Circular supply chain valorisation through sustainable value mapping in the post-consumer used clothing sector

2.1 The concept of value in CSC literature: an overview

With its theoretical grounding in the strategic management literature, the concept of value has gained prominence through discussions of value creation and capture (Bowman and Ambrosini, 2000; Lepak et al., 2007), among other competing discourses. Critical to this discourse are the conceptualisations of (1) value creation, which is determined by the novelty and appropriateness of the utility of any product/service; (2) value capture, which depends on several market aspects, including competition, isolation/safeguarding mechanisms and bargaining power and (3) their different sources, targets and levels, such as individuals, organisations, the environment and society. Emanating from this value concept is the multi-dimensional and multi-stakeholder perspective on value, which is also used to define sustainable value in the supply chain literature. Although value is predominantly calibrated in economic terms, it has increasingly been extended to a multi-dimensional construct (Lepak et al., 2007). For instance, in the sustainability context, the triple bottom line (TBL) is widely acknowledged by considering environmental and social value types in addition to economic value (Stubbs and Cocklin, 2008; Joyce and Paquin, 2016). Beske and Seuring (2014) highlight that a commitment to the TBL is the exclusive foundation of sustainable supply chains. In the context of the circular economy, Ripanti and Tjahjono (2019) frame value as enabled by the supply chain and logistics for sustainable value creation, where economic value is underpinned by optimisation; environmental value is enabled by increasing awareness, cascading mechanisms and maximising waste elimination and social value is generated by collaborative networks to achieve common goals. Additionally, Lepak et al. (2007) recognised value creation beyond the organisational level, where society is a key appropriator of value. Thus, a multi-stakeholder perspective on value is evident, which can be impacted by both the cooperative potential and competing interests of stakeholders (Freeman and Liedtka, 1997). This notion of multi-stakeholder value is adopted in the context of sustainable supply chains, for example, in Sarkis et al. (2010), Beske and Seuring (2014) and Boruchowitch and Fritz (2022), acknowledging the broader consideration of stakeholders beyond the supplier-firm-customer level to include employees and communities. Together, these value perspectives argue that multi-dimensional value types are often incommensurable (Norris et al., 2021) and can often be appropriated by different stakeholders or have (negative) externalities that affect each other (Sarkis et al., 2010).

As mentioned in the Introduction, multi-dimensional and multi-stakeholder perspectives largely uphold the primacy of the value concept and its need for further adoption in the CSC literature. From an implementation perspective, a clear stance can be observed in the existing CSC literature in exploring and explaining the key enablers and barriers to creating and capturing such sustainable value (Batista et al., 2018; González-Sánchez et al., 2020). While many studies have highlighted the barriers and strategic enablers to creating and capturing value in CSC, with a few notable exceptions (e.g. Saha et al., 2021; Kazancoglu et al., 2022), they have not explicitly provided a nuanced view of the types of value generated and for whom. In essence, despite the growing body of CSC literature, there is little evidence linking CSC practices to TBL sustainability or for whom such sustainable value is created. Through an extensive survey of 114 textile and clothing companies in Southeast Asia, Saha et al. (2021) identified the current state of the circular economy, challenges and opportunities to implement the necessary interventions at different stages of CSCs to enhance sustainability from a multi-dimensional perspective (economic, environmental and social). Based on this, they also proposed a set of strategies, resource requirements and action plans for the adoption and implementation of a circular economy. Kazancoglu et al. (2022) investigated barriers in CSCs from a multi-stakeholder perspective to understand what hinders the transition of the circular economy in textile CSCs, which consist of multiple stakeholders such as brands, suppliers, manufacturers and recyclers. The lack of CSC infrastructure for collection, sorting and recycling, as well as a lack of standards and reluctance to adopt circular economy practices, were found to be the main barriers. However, a drawback of these studies, due to their quantitative nature, is the lack of explanation of how these barriers or strategies hinder or enable sustainable value. Some other scholarly works (e.g. De Angelis et al., 2018; González-Sánchez et al., 2020) highlight how multi-dimensional value types (predominantly economic and environmental value) are created in CSCs, for example, through network collaboration, supply chain adaptation and structural flexibility and the use of disruptive and smart technologies. However, these studies are conceptual in nature and thus lack a real-world context. Specifically, in the used clothing sector, such a value perspective of CSCs has recently been reported (Sandberg et al., 2018; Pal et al., 2019), mapping the value created and captured for multiple CSC members from a multi-dimensional perspective. For instance, Pal et al. (2019) adopted a relational view to understand how multi-dimensional value types (economic, environmental, information, customer and brand) are created and captured by different CSC stakeholders, such as retailers and brands, sorters and recyclers and non-profit organisations. Through the study of three CSC cases, the research identified how value is created downstream through interpersonal ways of knowledge sharing and informal safeguards, while seamless (and routinised) knowledge-sharing practices and financial incentives play a crucial role in enabling value upstream. In essence, research on sustainable value creation from an integrated, multi-dimensional and multi-stakeholder perspective is scarce in the CSC literature.

2.2 Broadening the value concept in the CSC literature

Recent literature on sustainable business models (e.g. Bocken et al., 2013; Yang et al., 2017a) captures multi-dimensional and multi-stakeholder perspectives on sustainable value by integrating them into an innovation process of sustainable value mapping, a perspective currently missing in the supply chain literature. Crucial to this assumption is that the innovation process should also help companies identify new opportunities to create and capture (sustainable) value by analysing the value captured and uncaptured for key stakeholders across the product lifecycle (Yang et al., 2017a). In this innovation process, understanding the notions of VU and VO as conceptualised by Yang et al. (2017a, b) is crucial. Yang et al. (2017a, b) refer to VU as the potential value that is not currently captured due to various (negative) externalities, while VO focuses on identifying and determining how to integrate sustainability concerns to create innovation opportunities in business models by uncovering approaches to create, capture and deliver new value (Bocken et al., 2013; Yang et al., 2017b). Yang et al. (2017b) further categorise VU into four sub-categories: value surplus, value absence, value missed and value destroyed, based on the rationale for why certain values remain uncaptured. In a nutshell, value surplus is an outcome of the unnecessary presence of something, for example, overproduction; value absence is the result of something that is needed but does not exist, for example, lack of labour; value missed occurs when something that exists is not exploited, for example, underutilised by-products and value destroyed refers to something that undermines value, for example, pollution. While reconceptualising and further revising these VU categories can improve the value proposition, a potential problem is that while some VUs are visible, such as waste streams, inefficient production processes and quality defects, others are invisible, such as underutilised expertise and knowledge or completely new value forms (Yang et al., 2017a, b). Yang et al. (2017b) further referred to VOs as potential solutions to reduce the negative forms of value or to transform them into positive forms of value. Although not all VUs can be turned into VOs by implementing certain strategies, new VOs can be triggered and inspired by identifying the VUs and their antecedents or reasons for their emergence. For example, in the circular economy context, Zacho et al. (2021) used this notion to demonstrate how municipal preparation for waste reuse and recycling can enable the identification of VUs to enhance the value creation potential associated with increased material and resource efficiency. Kvadsheim et al. (2021) acknowledged such an extended value perspective by considering uncaptured value and how VOs can be realised, highlighting that such an understanding is ingrained in a circular economy where waste valorisation is the starting point. However, such an extended view of sustainable value mapping is sparse in the supply chain literature but contributes to the understanding of how to achieve sustainability, as already conceptualised in the sustainable business model literature.

Acknowledging the current shortcomings in the CSC literature, we adopt this extended value perspective to formulate two specific research questions (RQs), which are linked via the conceptual framework (Figure 1). Based on the value innovation process proposed by Yang et al. (2017a, b), RQ1 aims to identify the main antecedents (or reasons) for uncaptured sustainable value in used clothing CSCs, and RQ 2 addresses what strategies are devised by used clothing CSC actors to generate opportunities to capture these uncaptured value types.

3.1 Post-consumer used clothing CSC: description and data collection

In total, 21 semi-structured interviews were conducted with 20 organisations (referred to as cases) involved in used-clothing CSC, including two fashion retailers, eight NPO-owned second-hand businesses, nine sorters and recyclers and one municipality. The CSC operations of these cases span four CSC stages: collection, sorting, reselling and trading and recycling/remanufacturing/circular procurement, as mapped in Table 1. This constitutes an overall study of the post-consumer used clothing sector with non-paired cases, with each CSC stage representing a distinct level of analysis.

The overall motivation for including NPOs and fashion retailers from Sweden and integrated sorter-recyclers from north-west Europe is as follows: Sweden serves as an interesting landscape for understanding the collection and subsequent CSC stages in the midst of the ongoing development of a national circular textile strategy and extended producer responsibility (EPR) for textiles and the emergence of various new players, such as automated sorters and chemical recyclers. Traditionally, NPOs have been the major players as resellers and traders, but in recent years, there has been a strong emergence of for-profit actors such as retail brands in the resale market (Sweet et al., 2019). The majority of used textiles collected in Nordic countries, such as Sweden, are exported unsorted, mainly to north-western Europe (Germany, Benelux and Poland), where the largest industrial textile sorters and recyclers are located (van Duijn et al., 2022). A summary of each CSC stage and how these cases operate is given below, and a detailed overview is provided in the Supplementary File.

Of the 20 cases, 16 were involved in collection activities. One of the large multinational retailers organises its collection through a take-back partner, while the other offers in-store collection in collaboration with an NPO. The NPOs included in our study are the largest in Sweden in terms of collection volume (Carlsson et al., 2016), whereas the Norwegian NPO in this study operates joint export activities with a Swedish NPO. Furthermore, the three integrated sorter-recyclers are among the top six in the EU in terms of the volume of used clothing handled, and their collection is organised in different ways, predominantly through collaboration with retail brands, NPOs and municipalities (van Duijn et al., 2022). Finally, a Swedish municipality was included as a representative of urban municipal collection in connection with the impending EU and national regulations to establish separate collection systems for textiles by 2030. Sorting, as the next CSC stage, is conventionally organised by NPOs and large-scale integrated sorter-recyclers, represented by 14 organisations in our study. The Swedish NPOs included are among the top ten in terms of the volume of used clothing handled (Carlsson et al., 2016), although social work, such as humanitarian aid and creating employment outside the labour market, are the main objectives (Persson and Hinton, 2023). Integrated sorter-recyclers are mainly located in north-western Europe (e.g. Germany, Switzerland and the Netherlands) and operate through one or more sorting facilities. The two Swedish cases are new entrants to the CSC market with automated sorting facilities based on near-infrared technology. Subsequently, resale is organised by 14 organisations, predominantly NPOs and integrated sorter-recyclers, either through their own business-to-consumer (B2C) channels or business-to-business (B2B) wholesellers. Most of the NPOs and integrated sorter-recyclers are involved in both reselling and export trade, so quality used clothes are sold via their own second-hand stores, but much of the lower-quality material is exported to countries in the Global South. In our study, with one exception—a Dutch integrated sorter-recycler—all others operate their own second-hand resale, either through vintage or “pay-per-weight” stores. A key difference between NPOs and integrated sorter-recyclers is the percentage of reusable fraction in the sorted volume; on average, 5–10% of the sorted items are resold as B2C by the integrated sorter-recycler, and this fraction could be as high as 20% for the NPOs (Carlsson et al., 2016). However, owing to a lack of large-scale infrastructure, the NPOs only sort a small fraction of the collected items, and the rest is exported unsorted. Of the two Swedish retailers, one operates a variety of resale business models, while the other conducts only peer-to-peer resale by collaborating with other re-commerce platforms and second-hand services. The last CSC stage is recycling or remanufacturing, which requires additional preparatory processes such as shredding or trimming. In our study, all five integrated sorter-recyclers engaged in the mechanical recycling of poor-quality used clothes into industrial wipers, rags, insulation materials and recycled fibres. The two fashion retailers procured recycled yarns as inputs for their recycling collections. As an alternative to mechanical recycling, chemical treatment generates higher-quality fibres, as demonstrated by one Swedish recycler included in the study. Both fashion retailers engage in remanufacturing. Data were collected from nine patients representing this stage.

The cases were selected purposively, first by developing a list of organisations and contacts based on our previous interactions during research projects, and then by exploring and assessing their relevance to our study, particularly ensuring diversity across countries, stakeholder types and CSC stages. To make this judgement, we consulted organisations' webpages and published documents, such as sustainability reports, to understand their current activities. Convenience played an essential role in conducting the interviews taking advantage of previous connections with the stakeholders. Additionally, theoretical sampling guided the process of data collection and “pre-analysis” concurrently (Charmaz, 2014) and subsequently to determine whether a new case needed to be interviewed, to achieve data saturation (Hennink et al., 2017). In short, after each interview, we jointly discussed our interpretation of the interview in terms of novelty in the empirics in terms of value aspects, and aimed to use it to extend and refine our findings (Corbin and Strauss, 2008), and to further illuminate whether a new case was needed. Often, the interviewed organisation also provided leads in a snowballing fashion; for instance, case 20 directed us to contact case 2, while case 8 referred us to case 14.

As well as seeking basic information about current CSC activities in each case, the main part of the interview included specific questions related to understanding the antecedents of VU and strategies developed/planned to capture VOs. As we were looking for the “stories” that the interviewees had, our questions were open-ended and structured around three main areas.

1. Understanding existing challenges leading to VU,

2. Reflecting on the future/emerging context leading to foreseeing VU, and

3. Strategies to capture VU.

Specifically, we asked respondents how they currently create and capture multi-dimensional value types, what are the major challenges or barriers to capturing these value types, what value types are uncaptured due to their current ways of operation, what new VOs do they foresee achievable through new activities, relationships and network configurations, and what are the main strategies/solutions that can improve these VOs. Additional elaboration was provided, both during the distribution of the questionnaire and orally during the interviews, to guide and clarify our interpretations of the concepts of VU and VO. For instance, a specific elaboration section was presented in the distributed questionnaire, where we elaborated, for example, on the environmental value captured in terms of higher reuse, recycling, etc. higher process performance, green processes and logistics, waste reduction and landfill prevention; the economic value was explained in terms of cost reduction, productivity, efficiency, new business opportunities and so on. In line with Yang et al. (2017a, b), VU was defined when a certain value type was inadequately or not created/captured, was currently lost, or yielded negative outcomes due to current operations. VOs occur when a certain value type is aspired to, and can be additionally created and captured by changing operational methods.

Given the need to critically and clinically reflect not only the VU antecedents and VO strategies, but also to think and reflect on how the emerging context affects them, it was a prerequisite that our respondents had a strategic decision-making position in their organisation. In this way, the respondents had not only an understanding of the key CSC processes/activities but also a strategic outlook on their organisation's positioning, competencies and challenges in an emerging textile circular economy landscape in Europe; in short, they were all considered to be the most informed and relevant person for this study (see Table 1). In some cases, we had more than one respondent to ensure the best possible representation; for instance, in cases 4, 8, 14 and 15, two respondents participated in the same interview session, while in case 18 two respondents participated separately. We ensured this by emailing the questionnaire several weeks in advance and asking the respondent to invite additional colleagues, if necessary. All interviews were conducted between August 2021 and April 2022, were conducted in English, digitally recorded (after obtaining oral consent) and transcribed verbatim using automated transcription software, resulting in nearly 22 h of recordings. Interviews ranged in length from 45 to 96 min, with the average interview lasting approximately one hour. The recording of the interviews was not an issue for the respondents as their anonymity was maintained.

3.2 Data analysis

Overall, the analysis followed a qualitative coding process similar to inductive research, specifically utilising the grounded theory method proposed by Corbin and Strauss (2008). The first step involved open coding, in which each transcribed interview was scrutinised to extract relevant data fragments that highlighted the key aspects of our inquiry: existing and emerging VU antecedents and VO strategies, as illustrated in Section 3.1. The interviews were divided equally between the two authors for transcription, with both authors ensuring that one of the interviews supported harmonious interpretations of the key aspects. Next, we followed a procedure of “directed content analysis” (Hsieh and Shannon, 2005), in which we jointly classified and labelled these data fragments from all interviews into two categories: (1) VU antecedents and (2) VO strategies, according to our RQs. To initiate the axial coding process, we first tabulated these two categories of labels across the four CSC stages (or levels of analysis), followed by explicitly extracting which TBL value was hindered or generated. For the axial coding process, all labels were retabularised CSC stagewise to explore emerging patterns in terms of VU antecedents and VO strategies. This was performed not only by extracting the essence of each label, but also by comparing and contrasting them to ensure that similarities and differences were accounted for. The process continued for two iterations until we jointly concluded that no new pattern (i.e. code) could be found, nor was there any ambiguity in classifying the extant labels into codes; thus, saturation in data coding was achieved (Ligita et al., 2020). All steps of the axial coding process were carried out jointly by both authors. Finally, Appendixes 1 and 2 were generated inductively, where the distinct codes, that is, categories of VU antecedents and VO strategies, for different CSC stages were summarised and specific convergent descriptions written based on cross-case comparisons.

3.3 Research quality

To ensure the robustness and legitimacy of the qualitative findings following an interpretivist approach, we adopted credibility, transferability, dependability and confirmability frameworks (Halldorsson and Aastrup, 2003). Credibility or internal validity is ensured in the data analysis by separating the key constructs (VU antecedents and VO strategies) in terms of their “positioning” in the value mapping approach (as shown in Figure 1), and by directly asking the respondents to reflect on the resulting impact on multidimensional value types during the interview (Ellram, 1996). Each case analysis summary, which included explanations of VU antecedents and VO strategies along with the results and types of VU and VO captured, was emailed to each respondent for validation by approval or written feedback. Transferability, or external validity, is ensured by following a structured procedure for conducting inductive coding, as mentioned in Section 3.3, to ensure the validity of data categories and support established patterns (Ellram, 1996). We followed joint coding, code-matching, saturation principles and cross-case comparisons to derive the VU antecedents and VO strategies to ensure that they were exhaustive and exclusive. Dependability, which is closely related to reliability, was ensured by a relatively narrow focus on VU and VO and by clearly explaining the purpose of the study to respondents at the beginning of each interview. Although there were slight changes in the interview questions, as is obvious in a semi-structured format, we tried to ensure that the “key words” such as value captured, VU antecedents and VO strategies, TBL sustainable value, guided the interview process. Finally, confirmability, related to objectivity, was obtained via “a chain of evidence” between the interview transcripts, the value-mapping approach (i.e. the theoretical foundation of this research) and the findings. An inherent limitation of such a study is that respondents' reflections are “as true” as their own biases and factual premises. However, we did our best to elicit logical reasoning from the respondents during the interviews.

4.1 Collection stage

Regarding the collection stage of used clothing CSC, although traditionally organised by NPOs, in recent years, fashion brands and retailers have rapidly entered the scene, running take-back schemes in collaboration with other partners, such as sorters. One of the main challenges highlighted was that post-consumer used textile streams are becoming increasingly low quality due to the influx of a larger proportion of low-value (and quality) items (VU7) (due to the growth of fast fashion), thus reducing possibilities for further value capture. On the basis of quotes 1 and 7 (in Appendix 1), it can be concluded, as illustrated by case 8, that a large share of low-value items (VU7) and a lack of market demand (VU3) lead to high collection costs (VU5), often forcing collectors to transport collected material from low-volume markets, resulting in a higher environmental footprint and low economic value potential. Furthermore, the collection landscape is changing rapidly owing to increasing competition, which is one of the main VU antecedents (VU1). Growing competition between non- and for-profit actors and municipalities in an increasingly competitive landscape results from each actor trying to obtain a larger share of the collected used clothing in order to capture more economic value, as illustrated in quotes 2–4 in Appendix 1 and in recent studies (e.g. Sandberg et al., 2018; Sandberg, 2023). While some cases highlighted that the looming uncertainties in the form of upcoming regulations and laws (VU6) related to extended producer responsibility, GDPR, etc., are crucial antecedents to economic VU, others pointed to limited know-how and competence (VU4) in terms of market and customer orientation as a key reason for underperforming collection programs (quotes 5 and 6, respectively, in Appendix 1).

To capture these VUs, the main VO strategies devised aim to increase partnerships for improved collection efficacy by adapting collection initiatives (VO2) to enhance the degree of coordination and thus customer convenience (quotes 1–2, Appendix 2), or to find or offer new collaborations (VO5), as seen with fashion and food retailers, real estate, etc., to improve customer convenience (quotes 4–5, Appendix 2). Some cases also highlight the importance of embarking on innovation projects (VO3), as illustrated by Case 4 via quote 3 (Appendix 2), to continually generate awareness and learning about what can be improved in new collection systems. In addition, the collection process and market optimisation (VO4 and VO7) also featured strategies, followed by some cases to improve cost and eco-efficiency.

4.2 Sorting stage

Sorting used clothing is a crucial value-adding activity, as it determines the disposition route of the items (Sandberg et al., 2018), that is, whether the used clothing is reused or recycled, and the geographical location. As it is generally a very cost-sensitive activity, it becomes especially challenging in high-cost countries, such as the northern EU (van Duijn et al., 2022). Striving towards cost-efficient handling in terms of economies of scale (which may be lacing) and aspects such as lack of knowledge and capacity are some of the main reasons for increasing the VU, mainly in terms of economic potential. More specifically, the cost of manual grading makes sorting highly cost-inefficient (VU5), thus require more transport of used clothing from the country of origin (increasing environmental footprints as well), as pointed out by several cases and illustrated by quotes 8–9 (Appendix 1). This is further a consequence of the lack of adequate sorting competence (VU4), as illustrated in quote 10 (Appendix 1), in high-cost EU countries, such as the Nordic countries, where used clothing is transported to comparatively cheaper locations, such as the Baltics, for the main sorting operations. Thus, charity-owned sorting activities, for example, in Sweden, mainly extract the crème—the highest quality items—for reselling in their own stores, while the rest are sold or donated unsorted. The integrated sorter-recyclers located in north-west Europe have higher economies of scale as they find markets for all fractions of sorted items, B2B and B2C sales and recycling. However, some of these integrated sorter-recyclers highlighted that the lack of adequate capacity (VU9) for the increasing volume and share of low-quality items will further aggravate this VU in the future (e.g. quote 11 in Appendix 1). The limited availability of automated sorting technologies (VU8) and lack of legislative support (VU6) further act as the main antecedents hindering the scaling of operations (illustrated through quotes 12–14 in Appendix 1). There are also several other VU antecedents that hinder sorting activities, such as VUs 2, 3, 7 and 14, as these exacerbate the cost and process inefficiencies, along with the possibility of attaining scale; however, these were pointed out within only a single highlighted case.

The analysis identified nine different strategies for improving VO In summary, the cases highlighted different ways to enhance process efficiency, such as relying on automatic and AI-based technologies (VO6), developing market-oriented sorting competencies and skillsets (VO8), conducting specialised sorting (VO4), and even through correct location decisions to design locally/regionally distributed sorting activities (VO7), as illustrated by several quotes (quotes 9–10, quotes 13–14, quotes 15–16 and quote 17 in Appendix 2). While these strategies mainly aim to enhance economic value by gaining economies of scale and scope, they also avoid waste trading, and thus reduce the environmental footprint. In conjunction with the supply chain process and design issues, increased interaction and collaboration (VO5) are crucial for enhancing VO, for example, by locating the right suppliers and buyers or by contracting sorting services. Offering new sorting service models (VO12), such as sorting-as-a-service, has also been explored in some cases to offer innovative solutions to brands and other commercial actors, as illustrated in quote 18 (Appendix 2). A number of other strategies to enhance VO are also evident, such as jointly running innovative sorting projects (VO3) and implementing end-of-life product information management (VO10), mainly to increase sorting efficacy through knowledge building, although in several cases such strategies are not implemented.

4.3 Resell and trading stage

B2C reselling of used clothes is growing in volume for NPOs' second-hand businesses and for integrated sorter-recyclers, as highlighted by Zanjirani Farahani et al. (2021), although the type (quality) of the items and how they are resold differ. Additionally, fashion retailers are increasingly entering the market to capture economic VOs (Sandberg et al., 2018). This makes the resell marketplace highly contested due to emerging competition from many new actors, such as fashion brands, peer-to-peer sales and recommerce (VU1), as pointed out by some NPOs and integrated sorter-recyclers (illustrated by quotes 26–27 in Appendix 2). A number of cases, predominantly NPOs and integrated sorter-recyclers, also pointed out that with the rapid influx of fast fashion over the years, the demand for used clothes has not grown in proportion to the collected volume, as the quality of used clothes has become poor (VUs 3 and 7), thus leading to uncaptured economic value potential, as evident from quotes 23–25 in Appendix 2. In addition, competition between different disposal options means that reusable clothes are often mutilated and recycled, which is not good for the climate, according to the EU waste hierarchy model (EC, 2023). Within the B2B trading of used clothes, the integrated sorter-recyclers mainly reflected on how stricter and less harmonised legal regulations and a probable ban exercised on exports could be foreseen as the main reasons for VU, thus adding to operational complexities. This may hinder future exports of low-value textiles, leading to both economic and environmental VU, as pointed out in Case 8 (see quote 21 in Appendix 2). Another reason for VU along all three TBL pillars is inadequate information on the flow and quantities of exports (VU11), which also hinders the understanding of the actual sustainability performance of CSC operations; for example, waste dumping is often a problem (see quote 28 in Appendix 2). A few other process-level antecedents also hindered economic value capture, such as a lack of process standards, cost efficiency and competence (VUs 2, 4 and 5).

The two main strategies for enhancing VO in reselling are (1) design and development of the customer market, including sales channels, and (2) sustainability branding. For instance, by offering different business models for selling second-hand items (VO12), such as pays/kilos, outlets and re-commerce, and through the right mix of these sales channels (VO7), actors can enhance their opportunity to capture more economic value, including brand image and customer satisfaction, as evident respectively through quotes 22–24 and 25–26 (Appendix 2). Dedicated branding activities (VO11), for example through novel second-hand retail concepts, enable communicating a “sustainable luxury” image to customers directly, as could be deduced from quotes 28–29 posited by a couple of NPOs. Of crucial importance in supporting such branding strategies and business model additions is market and customer orientation, for which process optimisation (VO4) and developing market knowledge (VO8) are essential for capturing economic value. A few NPOs (cases 2 and 3) and an integrated sorter-recycler (case 1) have worked out such strategies over the past few years (illustrated via quotes 30–32 in Appendix 2). In addition, digital advancements such as establishing AI-enabled re-commerce platforms (VOs 6 and 10) are also emerging strategies observed in a few cases. Within a B2B context, one integrated sorter-recycler highlighted the need to be cost-efficient, which has guided their development of an optimal design of their supply chain and transportation network (VO7), while another NPO acknowledged how they have strived to create social value in developing countries where they are exporting used clothes by deploying a code of conduct, among other social responsibility measures that can be ensured by establishing higher degrees of supply chain coordination (VO2).

4.4 Recycling, remanufacturing and circular procurement stage

Recycling and remanufacturing operations are relatively niche in the clothing CSC, although the practices and associated actors and customers are rapidly growing (Janmark et al., 2022). There is an immense focus on economic valorisation in these operations, which currently lack financial viability, scale and process efficiency because of a number of VU antecedents, as our analysis suggests. The most crucial factor, that is, recurring among organisations, is the lack of data and information at the product, process and supply chain levels (VU11), such as material composition, supply chain actors and flows, as evidenced by quotes 35–37 (Appendix 2), which can hinder TBL sustainability value. Such a lack of knowledge often contributes to suboptimal CSC design because of the geographical dispersion of the actors along the CSC (VU13), creating issues such as a lack of optimal procurement of feedstock or higher carbon footprints, leading to economic and environmental VUs, as illustrated in quotes 38–40 (Appendix 2). As an alternative to such distributed CSCs, developing regional value chains at the EU level to valorise recycling is being discussed and planned in a few cases; however, this currently suffers from undercapacity (VU9), thus hindering scalability. In contrast to such regional configurations, globally operated recycling CSCs have higher environmental and social footprints owing to waste transportation, as pointed out by the chemical recycler (Case 12) in quotes 41–42 (Appendix 2). The intrinsic factors in designing such global-local CSCs are market demand and process competence, which are currently lacking in both recycling and remanufacturing businesses. The low variety of recycled materials available in the market (VU3) and lack of process-level competence (VU4) limit the economies of scale and scope of these operations (see quotes 43 and 44–45, respectively, in Appendix 2). Other VU antecedents, although not recurring across organisations, include cost- and quality-related issues related to incoming feedstock (VUs 5 and 7) and inadequate recycling technology readiness (VU 8) were highlighted as additional concerns.

As the volume of low-quality clothes in the market increases, there is an increasing demand for scaling post-consumer textile recycling to increase the flow of circular materials (Janmark et al., 2022). Remanufacturing, which is much smaller in scale, is gaining prominence among fashion brands. It is important to strengthen economic VO by developing new collaborative circular ecosystems (VO5), as highlighted by a few cases (see quotes 35–37, Appendix 2) and Sandberg (2023), to secure both process capabilities and the recycled product market. This goes together with finding new suppliers and other partners to build new CSCs (VO7) and simultaneously increasing market orientation by developing know-how (VO8) (see quotes 37 and 38–39, respectively, in Appendix 2). To increase the market uptake of such circular material supplies, aligning industry standards and circular KPIs is crucial; fashion brands highlight the need for reporting and compliance with CSC practices (VO9). The recycling of used clothes is clearly visioned by these CSC actors as a future economic VO by enabling better market positioning, as a recent report by Janmark et al. (2022) also confirms. Several other VO-enhancing strategies aimed at process improvements (e.g. VOs 1, 4 and 6) and sustainability marketing (e.g. VO11) are also highlighted by individual cases.

4.5 Organisational level

Some of the VU antecedents are operating within organisations involved in used clothing CSC, instead of being relevant at different CSC stages. For instance, in general, a lack of coordination is observed in a few NPO cases because of the lack of collaborative cost-sharing routines among partners (VU10) and the lack of power within the circular clothing ecosystem (VU12). These issues are often perceived as destroying their strong and longstanding foothold in the used clothing sector (as illustrated through quotes 49–50 in Appendix 2), and, in turn, NPOs' economic and social value capture potential. NPOs are increasingly concerned about the lack of incentives for them in the ongoing legislative measures and the unethical expectations posed by other for-profit CSC actors. Such a loss of strategic positioning of NPOs is further aggravated by the current decentralised structure of operations (resulting in VUs 2 and 9) and the internal organisational misalignments (VU15) of some NPOs, as this limits their operational effectiveness compared to for-profit actors. integrated sorter-recyclers are concerned about the foreseeable restriction on waste trading (VU6) and how they could instead valorise optimally within the EU (due to VU13). However, most of these VU antecedents were experienced by a single organisation.

At the organisational level, the VO strategies most recurring among the cases point towards finding new partners and business models adapted to the market requirements (VOs 5 and 12) and establishing higher degrees of process control and coordination (VO2), for example, through more centralised operations, following standards and audits. Finding new collaborations (VO5) is particularly important for establishing circular ecosystems to understand market potential and create learning and scalability, as evidenced in a number of cases (see quotes 51–52, Appendix 2). Business model change is pointed out by a few large NPOs as a key VO strategy to become more profit-driven and competitive in the used clothing sector and simultaneously establish circular jobs outside the labour market (see quote 53, Appendix 2). Coupled with these VO strategies, a few cases also highlight how a value-driven organisational approach is necessary, for example, through a decentralised way of working to enable economies of scope and create learning through engagement with diverse circular initiatives (VOs 4 and 8). Such a value-driven perspective is also noticed in the case of a brand and an NPO, where compliance with ESG reporting tools (VO9) and work integration (VO13) allowed them to commit more towards enhancing environmental and social VOs, respectively (see quotes 58 and 59, respectively, in Appendix 2). In contrast, chemical recyclers highlighted the need for volume when sourcing recycled feedstock, thus highlighting the strategy to source globally (VO7), which can create TBL value through their operations.

4.6 Cross CSC-stage analysis

A number of VU antecedents are evident across all CSC stages, which are related to hindering traditional enablers of logistics competitiveness, such as cost (VU5), quality (VU7) and demand (VU3), as well as skillset and know-how (VU4). Owing to the growing proportion of low-quality used clothes in the reverse stream, the valorisation potential is lower, either via reselling or recycling. This increases operational costs, and at the same time, products are often not up to customers' quality expectations (Persson and Hinton, 2023), thus making the demand for second-hand clothes persistently low. This is further aggravated by the lack of knowledge and competencies in devising efficient and effective clothing CSC in many northwestern EU countries. Overall, while these VU antecedents most recurrently hinder economic value potential (mapped in Figure 2), environmental footprints also increase because of the lack of cost-efficiency (VU5) in some CSC stages, such as collection and sorting, which often means transporting used clothes (and textile waste) to low-cost countries, either for processing or for finding a market. In addition, regulatory uncertainties and traceability challenges (VU11) also impede value capture, and beyond hindering economic value impact, environmental and social value capture potential is also hindered due to a lack of information on the measurable impacts of CSCs. While nine VUs (as mapped in Figure 2) impeded environmental value capture at different CSC stages, only VU 5 and VU 11 were found at multiple CSC stages. In total, five VUs (1, 4, 10, 11 and 12) impeded social value creation at different CSC stages in several cases; however, none of them were evident recurrently across CSC stages. VUs 12 and 15 are evident at the organisational level, hindering the capture of economic and social value. Overall, the least highlighted VU antecedents (evident in the CSC stages) are related to optimal supply chain design and lack of investment, although these are typically specific stage-level requirements to ensure cost and CSC optimisation.

Among the prevalent strategies to enhance VOs, optimising processes (VO4) and designing an optimal supply chain (VO7) are the most common across all CSC stages, along with the need to build critical competencies and knowledge of CSCs internally (VO8). Designing optimal CSCs can solve the most critical challenges related to cost inefficiencies and quality concerns in reverse supply chains and logistics (Pal et al., 2019). Additionally, collaboration and partnering (VO5) were highlighted as critical to building effective circular ecosystems, as recently evidenced by Sandberg (2023), through resource and capability complementarities. Overall, the least evident VO strategies are VO9 and 13; this could be attributed to the fact that the clothing industry has only recently started to prioritise used clothing CSCs as a strategy to generate TBL sustainability (Pal et al., 2019). Consequently, aspects such as compliance, standards and other sustainability performance indicators have rarely been applied. The complexity of CSC also hinders its implementation. Despite some VU antecedents hindering environmental and social value capture potential, as explored above, the VO strategies found in the case organisations were predominantly aimed at enhancing economic value. A few cases highlight how optimising collection channels (VO4) and sorting locations (related to VO7) can reduce the transport of used clothes or how recycling product innovation can valorise textile waste by finding new market collaborations (VO5), thus enhancing the environmental value potential. In general, there was a lack of explicit justification by the case organisations of how other VO strategies could enhance their environmental and social value dimensions. However, none of these VO strategies were found to improve environmental value across multiple CSC stages. A few VO strategies explicitly created social value for the case organisations, such as VOs 2, 7, 9, 11, 12 and 13, whereas none were found to create social value across multiple CSC stages.

5.1 Implications for CSC research and practice

Our research offers a new and extended perspective on value mapping in CSCs by incorporating the VU and VO aspects proposed in the literature on sustainable business models. CSC transitions embed innovation dimensions that are hindered by several antecedents that are currently present or may arise in the future due to changing market dynamics. In this context, our study's extended value mapping provides a foundation for the current understanding of CSCs and how to configure these CSCs in the future by revealing VU antecedents and strategies to capture these VOs. In doing so, our study inductively produces a checklist of 15 antecedents of sustainable VU and 13 strategies to enhance VO, which can serve as a conceptual foundation for future CSC work. Another key contribution of this research is to present an integrated sustainable value-and-stakeholder perspective of CSCs by drawing an explicit link between what TBL values are generated “by whom” (sources) and “for whom” (targets), thus extending previous works that have treated the multi-dimensional and multi-stakeholder perspectives disjointly (e.g. Kazancoglu et al., 2020; Saha et al., 2021).

In terms of practical implications, we offer a more dedicated value-mapping tool for multi-stakeholder CSCs and multi-dimensional value types. Figure 2, redesigned to incorporate the information presented in Table 2, can be useful for practitioners to adopt a structured approach to explore, analyse and understand their own VU antecedents and VO strategies across different stages and TBL values. Simultaneously, this can help to develop plans for how to enhance the valorisation potential, while identifying potential strategies and underlying challenges in the operation of used clothing CSCs.

5.2 Limitations and further research

Given that research explicitly considering the value perspective in CSCs is still in its infancy, several research avenues can be pursued to further extend the value-mapping perspective adopted here. Similar to the literature on sustainable business models (Yang et al., 2017a, b), more granularity can be included to understand multidimensional VUs using the framework of value missed, destroyed, surplus and absent among multiple stakeholders. Such revelations are complicated as these categories often overlap; therefore, they are not considered in this interview-based study due to the need for more intervention-based methodological approaches. However, such a degree of granularity can identify the exact implications of VU antecedents and more precisely define the corresponding VO strategies. This will also reveal the shared value perspective, that is, what value conflicts exist, between whom and how they can be consolidated.

Another direction to extend this explorative research is to understand “how” CSC actors identify their VU antecedents and devise VO strategies and underlying capabilities, thus going beyond our current scope of “what” VU antecedents and VO strategies are. This requires exploring theoretical perspectives such as dynamic capabilities to investigate how CSC actors can sense VUs, seize VOs and reconfigure themselves accordingly.