Analyzing factors that impede consumption to address demand-articulation failure

Abstract

Governments around the world are trying to seek economic development that is innovation-driven and inclusive. However, present-day societal and environmental challenges concerns are barriers to economic development. Mission-Oriented Innovation Policies are a powerful tool that acknowledges the importance of addressing these societal problems and drives innovative transformation associated with technological breakthroughs across socio-technical systems.

In reality, innovation finds its true purpose in the hands of consumers, and the relationship between consumers and missions is crucial for the longevity contribution to the success of the innovation. However, the existence of policies in the system does not ensure public demand, although it claims to tackle the challenge. The root cause and the factors causing demand articulation failure in transitions is unknown. Although Mission-Oriented Innovation Policies are deployed in the EU to reach sustainable development goals, there is often a lack of demand for innovation to achieve economic growth and address societal challenges.

The concept of demand articulation emphasized the need to investigate the barriers to consumption, as the ideas of consumption and demand are linked. This study aims to address factors that impede consumption to understand demand articulation failure. The research is based on exploratory methodology and is designed to add relevance to the MIP by diving into the case of the Dutch fashion industry and drawing insights from the case.

Prior research under-addresses consumption aspects in the fashion industry. Also, Circular Economy literature mainly focuses on the production side, exploring business models but does not pay attention to the consumer impact or consumption. Lack of consumption of circular products and services has been a hindering factor for circular business models. Fashion consumption is inherently socially significant in our consumer society and should be considered vital to the sustainable consumption discussion. The present study explores the impeding factors by analyzing the micro-level consumption that individuals encounter, as no previous study in the context of transitions has been done.

This study uses a qualitative approach to understand the complex problem of sustainability in the fashion industry. The main research findings included diverse methods for a consumer to contribute to circularity in the fashion industry. Also, there is not an integrated experience that supports the consumer to act circularly. Moreover, the influence of the identified factors varies depending on the consumption method. To obtain a generalized view, the identified consumption methods were associated with the 9-R framework of circularity. Finally, implications have been provided to fashion companies and policymakers based on the findings.

The research findings conclude that there are diverse methods through which a consumer can contribute towards circularity in the fashion industry. However, there is not an integrated experience that supports the consumer to act circularly. The consumer contribution methods included donating, sharing, consuming sustainable clothing, Vintage clothing, rental clothing, second-hand clothing, recyclable/ recycled clothing.

The researcher developed an understanding that circular fashion cannot be considered holistic as it consists of multiple variables that could vary based on the consumption method. Hence, to obtain a more generalized view, the consumption methods were associated with the 9R framework of strategies. This included Sharing and donating, Reducing consumption and consuming sustainable fashion, Vintage, Rental and second-hand clothing, Upcycling, Recyclable/ Recycled Clothing. It was evident that the influence of certain factors can be generalized; however, some factors have a varied influence according to the choice of the consumption methods. For instance, some factors followed a general trend, namely, price, income, awareness and knowledge, availability, culture, and transparency. Other factors whose influence depended on the consumption method included age, product attributes, gender, hygiene, the company's marketing power, brand loyalty, and ease of recycling.


Circular fashion consumption methods are so diverse that it is impossible to generalize the influence of the identified factors. Hence, for future research, the researcher should focus on a single R strategy and focus on the consumption methods. By focusing on a single R strategy or a particular consumption method, an in-depth analysis could be done to understand the barriers that obstruct consumption with the respective R strategy. Finally, implications have been provided to the policymakers and the companies trying to transition towards circularity for increasing consumption.

Moreover, the thesis aims to contribute to the stock of knowledge on Mission-oriented Innovation Policies (MIP) as it although aims to address societal challenges but often ignores the cause of demand-articulation failure. Through this research, consumer behaviour has been analyzed so that demand failure could be addressed. This is done by linking MIP literature with consumer behaviour and adoption literature. This research aims to add relevance by identifying the micro-factors (individual-level) that impede consumption in the transition in the presence of Mission-Oriented innovation policies. The factors impeding consumption would further address the demand articulation failure. The insights through the case study regarding the potential barriers would contribute to a better understanding of market creation.