2838, November.
    6. Alyahya, Mansour & Agag, Gomaa & Aliedan, Meqbel & Abdelmoety, Ziad Hassan & Daher, Maya Mostafa, 2023. "A sustainable step forward: Understanding factors affecting customers’ behaviour to purchase remanufactured products," Journal of Retailing and Consumer Services, Elsevier, vol. 70(C).

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