Business Horizons 

Innovative and sustainable business models in the fashion industry: Entrepreneurial drivers, opportunities, and challenges

on Business Horizons, of the Kelley School of Business – Indiana University


New and existing companies are looking for ways to thrive in a competitive environment with innovative business models while respecting society and avoiding actions that harm the planet. Trends such as circular economy, fair trade, lowsumerism, and sharing economy are some of the many emerging entrepreneurial approaches that address this issue, but there is still a gap between what theory argues and the levels of environmental and social sustainability realized when theory is put into practice. In fact, most research on the topic of sustainable business models is still exploratory and does not fully acknowledge these emerging approaches, whose definitions, boundaries, and defining characteristics are still somewhat vague. This study seeks to contribute to the understanding of the inner entrepreneurial dynamics of innovative sustainable business models. In particular, we focus on the fashion business, a resource-intensive industry in which opportunities to reduce environmental impacts and to innovate business models abound. The aim of our research is to investigate innovative business models in the fashion industry that have sustainability as their defining characteristic, especially in terms of value proposition. In order to do that, we combine a systematic review of the literature with empirical research comprised of six interviews with specialists in sustainability, business model innovation, and the fashion industry, along with eight case studies on innovative fashion startups we define as ‘born sustainable.’ As a result, we propose a synthesizing framework that discloses trends and drivers of innovative and sustainable business models in the fashion industry. We also highlight opportunities and challenges for researchers and entrepreneurs interested in this topic.

ELSE Corp has been mentioned as a “born-sustainable startup“-

Trends and drivers of sustainability-related business model innovation for fashion businesses: Technological innovation: Zero waste

Fashion startups focused on sustainability: Preza, Revoada and Colibrii, Contextura, Orange Fiber, Armadio Verde, Lanieri, ELSE Corp

ELSE Corp combines 3-D product configurator and hybrid manufacturing technologies in a mass customization platform that recently incorporated augmented reality features. Its main value proposition lies in providing third parties with smart mirror and dressing room technology that can minimize store inventory, thus enabling virtual or no stock retail for the apparel and footwear industry while capitalizing on the zero waste driver.

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