GROUP NO 7

BHARGAVI JAIN
PG3 – ROLL NO 148

LITERATURE REVIEW: “Evaluation of emerging circular economy

business models and their suitability for luxury brands"

1) Circular fashion: evolving practices in a changing industry

A) future research should broaden our understanding by investigating the proposed
pathways to strategically incorporate design-driven actions to become adoptable
guidelines for the growing number of companies working in this field.
B) research directions toward circular fashion should focus on establishing a clearer
picture of how an industrial ecosystem based on positive synergies influences the
sector experiences toward closed loops.
2) Social sustainability in an evolving circular fashion industry: identifying and
triangulating concepts across different publication groups
A) there is no clear benchmark of best circularity practice or a clear and quantitative
target that could be attained.
3) Can Fashion Be Circular? A Literature Review on Circular Economy Barriers,
Drivers, and Practices in the Fashion Industry’s Productive Chain
a) However, more research is still needed to identify CE initiatives, drivers and
barriers In the fashion industry, since this sector continuously changes, thus
making informational Updates necessary on the matter.
b) Identify main causes that drive consumption habits towards or away from
sustainable fashion practices.

4) The Circular Fashion Economy A Case Study on the Role of Unsold Apparel in
Circular Strategies
a) practitioners have however expressed critique towards the CE and mean that it
should take on a more holistic approach and include all three dimensions of
sustainability.
b) pointed out that some interpretations of CE miss out on important concepts, such
as lack of connection to the waste hierarchy.

5) Investigating the challenges of applying the principles of the circular economy in

the fashion industry: A systematic review
a) the categorization of aspects in this paper relies on the interpretation of the meaning of
the data and information based on the description provided for both aspects, hence may
not be fully accurate.
b) he use of PRISMA and systematic reviews could encounter bias analysis since the
selection of publications is usually influenced by the author’s view to promote a specific
idea.
c) this paper prompts the need for future empirical research, thus this paper could be used
as a guideline for the empirical research for other researchers to further explore and test.
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d) Finally, future research should consider the context, location, demographics, and
culture of the practitioners while analyzing the data since these factors have massive
influence on the key findings of the research.
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RAHUL THAPLIYAL
ROLL NO- 181

From Waste to Luxury Fashion at Elvis & Kresse: A Business Model for Sustainable
and Social Innovation in the Circular Economy

This is a research article about a luxury fashion brand called Elvis & Kresse that uses waste
materials to make its products. The company was founded with the goal of preventing fire
hoses from ending up in landfills. Elvis & Kresse uses a circular business model, which
means that it takes materials that would otherwise be thrown away and turns them into new
products. The company also donates half of its profits to social causes. Elvis & Kresse’s
business model is based on the idea that sustainability can be profitable. The company has
been successful in spreading its innovation through word-of-mouth and ethical reputation

About the Problem:

 100 million tons of waste gets dumped in landfills in the UK every year (2004).
 The company focuses on rescuing waste materials like decommissioned fire hoses and
leather scraps.
Their Story and Business Model: [rescue-transform-donate model]
 Started with rescuing and transforming fire hoses into luxury accessories.
 A small batch production model that helps to avoid overproduction and waste
 A focus on using recycled and sustainable materials
 Transformed leftover leather scraps into new hides using a circular economy
approach.
 Give 50% of profits to charity (firefighter charities for fire hoses, renewable energy
projects for leather).
 A commitment to ethical labour practices
 Transparent business practices: open book accounting, anyone can visit their facilities.
 Certified B Corp, committed to social good and sustainability.
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Key Determinants of Luxury Marketing Accordant with Sustainability-Oriented Value
Perspectives

This literature has several objectives, which can be summarized as follows:

 To understand the changing definition of luxury in the context of sustainability
 To identify key determinants of sustainable luxury
 To offer managerial recommendations for tradition-bound luxury firms
 To define a new understanding of sustainable luxury
 To highlight the importance of sustainability for the future of luxury
The changing definition of luxury: Traditional luxury values like rarity and exclusivity are
being challenged by new forms of luxury that emphasize sustainability, access, and
participation. This is partly due to the rise of mindful consumers and changing values,
particularly among Gen Z.

The key determinants of sustainable luxury: The paper identifies six key determinants based
on three sustainability-oriented value perspectives: value-in-reuse (resaleability, emotional
durability, recyclability), value-in-access (traceability), and value-in-participation
(localization, reportability). These determinants provide a framework for luxury brands to
transform their traditional marketing strategies into sustainable ones.

The rise of new business models: Sustainable luxury is driving the growth of new business
models like second-hand platforms, rental services, and subscription boxes. These models
offer consumers more sustainable ways to access luxury goods without ownership.

The importance of transparency and traceability: Consumers are increasingly demanding

information about the provenance and environmental impact of luxury goods. Brands are
responding by using technologies like blockchain to improve traceability and transparency.

Overall, this paper provides a valuable overview of the current state of sustainable luxury and
the challenges and opportunities facing the industry. Sustainability is becoming an
increasingly important aspect of luxury, and brands that can adapt their strategies to meet the
needs of mindful consumers will be the ones that succeed in the future.
The authors propose key actions for traditional luxury brands to embrace sustainable
practices:
 External Collaborations: Collaborate with external providers to ensure authenticity
and value in second-hand markets.
 Emotional durability: Design products that foster strong emotional bonds with
consumers, reducing consumption and waste.
 Recyclability: Introduce select eco-friendly lines while maintaining luxury, like
Prada and Armani.
 Localization: Highlight local production and craftsmanship, resonating with ethical
consumerism
 Sustainability reporting: Document sustainability efforts through metrics like pre-
owned sales figures, going beyond ESG reporting.
 Leveraging technology: Utilize blockchain to enhance supply chain transparency,
product history, and authenticity, preventing counterfeiting.
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Corporate Social Responsibility as a Sustainable Business Practice: A Study among Generation
Z Customers of Indian Luxury Hotels

The objective of this research article is to explore and understand the relationship between
Corporate Social Responsibility (CSR), the green image of hotel brands, and customers'
willingness to pay a higher price, with a specific focus on Generation Z (Gen Z) customers.

The article argues that an integrated stakeholder approach enhances a firm's brand image,
particularly among Gen Z customers. CSR activities, when embedded in a hotel's operations,
can lead to a positive green image and higher willingness to pay among customers.

The hypotheses development section presents 4 main hypotheses:

Hypothesis 1 (H1): Perceived CSR positively affects the green image of a hotel brand.
This hypothesis suggests that if customers perceive a hotel as being socially responsible
(engaged in Corporate Social Responsibility), it will lead to a positive perception of the
hotel's environmental or "green" image.
Hypothesis 2 (H2): Green image of a hotel brand positively affects customers' willingness to
pay a higher price.
This hypothesis proposes that a positive green image, which customers form based on the
hotel's environmental initiatives, will result in customers being more willing to pay a higher
price for the hotel's services.
Hypothesis 3 (H3): Perceived CSR positively affects customers' willingness to pay a higher
price.
This hypothesis suggests that customers who perceive a hotel as socially responsible (CSR
initiatives) will demonstrate a higher willingness to pay a premium for the hotel's offerings.
Hypothesis 4 (H4a, H4b, H4c): The effect of perceived CSR on the green image of a hotel
brand is stronger for women than men (H4a). The effect of the green image of a hotel brand
on customers' willingness to pay a higher price is stronger for women than men (H4b). The
effect of perceived CSR on customers' willingness to pay a higher price is stronger for
women than men (H4c).

Additionally, the study proposes a moderating role of gender, suggesting that the effect of
perceived CSR on the green image, the effect of the green image on willingness to pay, and
the effect of perceived CSR on willingness to pay are stronger for women than men.

The methodology outlines the measures used, including multi-item scales adapted from
previous studies, and the sample collection process.
Pilot test involving 25 respondents, comprising both bachelor's and master's students with
prior experience in luxury hotels, was conducted to ensure the clarity and appropriateness of
the questionnaire. The questionnaire employed a seven-point Likert scale, ranging from '1'
(strongly agree) to '7' (strongly disagree).

A total of 500 questionnaires were distributed among customers of 10 luxury hotels, with 50
questionnaires per hotel. Out of the 500, 338 Gen Z customers returned completed surveys.
After excluding responses with missing values or careless responses, the final sample for
analysis comprised 302 responses (167 males and 135 females)
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The practice of sustainable fashion of luxury boutique fashion brands in Vietnam:
What go right, and what go wrong

The objective of the article is to explore the sustainable fashion practices of luxury boutique
fashion brands in Vietnam and to highlight the positive impacts of these practices, as well as
the challenges they face. The article also discusses some future strategies for these brands.
A series of in-depth interviews with 20 founders and managers of luxury boutique fashion
brands (LBFBs) in Vietnam was conducted.

Positive Impacts
Cultural Preservation:
 Brands like De La Mode and Xuan Trang Design integrate ethnic textiles,
embroidery, and motifs, raising awareness and appreciation for Vietnamese traditions.
 Collaboration with local artisans strengthens cultural identity and provides income
opportunities.
Environmental Consciousness:
 Use of organic fabrics like silk and bamboo reduces dependence on synthetic
materials and promotes sustainable agriculture.
 Upcycling and repurposing pre-loved materials lower waste and extends garment
lifecycles.
 Ethical sourcing of materials minimizes ecological damage and ensures fair treatment
of workers.
Economic Benefits:
 Sustainable practices attract eco-conscious consumers, expanding market reach and
brand loyalty.
 Support for local artisans and communities stimulates micro-economies and promotes
fair trade.
Social Impact:
 Empowering women through employment and skills development, particularly in
rural areas.
 Promoting ethical labour practices throughout the supply chain.
Challenges
Resource Constraints:
 Limited access to funding and technology hinders investments in sustainable
technologies and materials.
 Smaller production volumes restrict negotiating power with suppliers, potentially
leading to higher costs for eco-friendly materials.
Consumer Perception:
 Misconceptions about the quality, durability, and aesthetic appeal of sustainable
fashion.
 Higher price points compared to mass-produced clothing can deter budget-conscious
consumers.
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Lack of Awareness:
 Limited marketing and outreach resources make it difficult to reach potential
customers interested in sustainable luxury.
 Need for education and awareness campaigns to dispel myths and highlight the true
value of sustainable fashion.

Future Strategies
 Collaboration and knowledge sharing: Building networks with other sustainable
brands, NGOs, and research institutions can provide resources and expertise.

 Transparency and communication: Educating consumers through engaging

storytelling and showcasing the positive impacts of sustainable practices.

 Innovation and technological advancements: Investing in research and development to

create more affordable, durable, and aesthetically pleasing sustainable materials and
production processes.

 Partnerships with larger brands: Collaboration with established luxury houses can
increase visibility and influence consumer perception.

 Government support: Policy incentives and infrastructure development can create a

more enabling environment for sustainable fashion businesses.
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Sustainable strategies in the luxury business to increase efficiency in reducing carbon
footprint

The fashion industry, particularly luxury brands, faces increasing pressure to adopt
sustainable practices due to environmental concerns and shifting consumer preferences. This
article focuses on two major European luxury conglomerates, LVMH and Chanel, and their
efforts to balance sustainability with economic performance.

Analysis of actions and impacts:

The article examines how LVMH and Chanel implement sustainable actions, such as
reducing energy consumption, minimizing waste, and sourcing eco-friendly materials.
It then analyses the carbon footprint of each company using the IPCC methodology,
considering emissions across their entire value chain.

The IPCC (Intergovernmental Panel on Climate Change) guidelines to quantify greenhouse

gas emissions, which typically involves:
 Identifying emission sources (e.g., manufacturing, transportation, energy use)
 Applying emission factors (conversion rates for different activities)
 Calculating total emissions for each source and for the entire value chain
Additionally, the article investigates the relationship between these sustainable actions,
carbon footprint, and the companies' economic results (revenue and market share).

Key findings and implications:

The study reveals a direct relationship between market share and CO2 emissions for both
companies. However, interestingly, the rate of emission growth slows down at higher market
shares.

This suggests potential economies of scale in environmental impact for larger luxury
conglomerates. They may become more efficient in controlling pollution per unit produced as
their market share increases.

This finding has significant implications for the future of sustainability in the luxury sector. It
raises the possibility that a smaller number of larger, more efficient producers could lead to a
more environmentally responsible industry overall.

Investing in sustainability can not only help the planet but also boost a company's bottom line
by being eco-friendly to attract customers, reduce waste and costs, and even lead to tax
benefits.

However, the article also acknowledges limitations and areas for further research. For
example, the role of transportation emissions and the accessibility of resources for smaller
companies require deeper investigation.
 GROUP NO 7
RITIKA JHA(PG186)

Literature Review- Evaluation of emerging circular economy

business models and their suitability for luxury brands"

1) Luxury in the Circular Economy

The Article discusses on the compatibility of luxury brands with circular economic
principles and how they can incorporate circular economy principles into their
business models while retaining their perception of exclusivity, craftsmanship, and
heritage. The article also explores the potentials and pitfalls of the circular economy
to allow luxury brands to enhance their sustainability practices in a way that is aligned
with the luxury strategy.
some gaps and factors that the article misses-
a) the article does not provide a detailed analysis of the challenges that luxury brands
face when implementing circular economy principles.
b) the article does not provide a detailed analysis of the impact of circular economy
principles on the luxury brand’s supply chain.
c) the article does not provide a detailed analysis of the impact of circular economy
principles on the luxury brand’s pricing strategy.
d) the article does not provide a detailed analysis of the impact of circular economy
principles on the luxury brand’s marketing strategy.
Though, the article is well-written and provides a comprehensive overview of the
circular economy and its potential for luxury brands, future research should focus on
addressing these gaps and factors to provide a more comprehensive understanding of
the impact of circular economy principles on luxury brands.

2) Driving Circular Business Models in Fashion

This article provides a detailed analysis of three circular business models (Rental,
Subscription-Rental, and Recommerce) across four industry segments (Value Market,
Mid-Market, Premium, and Luxury). The study aims to assess the financial viability
of circular business models in the fashion industry and identify where circular models
are attractive today and some of the critical levers to enhance their viability in the
future. They have provided a comprehensive overview of the three circular business
models and their potential to drive positive impact across the fashion value chain. The
authors of the article have done an excellent job of analyzing the financial viability of
circular business models in the fashion industry. However, the authors have not
considered some factors that could impact the financial viability of circular business
models in the fashion industry.
some gaps and factors that the article misses-
a)the study does not consider the impact of changing consumer preferences on the
adoption of circular business models.
b) the study does not consider the impact of regulatory changes on the adoption of
circular business models.
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In conclusion, the article provides a comprehensive analysis of the financial viability
of circular business models in the fashion industry. However, the authors have not
considered some factors that could impact the financial viability of circular business
models in the fashion industry. Future research should consider these factors to
provide a more comprehensive understanding of the financial viability of circular
business models

3) Business Model Innovation for Circular Economy in Fashion

This article explores the key elements of startups’ Business Model Innovation for
Circular Economy (BMI4CEs) using the fashion industry as the context of the study.
The authors aim to identify the critical elements needed for the effectiveness of
BMI4CEs.The authors have done an excellent job of identifying the key elements of
startups’ BMI4CEs. They have provided a comprehensive overview of the
environmental and economic sustainability dimensions. The study also highlights the
differences between product-based and service-based Business Models (BMs) and
how they impact the Business Models Innovations (BMIs). The BMIs were based
mainly on circular economy principles of closed-loop and reducing material use and
consumption. BMs focus on circular economy strategies of product reuse and extend
resource time by lowering consumption and material use. The study also demonstrates
the role of emerging and digital technologies (e.g., blockchain and artificial
intelligence) for BMI4CEs effectiveness. However, the authors have not considered
some factors that could impact the effectiveness of BMI4CEs. some gaps and factors
that the article misses-
a) Lack of awareness- among consumers about circular business models. This could
lead to a lack of demand for circular products and services.
b) High costs- associated with implementing circular business models in luxury
brands.
c) Complexity- of implementing circular business models in luxury brands.

In conclusion, the article provides a comprehensive analysis of the key elements of

startups’ Business Model Innovation for Circular Economy (BMI4CEs). Future
research should consider these factors to provide a more comprehensive
understanding of the effectiveness of BMI4CEs in the fashion industry.

4) “A Review and Evaluation of Circular Business Model Innovation Tools”

This article talks about circular economy (CE) that has been recognized as a potential
driver for sustainable development by business, academia, and policymakers. In a
future circular economy, new business models are needed that slow, close and narrow
resource loops to address key resource and climate challenges. This paper focuses on
the circular business model lens as a comprehensive way of addressing business
innovation. Within this evolving circular economy operationalization phase, several
tools, approaches and methods are emerging that could support circular business
model innovation. The circular economy (CE) is an alternative paradigm to the
current ‘take-make-dispose’ linear economy to help slow, close and narrow resource
loops.The operationalization phase will involve the development of products,
processes and business models that significantly lower the negative impact on the
environment, reduce waste and resource pressures and, rather, create a positive impact
 GROUP NO 7
on society and environment. It provides structure to the emerging range of tools,
methods and approaches, and, based on this, a guideline for future tool development.
some gaps and opportunities for future research and practice-
a)the tools were focused on the design and implementation of circular business
models, however they lacked tools for the evaluation of circular business models.
b) tools were developed for small and medium-sized enterprises (SMEs). There is a
need for tools that are suitable for large enterprises.
c) tools were focused on the manufacturing sector.
There is a need for tools that are suitable for other sectors such as the service sector.
The articles provided a comprehensive overview of the tools, approaches, and
methods that are emerging to support circular business model innovation, but
working upon the gaps better future development can be made.

5) “Circular Economy Practices in the Fashion Industry”- The study identifies the
drivers, barriers, and practices that influence implementing circular economy concepts
in the fashion industry production chain using a systematic literature review . The
study concludes that some more barriers and criteria keep consumers away from
circular fashion concepts than drivers. These barriers include fast fashion consumer
culture, even though more consumers are environmentally conscious. This is because
awareness has not reached large-scale populations, despite the world being more
aware of social and environmental issues. Consumers still do not see ethical and
ecological problems associated with the fashion industry and continue to be targeted
for large fast fashion retailers that sell a misguided version of consumerism 1. The
study contributes to both academia and new fashion business models that seek to
become more sustainable since it presents opportunities for investments and the
obstacles that must be overcome for reaching CE within this sector 1.
some gaps and opportunities for future research and practice- a)The article did not
consider the impact of the COVID-19 pandemic on the fashion industry. The
pandemic has had a significant impact on the fashion industry, with many businesses
struggling to survive. b)changes in consumer behaviour, with more people shopping
online. These changes may have an impact on the implementation of circular
economy concepts in the fashion industry. Future research could explore the impact of
the pandemic on the fashion industry and its implications for circular economy
practices .

SHUBH VISARIA
ROLL NO- 195

Evaluation of emerging circular economy business models and

their suitability for luxury brands
Literature Review
Paper Name - Enabling circular business models in the fashion industry: the role of
digital innovation
(Huynh, 2021) in the paper named “Enabling Circular Business Models in the Fashion
Industry: The Role of Digital Innovation" explores the intersection of digital technologies and
 GROUP NO 7
circular economy strategies within the fashion industry. Given the environmental challenges
posed by the fashion industry, the study employs an inductive, exploratory multiple-case
study method to investigate ten fashion companies of varying sizes. The findings reveal three
archetypes of digital-based circular business models: blockchain-based supply chain, service-
based, and pull demand-driven models. The pull demand-driven model is highlighted for its
potential to bring radical changes to the fashion economy, influencing forecasting,
production, and consumer behaviors. The study emphasizes the importance of considering
intrinsic business capacities, technological competences, and circular economy strategies
when adopting circular business models. It also suggests collaboration between large fashion
incumbents and technology suppliers or startups to foster radical innovations. The study
emphasizes the need to analyze behaviors, capacities, and technological competencies unique
to each firm type. The paper underscores the need for supportive policies, considering market
patterns, and addressing consumer acceptance challenges in the digital fashion models'
transition.
Gap –
A gap in understanding persists concerning how different-sized fashion companies—large
enterprises, small and medium-sized firms (SMEs), and startups—distinctively adopt and
implement digital circular economy strategies. The study suggests that collaboration between
large fashion incumbents and technology suppliers/startups is essential for incubating radical
innovations. However, the gap lies in understanding the dynamics of such collaborations, the
challenges faced, and how these innovations can be seamlessly integrated into existing
business models.

Paper Name – A Sustainable Business Model for the Fashion Sector

(Salamzadeh et al., 2023) aims to investigate and present sustainable practices within the
fashion industry. Objectives include reviewing the historical context of sustainable fashion,
categorizing types, and proposing business models based on real-world cases. The authors
utilize various methods, such as analyzing facts and figures from multiple cases, to discuss
the evolution of sustainable fashion and its environmental impact. Findings underscore the
significance of sustainable business models in addressing environmental challenges posed by
the fashion industry. Examples of successful implementation illustrate the potential for
reducing waste and promoting ecological responsibility. The historical evolution of
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sustainable fashion as a response to environmental degradation and ethical concerns in the
fashion industry. Early pioneers, such as Esprit and Patagonia, set the stage for the
contemporary sustainable fashion movement. Key events, including the Nike scandal and the
Rana Plaza disaster, heightened global awareness, leading to increased demand for
sustainable alternatives. The authors also highlight the role of technology, particularly
artificial intelligence, in enhancing sustainability efforts within the fashion sector.
Technology is vital in transforming traditional fashion practices toward more sustainable and
environmentally conscious models. The chapter acknowledges the changing consumer
landscape, with a growing emphasis on second-hand platforms and social media influencing
sustainable fashion trends. The conclusion points to existing challenges in adopting
sustainable practices and suggests directions for future research, making the chapter a
valuable resource for those interested in the intersection of sustainability and the fashion
industry.
Gap –
There is a notable lack of in-depth exploration into consumer behavior. Understanding the
factors that drive consumers to choose sustainable fashion products, as well as the barriers
they face, is essential for the successful implementation of sustainable business models.
Author talks about technologies like 3D virtual sampling and artificial intelligence without
thoroughly exploring their adoption challenges, impact assessment, and potential for
scalability.

Paper Name – Online Luxury Resale Platforms and Customer Experiences: A Text
Mining Analysis of Online Reviews

The fashion industry has witnessed a paradigm shift in recent years, marked by a growing
emphasis on sustainability and circular fashion models. Within this landscape, luxury resale
has emerged as a dynamic and rapidly expanding niche, reflecting a shift towards more
conscious consumer behaviors. Major players in the luxury resale market, such as The
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RealReal, ThredUp, Tradesy, and Vestiaire Collective, have played pivotal roles in shaping
the industry's trajectory. These platforms leverage advanced information technologies to
enhance customer experiences and advocate for a sustainable circular economy in the fashion
sector. A central focus of the paper has been the success factors influencing luxury online
resale ( an important principle of circular economy) platforms. These factors include the
curation of appealing brand selections, a reliable authentication process, trustworthy
information, and services that cater to a diverse customer base comprising both sellers and
buyers. Notably, building and maintaining a large and loyal customer base is identified as
critical, with the success of resale platforms hinging on their ability to offer desirable brands
and products derived from customer consignments. While the luxury resale market is
experiencing significant growth, challenges persist in scaling the industry. One notable
challenge is the potential saturation of the consumer base. As consumers inclined towards
resale may have already entered the market, platforms find themselves in competition for a
limited pool of customers. This competitive dynamic poses a hurdle to the industry's
scalability, necessitating a deeper understanding of how consumers engage with luxury resale
platforms and what factors influence their value perceptions. (Liu, Xia and Lang, 2023).
Gap –
The paper does not delve deeply into the motivations behind consumers' engagement in
circular fashion consumption on luxury resale platforms. Specifically, there is a gap in
understanding how economic, environmental, and experiential values influence consumers'
decisions to buy or sell pre-owned products.

Paper Name - Sustainability and Quality Management in the Italian Luxury Furniture
Sector: A Circular Economy Perspective

The study on the luxury furniture industry's adoption of Circular Economy practices
highlights a substantial awareness of sustainable principles among luxury companies.
Motivations for Circular Economy adoption primarily focus on economic and environmental
benefits, indicating a partial understanding of the potential social impact. The role of product
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and process certifications is recognized but underutilized, with limited application by luxury
companies. The study emphasizes the need for a cultural shift within companies, internal
training, and improved communication to bridge the implementation gap. Recommendations
include the use of recyclable materials, internal training for cultural change, and
communication strategies to inform consumers about Circular Economy efforts. Future
research directions include exploring end-of-life product applications and assessing
circularity levels through criteria and indicators (Barbaritano, Bravi and Savelli, 2019).
Gap –
Though there is acknowledgement about awareness of the circular economy practices in
luxury furniture industry but reveals a gap in practical implementation, particularly in reuse
and recycling actions. There is gap in positive attitude towards sustainable practices and its
implementation. There is scope qualitative analysis and explorative research, particularly in
the under-explored area of Circular Economy applications during the end-of-life phase of
luxury furniture products. There is scope to identify organizational shifts that are required to
facilitate the development of Circular Economy practices.

Paper Name – Trends in the Fashion Industry. The Perception of Sustainability and
Circular Economy: A Gender/Generation Quantitative Approach

(Gazzola et al., 2020) investigates that the fashion industry has undergone significant changes
in recent years, driven by shifts in the competitive landscape and transformations in consumer
lifestyles. These changes necessitate a reevaluation of business models to adapt to emerging
trends. Two key factors influencing the industry's evolution are sustainability and the circular
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economy. The younger generations, particularly Generation Z, exhibit a growing awareness
and concern for these issues, shaping their perceptions of the fashion world. Study focuses on
examining the role of sustainability and circular economy principles as significant
phenomena influencing the fashion market and drivers for long-lasting competitiveness and
to explore how sustainability and circular economy principles are perceived by the new
generations of consumers, considering both demand and supply aspects. There is a utilization
of a mixed method approach, combining qualitative and quantitative data collection and
analysis methods to provide a comprehensive understanding of the research questions.
It is being found that younger generations, particularly Generation Z, demonstrate a
heightened focus on sustainability, influencing their preferences and purchasing decisions in
the fashion industry, gender differences play a role in the perception of sustainability in
fashion, with female respondents showing a preponderance in assigning importance to
sustainability issues. Fashion companies can implement circular policies by adopting suitable
business models, by extending product lifecycles through recovery and reuse.
Gap –
The study mentions the need for fashion companies to redirect their strategic approach, but
there is limited exploration of specific business models that align with sustainability and
circular economy principles.

Reference list

Barbaritano, M., Bravi, L. and Savelli, E. (2019). Sustainability and Quality Management in
the Italian Luxury Furniture Sector: A Circular Economy Perspective. Sustainability, 11(11),
p.3089. doi:https://doi.org/10.3390/su11113089.
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Gazzola, P., Pavione, E., Pezzetti, R. and Grechi, D. (2020). Trends in the Fashion Industry.
The Perception of Sustainability and Circular Economy: A Gender/Generation Quantitative
Approach. Sustainability, 12(7), p.2809. doi:https://doi.org/10.3390/su12072809.

Huynh, P.H. (2021). ‘Enabling circular business models in the fashion industry: the role of
digital innovation’. International Journal of Productivity and Performance Management,
71(3), pp.870–895. doi:https://doi.org/10.1108/ijppm-12-2020-0683.

Liu, C., Xia, S. and Lang, C. (2023). Online Luxury Resale Platforms and Customer
Experiences: A Text Mining Analysis of Online Reviews. Sustainability, 15(10), p.8137.
doi:https://doi.org/10.3390/su15108137.

Salamzadeh, A., Paramba, J.N., Brandstrup, M. and Dana, L.-P. (2023). 19 A Sustainable
Business Model for the Fashion Sector. Fashion and Environmental Sustainability, pp.237–
250. doi:https://doi.org/10.1515/9783110795431-019.

AYUSHI
ROLL NO- 147

1.Product design and business model strategies for a circular economy :

Nancy M. P. Bockena,b *, Ingrid de Pauwc , Conny Bakkera and Bram van der Grintenc
Literature Review:- Resource cycles: slowing, closing, and narrowing loops-
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(1) Slowing resource loops: Through the design of long-life goods and product-life
extension i.e. service loops to extend a product’s life, for instance through repair,
remanufacturing, the utilization period of products is extended and/or intensified, resulting in
a slowdown of the flow of resources.
(2) Closing resource loops: Through recycling, the loop between post-use and production is
closed, resulting in a circular flow of resources.
(3) Resource efficiency or narrowing resource flows, aimed at using fewer resources per
product. Resource efficiency is not aimed at the cyclic use of products and materials, but an
approach to reduce resource use associated with the product and production process.
4. “Designing for attachment and trust” refers to the creation of products that will be
loved, liked or trusted longer. This is also referred to as “design for emotional durability”.
5. Design for a technological cycle:- When designing for a technological cycle, designers
aim to develop products in such a way that the materials can be continuously and safely
recycled into new materials or products. To establish continuous flow of resources in the
technological cycle, the “waste” resources are to be recycled into material having properties
equivalent to those of the original material.
6. Design for a biological cycle:- With this strategy, products of consumption are designed
with safe and healthy materials (“biological nutrients”) that create food for natural systems
across their life cycle.
7. Design for Disassembly and reassembly is a strategy, that is about ensuring that products
and parts can be separated and reassembled easily.
8. Access and performance model: This business model allows companies to capture
financial benefits for going circular, which they would not be able to achieve in a linear
model. For example, additional costs for life extension are offset by additional revenues,
because the company can use the product longer.

2. Trends in the Fashion Industry. The Perception of Sustainability and Circular

Economy: A Gender/Generation Quantitative Approach (2020)
Patrizia Gazzola 1,* , Enrica Pavione 1 , Roberta Pezzetti 1 and Daniele Grechi
This study delves into the evolving landscape of the fashion industry, highlighting
sustainability and circular economy principles as pivotal forces shaping business models.
With a global industry value of 1.3 trillion dollars, the fashion sector navigates heightened
uncertainty and geopolitical instability, requiring adaptation to diverse consumer
demographics. The research emphasizes the increasing significance of sustainability,
particularly among younger generations, challenging assumptions about Generation Z's
preferences. Conducting a survey with Insubria University, the study unveils gender-based
differences, indicating a stronger association of females with sustainable fashion. Despite
prevailing literature trends, the research intriguingly finds no significant age-related
distinctions within the sample. The findings underscore the strategic role of sustainability in
the industry's long-term competitiveness and advocate for a paradigm shift towards
integrating social responsibility.
3. Designing the Business Models for Circular Economy—Towards
the Conceptual Framework
Mateusz Lewandowski
Mateusz Lewandowski's (2016) research explores the transition from a linear to a circular
economy, emphasizing the need for comprehensive knowledge on designing circular business
models. While major global companies and policymakers increasingly focus on circular
economy principles, smaller companies require guidance to implement these models
effectively. The study conducts a literature review to identify circular economy
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characteristics and redefines business model components through the lens of circularity. Two
new components, the take-back system and adoption factors, emerge, leading to the
conceptualization of an extended framework—the Circular Business Model Canvas (CBMC).
The study recognizes the triple fit challenge as crucial for transitioning to a circular business
model. The proposed CBMC, consisting of eleven building blocks, contributes to practical
implementation and accelerates the shift from linearity to circularity at the micro-level.
4. Remodelling fashion via circular economy driven luxury concept
Pyry Kuivanen
Pyry Kuivanen (Year 2016) explores the integration of fashion and the circular economy,
with a focus on luxury brands and their potential to drive transformative change. In the linear
economy, product life cycles contribute to waste and excessive resource consumption, while
circular economy principles aim to optimize efficiency and promote reuse. Kuivanen argues
that luxury brands may benefit from challenges posed by sustainability requirements in the
circular economy, emphasizing durability, timeless qualities, and second-hand market value.
The study suggests that exclusive prestige brands could lead the transformation, capitalizing
on increased costs and regulations related to sustainable development. Through a case study
of renting and leasing models, Kuivanen examines the identity of circular economy-driven
luxury brands, revealing insights into consumers' latent values and attitudes toward
sustainable luxury.
5. INNOVATIVE CIRCULAR BUSINESS MODELS IN THE
FINNISH CLOTHING SECTOR
Salla Neuman
Salla Neuman's (2021) master's thesis investigates the implementation of circular business
models (CBMs) in the Finnish clothing sector, focusing on 65 manufacturing companies. The
study contributes to addressing sustainability challenges, particularly in the textile industry
known for its negative environmental impacts. Neuman identifies various CBM types, such
as long-life models, sufficiency encouragement, repair services, extending resource value,
and service-based models. The findings reveal that sustainability as a core value, increasing
awareness, supportive customers, and high-quality items act as enablers for CBM
implementation. Challenges include communicating circularity and finding information on
circular practices. The study proposes a framework mapping possible CBM types for
manufacturing clothing companies, contributing to both theoretical and practical
understanding of CBM implementation in the context of textiles and clothing.

Gap

1. Bocken et al. (2016):

 Potential Gap: While this review discusses strategies for transitioning to a
circular economy, it may lack a specific focus on luxury brands. The
framework proposed may need to be evaluated for its relevance and
effectiveness in the luxury sector.

2.Gazzola et al. (2020):

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 Potential Gap: The study emphasizes sustainability in the fashion industry,
but there might be a gap in addressing the specific needs and challenges faced
by luxury brands in adopting circular business models.

3. Mateusz Lewandowski (2016):

a. Potential Gap: Although the study introduces the Circular Business
Model Canvas (CBMC), it might not specifically delve into how this
framework applies or needs modification when implementing circular
business models in the luxury segment.
4. Pyry Kuivanen (Year 2016):
a. Potential Gap: Kuivanen explores the integration of fashion and the
circular economy, but there could be a gap in understanding how the
challenges and opportunities outlined apply uniquely to luxury brands
within the fashion sector.
5. Salla Neuman's Thesis (2021):
a. Potential Gap: The thesis focuses on the implementation of circular
business models in the Finnish clothing sector. However, there may be a
gap in understanding how the findings translate to luxury brands, which
often have distinct characteristics and consumer expectations.
Common Potential Gap Across Reviews:

 Luxury Brand Focus: None of the literature explicitly focuses on the suitability,
challenges, or opportunities of circular business models for luxury brands. There
might be a gap in understanding how the unique nature of luxury products and
consumer expectations align with or differ from the broader fashion industry.
Overall Gap Summary: The potential gap in the existing literature revolves around the
specific evaluation of circular economy business models concerning luxury brands. There's a
need for research that addresses the unique challenges, opportunities, and modifications
required for implementing circular strategies in the context of luxury fashion.
For your research, consider exploring how circular economy models can be tailored to meet
the distinctive demands of luxury brands, including factors like exclusivity, brand image, and
consumer perceptions. Additionally, investigate the specific challenges luxury brands face in
adopting circular practices and propose strategies for their successful integration.
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PRIYANSH DOSHI - 180

Literature Reviews on Circular Economy and Luxury Brands:

1. Literature Review Title: Beyond Ownership: Exploring Circular Strategies for the
Future of Luxury Fashion

Summary: This review examines the potential of circular economy (CE) models for
mitigating the environmental impact of the luxury fashion industry. It discusses
various CE strategies like upcycling, resale, and rental, analyzing their applicability
and challenges within the luxury context.

Gaps:
* Limited research on consumer perceptions and willingness to adopt CE models in
luxury.
* Need for empirical studies on the financial viability and cost-effectiveness of
different CE strategies for luxury brands.
* Lack of consideration for broader systemic changes needed to support a circular
luxury fashion system.

2. Literature Review Title: Circular Economy Business Models in the Fashion

Industry: Challenges and Opportunities for Luxury Brands

Summary: This review focuses on the challenges and opportunities for luxury brands
to adopt CE business models. It identifies key barriers like brand image concerns,
high cost of repair and refurbishment, and consumer resistance to second-hand luxury.
However, it also highlights potential benefits like increased customer engagement,
resource efficiency, and enhanced brand image.

Gaps:
* Insufficient research on the impact of CE adoption on brand positioning and
consumer perceptions of luxury value.
* Lack of exploration of innovative CE models specifically tailored for the luxury
market.
* Limited empirical data on the environmental and economic effects of CE
implementation in luxury brands.

3. Literature Review Title: The Luxury Circular Economy: A New Frontier for
Sustainable Consumption?

Summary: This review critically analyzes the potential and limitations of CE within
the luxury sector. It emphasizes the need for a systemic shift, beyond individual brand
initiatives, to address resource extraction, production, and waste management
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practices. It also explores the role of technology and collaboration in facilitating a
circular luxury industry.

Gaps:
* Insufficient research on the role of policy and regulation in incentivizing CE
adoption in the luxury sector.
* Lack of exploration of social and ethical issues related to labor practices and supply
chains in circular luxury models.
* Limited understanding of the long-term economic and environmental implications
of different CE strategies for luxury brands.

4. Literature Review Title: Circularity in the Luxury Industry: Deconstructing Myths

and Envisioning Sustainable Futures

Summary:This review challenges common misconceptions about CE and luxury,

arguing that sustainable practices can enhance brand value and customer engagement.
It analyzes current CE initiatives in the luxury sector, identifying best practices and
areas for improvement. Additionally, it emphasizes the importance of storytelling and
brand communication in promoting circularity.

Gaps:
* Lack of research on the effectiveness of storytelling and communication strategies
in influencing consumer behavior towards CE models in the luxury context.
* Limited data on the economic feasibility and return on investment of circular
initiatives for luxury brands.
* Insufficient exploration of potential ethical dilemmas and conflicts emerging from
circular practices in the luxury industry.

5. Literature Review Title: From Linear to Circular: Transforming the Luxury

Business Paradigm

Summary: This review advocates for a fundamental shift towards circularity in the
luxury industry, emphasizing its potential to address environmental and social
challenges. It analyzes various CE strategies like product design, material selection,
and end-of-life management, highlighting their applicability within the luxury
context. It also explores the role of collaboration and stakeholder engagement in
facilitating a circular transition.

Gaps:
* Limited research on the specific skills and capabilities needed for luxury brands to
successfully implement CE strategies.
* Lack of empirical studies on the impact of CE adoption on employee engagement
and organizational culture within luxury brands.
* Insufficient exploration of the potential unintended consequences of a circular
luxury system, such as increased pressure on resources or greenwashing concerns.
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