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

Author

Listed:
  • Fiona Charnley

    (Exeter Centre for the Circular Economy, University of Exeter, Rennes Drive, Exeter EX4 4PU, UK)

  • Fabienne Knecht

    (Clariant International Ltd., Hardstrasse 61, 4133 Pratteln, Switzerland)

  • Helge Muenkel

    (Sustainable Finance, DBS Bank, 12 Marina Boulevard, Singapore 018982, Singapore)

  • Diana Pletosu

    (Sustainable Finance, Crédit Mutuel Arkea, Descartes Street, 29480 Le Relecq-Kerhuon, France)

  • Victoria Rickard

    (Victoria Rickard Consultancy, 116, Priory Road, London N8 7HP, UK)

  • Chiara Sambonet

    (Tommy, Jordan House, 47 Brunswick Place, London N1 6EB, UK)

  • Martina Schneider

    (RSchneider, Weg am Schaechle 5, 78144 Schramberg, Germany)

  • Chunli Zhang

    (WeeKett Ltd., 64a Cumberland Street, Edinburgh EH3 6RE, UK)

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.

Suggested Citation

  • Fiona Charnley & Fabienne Knecht & Helge Muenkel & Diana Pletosu & Victoria Rickard & Chiara Sambonet & Martina Schneider & Chunli Zhang, 2022. "Can Digital Technologies Increase Consumer Acceptance of Circular Business Models? The Case of Second Hand Fashion," Sustainability, MDPI, vol. 14(8), pages 1-21, April.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:8:p:4589-:d:791927
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    References listed on IDEAS

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    1. repec:zib:zbmbmj:v:2:y:2023:i:2:p:114-123 is not listed on IDEAS
    2. Wang, Chao & Zhang, Xuemei & Hu, Xiaoqian & Lim, Ming K. & Xu, Yuanhong & Chang, Ping-Chen & Ghadimi, Pezhman, 2025. "Dynamics and drivers of global secondhand clothing trade: Implications for sustainable energy and circular economy in fashion," Renewable and Sustainable Energy Reviews, Elsevier, vol. 209(C).
    3. Xiao Han & Yang Zheng, 2022. "Driving Elements of Enterprise Digital Transformation Based on the Perspective of Dynamic Evolution," Sustainability, MDPI, vol. 14(16), pages 1-19, August.
    4. Sebastian Schroedel, 2023. "The Sustainable Business Model Database: 92 Patterns That Enable Sustainability in Business Model Innovation," Sustainability, MDPI, vol. 15(10), pages 1-27, May.
    5. Xiaoke Wang & Zhaohui Wang & Hengtao Li, 2024. "Quality Evaluation and Optimization of Idle Goods Swap Platform Based on Grounded Theory and Importance–Performance Analysis," Sustainability, MDPI, vol. 16(21), pages 1-15, October.
    6. Yanwen Ruan & Yingjiao Xu & Hanna Lee, 2022. "Consumer Motivations for Luxury Fashion Rental: A Second-Order Factor Analysis Approach," Sustainability, MDPI, vol. 14(12), pages 1-16, June.
    7. Lyndsay Mesjar & Karen Cross & Yang Jiang & Josie Steed, 2023. "The Intersection of Fashion, Immersive Technology, and Sustainability: A Literature Review," Sustainability, MDPI, vol. 15(4), pages 1-22, February.
    8. Rui Jorge Carreira & José Vasconcelos Ferreira & Ana Luísa Ramos, 2023. "The Consumer’s Role in the Transition to the Circular Economy: A State of the Art Based on a SLR with Bibliometric Analysis," Sustainability, MDPI, vol. 15(20), pages 1-19, October.
    9. ShivamKrishn Agrawal & Vijay Kumar Jain & Hemraj Verma, 2025. "Navigating the Circular Transition: The Pivotal Role of Dynamic Capabilities in Enabling Circular Business Models and Firm Performance," Circular Economy and Sustainability, Springer, vol. 5(2), pages 751-775, April.
    10. Pei-Hsin Lin & Wun-Hwa Chen, 2022. "Factors That Influence Consumers’ Sustainable Apparel Purchase Intention: The Moderating Effect of Generational Cohorts," Sustainability, MDPI, vol. 14(14), pages 1-14, July.

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