Customer Behaviour in the Circular Economy: The Enabling Role of Digital Technologies

The circular economy is proposed as a concept to mitigate the adverse effects of economic and environmental challenges organisations face globally at an accelerated pace and with growing severity. Industrial organisations are increasingly held accountable for their role and impact on these issues, making industrial sustainability a growing concern among customers, governments, and companies. By decoupling economic activity from resource input, the circular economy aims to reduce the negative environmental impact of virgin material consumption, waste production, emission, and energy leakage and allow for economic opportunities that are more self-reliant as they utilise materials already in circulation. Despite the considerable traction the concept experienced in the past decade with scholars, policymakers, and industrial decision makers, its actual implementation remains limited. One critical barrier for faster adoption of circular principles is the lack of customer acceptance for circular offerings. Despite the theoretical and practical importance of this issue, it remains under-researched. This research addresses this gap guided by the following research question: ‘How do companies in the circular economy meet their customer needs?’ To address the research question, this study employs a systematic literature review, expert interviews, and a multiple case study. The empirical investigation builds on semi-structured interviews to explore the consumer durables market, with a particular emphasis on the European consumer electronics and textile industries, as relevant contributors to global emissions. The research makes four main contributions to theory and to practice. As for theory, first, it consolidates the fragmented terminology in the field into a uniform language, defining and proposing key terms to develop the theoretical conceptualisation of the field, which is yet lacking. Second, the study contributes to closing the research gap on how circular companies meet their customer needs by providing an empirical evidence base, rooted in rich qualitative data, which describes the phenomenon, relevant stakeholders, capabilities, and processes in depth. Third, the study's findings outline the complexity of the phenomenon. Thereby, this study critiques the current literature and prevalent methodologies, which often aim to map the current state in the circular economy in a reactive approach. Instead, this research argues that the topic’s complexity warrants more proactive methodologies, such as action or experimental research, and appropriate theoretical considerations, for instance by drawing on complex adaptive systems and network theory, for future studies. Fourth, the research highlights the phenomenon’s interdisciplinarity. It connects research fields touching on sustainability, innovation, technology, capabilities, psychology, and systems perspectives. Therefore, the findings caution against the limited explanatory power of unidimensional research designs and suggest more integrative approaches to capture the phenomenon’s interdisciplinary nature. As for its contributions to practice, the study provides the most comprehensive thematic structure of factors of customer needs, the first thematic structure of practices that companies can employ to meet those needs, and the first thematic structure of digital technologies enabling companies to identify such customer needs and implement practices to meet them. These three contributions extend the current knowledge in the field, which is largely literature-based, fragmented, and unspecific. These structures help practitioners to understand the diversity of customer needs for circular products and services, to apprehend the variety of practices at the companies’ disposal to meet these needs, and to appreciate the enabling role that digital technologies can play, when used in a targeted and cohesive approach across the value chain, by providing concrete use cases. Fourth, the study proposes a conceptual framework that demonstrates the applicability of dynamic capabilities theory in the circular economy. It illustrates how organisations can sense customer needs, seize opportunities to meet them, and adapt their assets and processes accordingly. It draws the practitioners’ attention to develop the dynamic capabilities necessary for fast innovation and collaboration among multiple supply chain stakeholders beyond the focal firm, including, but not limited to the customer. It further contextualises the company’s situation by outlining relevant challenges, enablers, and moderators. The thesis demonstrates the enabling role of digital technologies, as highlighted in the framework, based on empirical evidence, previously underexplored in the literature. This research connects the circular economy with related literature and theories on customer behaviour and digital technologies. It advances the knowledge with both an understanding on how companies can meet customer needs in the circular economy, hitherto underexplored in the literature, and a nuanced approach to the theory of dynamic capabilities in this context. It changes the discussion from a passive perspective, which hinges on describing customer needs, to an active perspective, exploring pathways to meet customer needs proactively. The author hopes that these findings will inspire researchers and practitioners alike to reflect on, adapt, and intensify their approaches en route to the circular economy in order to accelerate the proliferation of more sustainable industrial practices.

Name dc:type.qualificationname

Doctor of Philosophy (PhD)

Level dc:type.qualificationlevel

Doctoral

Grantor dc:publisher.institution

University of Cambridge

Year dc:date.issued

2024

Author dc:creator

• Bücker, Christian

Advisor dc:contributor.advisor

• Kumar, Mukesh

• Circular Economy
• Sustainability
• Customer behaviour
• Consumer behaviour
• Digital technologies
• Sustainable development
• Artificial intelligence
• Blockchain
• Circular business models
• Circular business model innovation
• Digital twins
• Internet of things
• Sensors
• Driver and barrier
• Supply chain resilience
• Closed-loop supply chain
• Systematic literature review
• Expert interviews
• Case studies
• Dynamic capabilities

Licence

• https://apollo8-f-pro.lib.cam.ac.uk/bitstreams/819164b3-ad71-413c-ae88-304e110d81c9/download
• http://purl.org/NET/rdflicense/allrightsreserved

Author Identifier

0000-0002-6688-9223

OAI identifier oai:identifier

oai:www.repository.cam.ac.uk:1810/384442