Sustainable Luxury: Embracing the Circular Economy
(A2025-124328)

AUTHORS

George Christodoulides, American University of Sharjah; Mona Mrad, American University of Sharjah; Gabriele Murtas, University of Bergamo; Marie-Cécile CERVELLON, EDHEC BUSINESS SCHOOL; Jonas Holmqvist, Kedge Business School

ABSTRACT

The concept of the circular economy (CE) emphasizes the importance of extending product lifecycles, providing organizations with a pathway to enhance their sustainability initiatives while reaping economic, environmental, and social benefits (European Parliament, 2023). Notably, the CE is projected to contribute an impressive $4.5tn to global markets by 2030 (World Economic Forum, 2024). In the realm of luxury goods, characterized by high prices, exclusivity, timeless design, and exceptional craftsmanship (Ko et al., 2019), there is a lasting value and appeal that make them suited for resale and rental models. These enable consumers to enjoy luxury products more sustainably while preserving their intrinsic worth (Kessous & Valette-Florence, 2019; Pantano & Stylos, 2020). As the luxury market reached a record €1.5tn ($1.66tn) in 2023 (D’Arpizio et al. (2024), it is shifting toward responsible business models rooted in CE principles (Deloitte, 2023). This special session aims to explore the intersection of luxury and the CE, highlighting innovative practices and strategies that promote a more sustainable future for the luxury sector without compromising perceived quality or image. It further aims to foster collaborative discussions and stimulate further research in this area. By deepening our understanding of the circular luxury consumer and highlighting innovative approaches and successful CE business models in the luxury sector, it seeks to inspire stakeholders to align with UN SDG12, which advocates for responsible consumption and production. Additionally, it contributes to SDG10, which focuses on reducing inequalities, as luxury in the CE is accessible to a wider range of consumers. "Redefining luxury: The role of repair in the circular economy" by Mona Mrad, Rania W. Semaan, George Christodoulides, Emanuela Prandelli This research examines the drivers, barriers, and outcomes of luxury product repair, a key component of the CE. Interviews with luxury consumers in the UAE identify emotional and rational drivers (e.g., attachment value and investment potential) as well as key barriers (e.g., inconvenience and lack of awareness). "Investigating the consumer journey in purchasing pre-owned luxury on second-hand platforms" by Gabriele Murtas, Giuseppe Pedeliento This research focuses on the consumer journey on second-hand luxury platforms, identifying motivations such as affordability and sustainability alongside concerns about authenticity and brand exclusivity. Luxury brands are advised to integrate resale initiatives to enhance circular consumption while maintaining brand appeal. "Reconsidering the value of luxury in the circular economy" by Marie-Cecile Cervellon, Lindsey Drylie Carey This paper examines how resale, rental, and sharing reshape luxury ownership, transitioning from exclusivity to accessibility. Interviews reveal a shift from emotional attachment to transactional value, offering advice for brands to adapt to evolving consumer perceptions. "Can luxury be circular? An engagement journey perspective of circular luxury consumption" by Jonas Holmqvist, Charlène Berger, Arne de Keyser, Katrien Verleye This study identifies three engagement journeys with circular luxury (price-sensitive, uniqueness, and sustainability). Findings reveal how motivations evolve over time, influenced by firm and non-firm touchpoints, offering advice to enhance consumer engagement with luxury circular models.