Circular Business Model Innovation for Existing Retailing Companies: Approaches, Challenges and Opportunities of Second-hand

Abstract

This thesis investigates a growing trend of Circular Business Model Innovation (CBMI), as it explores how established companies are incorporating second-hand markets as an additional element to their existing business models. With the main context being the fashion industry, this qualitative research was conducted using a multiple-case study design and draws on the concept of CBMI as it examines how different companies are pursuing this innovative approach and possible challenges and opportunities of it. The analysis reveals that integrating a second-hand market into an existing business is a complex undertaking, requiring adjustments across various business model components. The customers play a crucial role in this model, as they act as both buyers and suppliers, impacting factors like cost structure and product assortment. The research identifies several key challenges associated with CBMI in this context. These include managing the inherent uncertainties of a second-hand supply chain, maintaining profitability with lower-priced products, and overcoming negative perceptions of second-hand goods. Cultural acceptance of second-hand products also emerges as a critical factor for success. Despite these challenges, the research highlights significant opportunities associated with CBMI and second-hand markets. The phenomenon offers a path towards increased product life cycles, improved resource efficiency, and a positive impact on market dynamics within a circular economy framework. This thesis contributes to the field by bridging the literature of second-hand and the field of CBMI. It offers valuable insights for companies seeking to adopt this innovative and sustainable business strategy. Additionally, the research identifies areas for further exploration, paving the way for a more comprehensive understanding of CBMI and second-hand markets within the broader context of circular economy and business model innovation.