Evaluation of Business Models for Increased Reuse, Collective Use and Prolonged Life Time of Textiles

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Evaluation of Business Models for Increased Reuse, Collective Use and Prolonged Life Time of Textiles evaluation of business models for increased reuse, collective use and prolonged life time of textiles by Maria Elander, David Watson and Anja Charlotte Gylling report developed by: preface As a part of Mistra Future Fashion phase 2, IVL Swedish Environmental Research Institute (IVL) and PlanMiljø have identified and evaluated business models for increased use, collective use and prolonged life time of textiles. The objective was to collect experiences made and to identify lessons learned as well as factors of success and failure. The assessment carried out is based on information collected in expert interviews with fashion companies and entrepreneurs offering a range of different bu- siness models within the fashion industry. On behalf of Mistra Future Fashion, IVL and PlanMiljø would like to thank all companies and organizations that have contributed with input to our work. Thank you for your engagement and participation! Maria Elander, task leader Titel: Evaluation of business models for incre- A Mistra Future Fashion Report ased reuse, collective use and prolonged life Mistra Future Fashion is a cross-disciplinary time of textiles research program, initiated and primarily fun- Authors: Maria Elander, David Watson and ded by Mistra. It holds a total budget of SEK 110 Anja Charlotte Gylling millions and stretches over 8 years, from 2011 Edition: Only available as PDF for individual to 2019. It is hosted by RISE in collaboration printing with 13 research partners, and involves more ISBN: 978-91-88695-03-1 than 40 industry partners. Mistra Future Fashion report number: 2017:4 Task deliverable MFF phase 2: 3.3.3.1 www.mistrafuturefashion.com © Maria Elander, David Watson and Anja Charlotte Gylling IVL Svenska Miljöinstitutet, Valhallavägen 81 114 27 Stockholm. Phone: +46 (0)10-788 65 00 www.ivl.se Images: Pixabay Layout: Charlotte Neckmar, Sigrid Barnekow summary As part of Mistra Future Fashion IVL Swedish Environmental Research Institute and Plan- contents Miljø have evaluated business models for increased reuse, collective use and prolonged lifetime of textiles. The evaluation is based on stakeholder interviews with 22 companies summary....................................................................... 1 and organizations engaging in such business models, chosen from a pool of in total 59 identified business models. 1 introduction......................................................... 5 1.1 background...................................................... 5 Stakeholders see a current lack of incentives and policy measures supporting business 5 models promoting reuse, collective use and prolonged life-time of textiles. The need for 1.2 objective.......................................................... policy measures creating incentives for more sustainable business models and consump- 1.3 scope............................................................... 5 tion patterns in the textile sector are judged to exceed the measures proposed by the 1.4 method............................................................ 6 Swedish Environmental Protection Agency in September 2016. Creating such incentives could contribute to accelerating the process of shifting to more sustainable consumption 2 mapping of business models..................................... 8 and supply patterns for garments and textiles. 2.1 classification of business models......................... 8 Measures of success in this report include making profit (or break-even in the cases of 2.2 character of the collected business models........... 9 non-profit initiatives), increased awareness/engagement from customers/citizens and 3 stakeholders’ experience and views............................10 increased active lifetime of textiles. Based on the collected stakeholder views, potential 3.1 objectives.........................................................10 success factors for business models for increased reuse, collective use and prolonged life- time of textiles were identified: 3.2 motivation for engaging.....................................11 3.3 target audience................................................13 • Access to (free) materials 3.4 timing for start.................................................14 • Access to volunteers 3.5 financial support...............................................15 16 • Efficient logistics 3.6 profitability..................................................... 3.7 financial obstacles............................................17 • Finding the right material/garments 3.8 other obstacles.................................................19 • Finding understanding from investors/financial institutes 3.9 positive developments........................................20 3.10 beneficial policy instruments..............................21 • Good agreements with suppliers 3.11 reflecting on stakeholders’ experiences................24 • Keeping the customer interested 4 aspects of successful business models.........................25 5 conclusions and next steps.......................................27 • Rapid establishment of the brand /business model 5.1 reflecting on the results.....................................27 • Time since establishment 5.2 recommendations.............................................28 The interviewed companies and organizations represent both traditional brands (fashion 5.3 next steps........................................................28 companies) and other actors. The evaluated business model types comprise Own product references......................................................................29 take-back and resale, General collection and resale, Sharing with other users, Longer 30 technical life and Redesign. The representatives shared their experiences and views on annexes......................................................................... objectives, motivation, target audience, timing, financial support, profitability, financial obstacles, other obstacles, positive developments and beneficial policy instruments for their business models. 1 2 list of figures Figure 1 - Schematic illustration of the method used for the research..................... 7 Figure 2 - Business model categories of the companies/organizations selected for interviews...................................................................... 8 Figure 3 - Overview of the origin country of the companies/organizations selected for interview....................................................................... 8 Figure 4 - Overview of the identified five business model types and examples of different business models supporting reuse, collective use and prolonged life time of textiles............................................................10 Figure 5 - Distribution of the collected initiatives in regard of different types of business models for reuse, collective use and prolonged life time of textiles.......................................................................................10 Figure 6 - Overview of different types of actors (textile producer / brand and other actors) in relation to the objectives (direct profit, indirect profit or non-profit) of the selected business models........................... 11 Figure 7 - Overview of different objectives (direct profit, indirect profit or non-profit) of the different types of the selected business models.......... 12 Figure 8 - Motivation for introduction of the selected business models................... 12 Figure 9 - Overview of financial support for the business models in the 22 selected companies depending on the business models role in the companies (primary or secondary business model).............................. 17 Figure 10 - Current profitability of the 22 selected business models.........................17 Figure 11 - Identified other (than financial) obstacles for the 22 selected business model...............................................................................20 Figure 12 - Distribution of identified other (than financial) obstacles mentioned by the 22 selected business models....................................................20 Figure 13 - References to beneficial policy instruments from the 22 selected business models............................................................................. 22 list of tables Table 1 - Collected examples of business models for increased reuse, collective use and prolonged life time of textiles.................................................32 Table 2 - Overview of the companies and initiatives selected for interviews............34 abbreviations C2C Consumer to consumer CSR Corporate Social Responsibility DDK Danish crowns EUR Euro SEK Swedish crowns use of the term business model in this report In this report the term “business model” is used for activities that deliver value to customers and (direct or indirect) profit to the business by • prolonging (active) lifetime of textiles by first and/or subsequent user(s); • increasing reuse of textiles by subsequent user(s); and • increasing collective use by multiple users. 3 5 Not all such activities can strictly be defined as a business model in its own right. Accor- 1 introduction ding to Teece (2010) the essence of a business model is that it “defines the manner by which the business enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit: it thus reflects management’s hypothesis about what customers want, how they want it, and how an enterprise can organize to 1.1 background best meet those
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