In recent decades, growing attention has been paid to global environmental risks and related consequences, such as the increasing amount of CO2
emissions, global warming, deforestation, acid rains and the depletion of resources, which are threatening humanity’s survival [1
]. Since the early 2000s, more efficient resource allocation and utilization are expected to increase overall company competitiveness as well as improve the well-being of society and reduce environmental damage and economic inequalities [3
In this context, the concept of Circular Economy has gradually raised and received growing importance both on the agendas of firms and governments [5
]. It has been defined as “an industrial economy that is restorative or regenerative by intention and design” [6
]. Thus, Circular Economy represents a new business model, useful to achieve sustainable development [7
], as well as a fair society, based on early childhood development interventions, increasing equality in the workplace, preventive health care and health behavior campaigns, and a better distribution of monetary income [14
Economic and financial resources are needed to develop such a business model [15
], while effective information systems and proper skills are required for planning and managing resource reduction, reuse and recycling [8
]. Overall, companies and, more general, industries, could be forced to reorganize their industrial value chains in a way that a sustainable use of resource and treatment of waste can be effectively implemented within the production process. Notwithstanding these changes, which could sometimes limit the development of Circular Economy among firms, its practical implementation will have positive effects on the economic dimension as well as on environmental and social ones [7
]. Based on Circular Economy principles, companies can convert waste streams into income ones, using proper infrastructure for waste treatment [16
]. Particularly, Circular Economy can help companies to reduce costs, thanks to an overall increase in the re-use of materials, and to enhance their competitiveness, mainly due to a decrease in the consumption of raw materials and the effects related to their price volatility [17
]. As noted by Rizos and colleagues [17
], circular business models can also lead to technological and organizational innovation, in addition to new employment opportunities, thus improving the overall well-being of society [18
These opportunities could be particularly important in specific contexts, such as luxury, which includes companies producing manifold items (from clothes to furniture, to cars) characterized by “elitism, distinction and status, rarity, reputation, creativity, power of the brand, hedonism and refinement” [19
]. The term “luxury”, in this study, will be used for indicating products (specifically, furniture ones) that are implicitly designed to please and satisfy particular individuals’ needs. In this regard, the luxury connotation of goods is not based purely on accessibility, as it is mainly embedded in the individual’s desire for it [20
Recent studies show that few luxury companies still take sustainable development positions, notwithstanding the increasing attention towards sustainable luxury goods on the part of the customers [21
]. As stated by Kapferer and Michaut-Denizeau [21
], luxury companies often use rare raw materials (e.g., animal skins, gold, or gemstones); promote animal treatments (e.g., the exploitation of crocodile farms, the killing of baby seals for fur); adopt manufacturing methods (e.g., mercury for tanning skins) that pollute the local environment, or destroy the environment itself (e.g., the use of endangered tree species and exploitation of rare water resources by luxury hotels located in poor countries). In this scenario, the role of some luxury clothes brands (e.g., Burberry, Chanel, Luis Vuitton) and retail giants (e.g., H & M) cannot be ignored, as they have admitted to burning unsold stock, thus becoming bad examples of wasteful and non-sustainable actors (www.newsweek.com
Within this context, the present study will focus attention on luxury furniture companies, which offer products made out of various materials such as wood, metal, glass and leather, made from high-quality resources and reputed manufacturing processes. Notably, luxury furniture includes “movable pieces, which showcase the best of an elite quality and design associated with a certain era” [22
]. To our knowledge, newspapers have not reported similar cases of the bad management of “elite” furniture stocks, such as the aforementioned ones. On the contrary, research into the web pages of some of the major Italian companies contacted for this study found the words “sustainability” and “eco-design” often combined with the name of the brand, thus underlining the importance they give to sustainability and their overall attention towards good sustainable practices.
Overall, the furniture sector accounts for a considerable portion of global trade. According to the latest report by Zion Market Research [23
], the global furniture market was valued at approximately USD 331.21 billion in 2017 and it is expected to reach approximately USD 472.30 billion by 2024, growing at a compound annual growth rate (CAGR) of approximately 5.2% between 2018 and 2024. Approximately one-quarter of the world’s furniture is manufactured within the European Union, representing an €84 billion market that equates to a EU28 consumption of about 10.5 million tons of furniture per year, while employing approximately 1 million workers [23
]. Similarly, the luxury furniture business is an area with a great deal of growth. It was valued at approximately USD 23.05 billion in 2017 and it is expected to generate revenue of approximately USD 30.28 billion by the end of 2023, growing at a CAGR of approximately 4.65% between 2017 and 2023. Notably, Europe dominates the global market, with revenue estimated at USD 7329.8 million, due to the increasing disposable incomes of consumers and rising economic growth [22
The furniture sector appears to be particularly important from environmental standpoints since it is characterized by an intensive use of virgin raw materials and because the large use of adhesives, dyes and coating materials in furniture production results both in the emission of large volumes of volatile organic compounds and waste production [24
]. As concerning the waste issue, in particular, in 2017, the EU28 total amount of furniture waste equated to 10.78 million tons annually, accounting for over 4% of the total municipal solid waste (MSW) stream. Waste arising from commercial sources contributes 18% of total furniture waste generation. Moreover, 80 to 90% of EU furniture waste in MSW is incinerated or sent to landfills [25
With respect to luxury furniture, the great use of raw materials and energy is generally recognized. Raw materials mainly include wood, which accounts for the largest market share, followed by metal and other popular resources such as glass, leather and plastic [22
]. All these materials require different amounts of embodied energy. For instance, natural materials, such as stone and wood, imply less embodied energy than steel and plastic [26
]. This suggests that the definition of an overall model of resources used for this industry is rather difficult. However, the large employment of natural resources also suggests the importance of moving towards sustainable practices for reducing both the environmental damage and social impact of firms’ production [27
Hence, the importance of Circular Economy in this context looms, as it enables the prevention of resource depletion, the maintenance of materials and products in cycles, and the recycling of potential waste [6
]. Besides the environmental advantages, the adoption of circular practices in the luxury furniture sector can also improve financial performances. For example, companies engaging in Circular Economy, instead of spending money on waste management, could gain from selling waste materials to a company that uses them as input or find ways to reuse or recycle the waste themselves [28
Nevertheless, to the best of our knowledge, there is a lack of contributions examining the concept of Circular Economy among furniture companies, especially those operating in the luxury market segment [21
]. Extant literature investigated the role of eco-design [29
], the increasing use of recycling raw materials [31
] and the growing adoption of renewable energy by furniture companies [27
]. Certainly, these topics are strictly related to the concept of Circular Economy, but little is known about other practices, such as the recovery/reconversion of waste materials to create new products on which Circular Economy lays its foundations [33
Therefore, the main objective of this study is to explore to what extent luxury furniture companies are aware of Circular Economy principles, how they are implemented within them and which factors can influence their adoption. In this way, the research contributes to address a gap, still recognized in the literature, concerning the overall lack of knowledge on the concept of Circular Economy and characteristics, since it is yet in its early stage of development [28
At an operational level, quality management practices are also investigated in this study, since they can be particularly helpful for managers in implementing environmentally sustainable practices, which, in turn, are critical within a circular business context [34
]. Quality management practices, including Quality, Environmental and Corporate Social Responsibility Management Systems (QMS–EMS–CSRMS) and Product Certifications (PC) are investigated to understand how much they are adopted by luxury furniture companies and how they contribute to support their overall approach towards sustainability and circularity.
Two main research questions operationalize the above purposes:
How much do luxury furniture companies know about Circular Economy? What do companies do specifically? What factors motivate, support or hinder the adoption of Circular Economy practices?
Do luxury furniture companies adopt product and process certifications? For what reasons and purposes?
The study is exploratory in nature, since the Circular Economy model is still recent and the process of transitioning from the linear economic model is in its initial phase, as well as the scientific research regarding the luxury furniture industry. Accordingly, the research is based on a qualitative multiple case study carried out on four luxury companies operating in the Italian furniture sector. The findings add further knowledge to the scientific debate on Circular Economy, specifically concerning the furniture sector. Moreover, practical implications for companies derive from the analysis of factors affecting the adoption of Circular Economy practices and product/process certifications, which are particularly useful for those who are moving towards circularity.
The rest of the paper is structured as follows. Section 2
provides a literature background about the concept of Circular Economy and the main process and product certifications that can be adopted under a quality management perspective. Section 3
describes the research method, while Section 4
illustrates the main research findings. Section 4
discusses the results, also in light of previous research, and provides theoretical and practical implications. The final section highlights the main limitations of the study and proposes directions for future research.
3. Research Method
The research method for this study is based on a qualitative multiple case study. According to Creswell [83
] (p. 97), this method “explores a real-life, contemporary bounded system (a case) or multiple bounded systems (cases) over time, through detailed, in-depth data collection involving multiple sources of information […] and reports a case description and case themes”.
This approach is very useful to understand contemporary phenomena and practices [84
] and to provide background material to actual issues which are still unknown [86
]. Case studies, indeed, have been used by researchers not only to test theory [87
], but also to describe specific contexts [88
] as well as to develop theory [86
In this study, it was adopted mainly for render descriptions about the extent to which Circular Economy and sustainability practices are implemented by companies operating within the luxury furniture sector. In particular, the multiple case study [84
] was adopted because it allows a clearer understanding and characterization of the investigated phenomenon [90
], by comparing similarities and differences emerging from the analysis [91
The case study method is also known as a “triangulated” research strategy as it uses information collected in different times and contexts to corroborate the overall research findings. The triangulation of data provides greater depth to the study of phenomena from different perspectives [92
]. Therefore, the use of different detection tools is recommended as a requirement for information reliability and the overall quality of the research [94
]. Accordingly, in this study, even when direct interviews represented the primary source of data collection, a review of the companies’ websites and their profiles on different social networks has been carried out together with a careful analysis of further information provided by managers interviewed or sourced by the authors themselves. This involved a widespread search of documents, such as industry conference proceedings, papers, and consultant’s reports on each case.
Data Collection and Analysis
Since the definition of luxury is still blurry, luxury furniture firms for this study were originally selected according to the following criteria:
industry: manufacturing companies operating in the furniture sector, more specifically in the subsector of furniture and furnishing accessories, such as tables, chairs, shelves, display cases, magazine racks, umbrella holders and other accessories;
market: companies operating on a global scale;
firm size: small- and medium-sized companies with a turnover not exceeding €50 million and a number of employees less than 250 [95
luxury orientation: companies present themselves and are perceived as examples of excellence in their sector, by producing luxury items which provide unique features and high-quality finishing.
Four companies accepted to take part in the research, despite a greater number of firms having been originally contacted. This is in agreement with Yin’s guidelines [84
], suggesting that the number of units to be analyzed in a multiple case study is between four and twelve. Notably, with less than four cases, it is difficult to build a structured theory and to come to a “replication logic” [84
Primary data were collected using a semi-structured questionnaire that was divided into three sections, as follows: the first part covered the background of the company (i.e., size, number of workers, types of products, etc.). The second part assessed the company’s approach towards sustainability and Circular Economy, particularly on implemented practices and related enabling/hindering factors. Finally, the third part investigated the use of certifications and their role within both the communication strategies and the overall sustainable approach of the companies analyzed.
Prior to each interview, publicly available secondary material and promotional information provided by each board were reviewed to increase the researchers’ familiarity with the case.
The questionnaire was directly submitted to the companies. Each interview lasted for, on average, two hours.
The cases were analyzed following the Eisenhardt’s [89
] guidelines of within-case and cross-case analysis. Each case was deeply investigated to gain a rich understanding of the main practices developed to move towards Circular Economy. The cases were then compared to analyze similarities and differences and to gain greater understanding of the topic under investigation.
During the study, different methods for improving the quality of the research were adopted. First, some experts were involved to support the selection of case studies. Second, interviews were conducted by the same researcher to reduce the role of bias [96
] and respondents were given the opportunity to provide feedback on initial findings to reinforce the overall reliability of information. Moreover, to evaluate the validity and truthfulness of most of the propositions identified for the questionnaire, some answers were evaluated using the 5-point Likert scale, a technique widely used for measuring opinions and attitudes [97
5. Discussions and Implications
The present study provides evidence about the adoption of Circular Economy and sustainable practices in the luxury furniture sector.
A worthy degree of awareness and knowledge of Circular Economy principles seems to emerge from the analysis. Two companies declared to know well of the concept of Circular Economy and would like to deepen its principles, while one company declared to be well informed about the concept, as it has already gathered much information and developed adequate internal training aimed at promoting a circular model.
This is in line with previous literature analysis, which highlights the increasing attention towards Circular Economy among all companies [5
], including the luxury ones [21
Despite this attention, the analyzed companies declared to still be little involved in circular practices, especially concerning reuse and recycle actions, which are particularly important under a circular perspective. Consistent with previous findings of Yuan and colleagues [33
], this exploratory study seems to reveal a greater attention of companies towards reducing activities, concerning the use of raw materials or energy, which are directly related to company efficiency and economic benefits. Motivations that push the luxury companies to adopt Circular Economy practices, in fact, would be mainly of an economic and environmental nature. This reveals a partial understanding of the potential advantages linked to Circular Economy. In actuality, managers tend to be focused on perceived economic advantages, such as process efficiency as well as costs reduction, and environmental advantages linked to such practices, but they still underestimate the potential social impact, which can derive from their adoption in terms of the reduction of the unemployment rates or the general improvement of social well-being. Hence, several initiatives are needed to reduce this gap and to improve the companies’ awareness of both Circular Economy practices and related consequences.
Similarly, regarding the role of product and process certifications, despite their slight adoption, the research shows a good level of awareness by luxury companies about their opportunities. Managers interviewed recognized the economic and social benefits associated with their implementation as well as marketing tools to improve companies’ ability to enter new markets and to increase consumer loyalty and brand awareness. This suggests the overall appreciation by luxury companies of both efficacy and efficiency advantages linked to certifications. However, some initiatives—detailed later in the paper—could be useful to help managers in the implementation phase of such standards. Therefore, further implications can be proposed for both private companies and public institutions.
Because circularity requires regenerative and restorative practices [6
], companies should develop strategies that allow reducing as well reusing and recycling of components and materials, from the design phase. Referring to the specific context of the luxury furniture sector, designers play a crucial role as their creative freedom affects materials and characteristics of final products. In this regard, it would be desirable for these processes to be based on the use of recyclable materials, which encourages the reuse of products also in the end-of-life phase. Internal training as well as informal and planned meeting for discussing the circularity issues could be useful for sharing the diffusion of a new business model that requires an overall cultural change and a general involvement of all skills within the company, including designers. Moreover, internal communication could become critical to inform the personnel about the opportunities of circularity and its economic, environmental and social advantages. Periodic reports, along with the use of indicators, can be helpful for summarizing Circular Economy benefits and operationalizing its results.
Circular Economy also enhances the introduction of a new consumption model where property is replaced by access [28
]. This model should guide the transformation of consumer-owners into consumer-users, being aware that after the use of the product, they could return it, to be reused or recycled. Within the luxury market, this approach could be in contrast to a typical upper-class consumer behavior aimed at extending product life as much as possible [21
]. In fact, its high economic and affective value, could sometimes result in the consumer’s willingness to “pass” the luxury good to the next generation. Regardless, the transformation from consumer-owners to consumer-users implies more information and awareness about Circular Economy benefits. Actually, an adequate level of consumer awareness of Circular Economy has been recognized as critical by the companies interviewed for enabling Circular Economy implementation. Moreover, prior research also stressed this issue, by arguing that luxury purchasers are still less concerned by sustainability preoccupations, despite their increasing attention towards sustainability [21
]. As argued by Kapferer and Michaut-Denizeaut [21
], indeed, upper-class customers are often “interested mostly in the design (how the furniture looks/feels and what impression creates in their living environment), followed by customization [….] then of course the materials and structural design”. Therefore, it should be important to improve adequate training for the final market, which could be promoted by both schools and local institutions (e.g., events, workshops, seminars to raise individuals’ awareness on Circular Economy issues). Companies should also promote this new model of consumption, for example, by offering economic incentives stimulating consumers to give back products in the end-of-life phase. Certainly, this requires a widespread distribution network and high economic and managerial resources, which sometimes are lacking in smaller companies [98
]. However, it could be recommended for reinforcing reusing practices.
Another basic principle of Circular Economy concerns the reverse cycles. To create value from used materials and products, it is necessary to collect them and take them back to their origins [28
]. Therefore, companies could improve their ability to implement a reverse logistic and an efficient system of waste and product leftovers treatment that allows the return of such materials to the market. Furniture companies, as well as others operating in similar contexts, could move to implement such activities, as they can, by improving their ability to recover components into new products addressing the specific market needs. This requires financial and organizational resources, since important investments could be necessary for processing reused materials and waste disposal. The role of economic limitations and the lack of financial resources as potential obstacles to Circular Economy implementation clearly emerged in this study. In this regard, the role of governments and public institutions could be critical, as they could provide suitable economic and financial incentives and measures to support the companies’ efforts, in addition to a merely administrative approach [15
]. Technology and investments in R&D, in fact, play a crucial role in the development of Circular Economy as they allow the implementation of new innovative and creative processes by companies, but their actual management requires financial investments which, sometimes, could discourage firms, especially those of small size that are usually facing resource scarcity issues.
Finally, a further suggestion can be proposed from the analysis of product and process certifications. Notwithstanding the recognition of potential benefits linked to the use of international standards of certification, they are very little applied by the luxury companies interviewed. Literature shows that such standards may be particularly helpful to aid managers in implementing environmentally sustainable practices, thus moving towards a wider Circular Economy model [34
]. Thus, they should be improved to operationalize the general attitude towards circularity, to strengthen the sustainable approach within the company by engaging all skills and internal figures, and to communicate such an approach to consumers and other stakeholders.
Managers interviewed did not give detailed explanations about the reasons underlying the low use of certifications, saying that they are working to implement them in the near future. Certainly, this deserves further analysis. However, based on prior research [73
], it is likely to suppose that the adoption of product and process certifications tends to be very difficult for companies mainly for high implementation and maintenance costs, but also for the high bureaucracy and organizational complexity that they brought with them. The implementation of IMSs and product certifications requires time and figures dedicated exclusively to their management and this could be the most relevant limitation to their implementation for companies [100
]. In order to overcome such limits, a change in companies’ culture and in top management involvement could be recommended. Companies should see beyond the initial barriers to the adoption of these certifications, trying to think of them as a medium–long-term investment that will lead to organizational and environmental improvements, as well as to brand image and competitiveness advances [68
]. In this respect, useful suggestions also come from the study of González-García et al. [27
], which demonstrated how the implementation of DfE in the development of furniture products can help to introduce innovations in the production process, which allows the reduction of the environmental impact as well as improvement for the firms’ overall efficiency in a short period of time.
Moreover, product and process certifications could be helpful for supporting the luxury companies’ ability to develop a communication strategy aimed at highlighting their commitment to sustainability, going beyond the main objective of providing luxury experiences or host events [21
]. Luxury companies, indeed, should communicate more about their sustainable efforts, by informing consumers and stakeholders. Thus, putting environmental issues on product labels and packages should help luxury companies to communicate not only the product features, by using truthful claims and messages, but also their sustainable orientation and the overall characteristics of the territory in which they operate. In this study, the two companies interviewed clearly recognized the role of product labels as communication tools for sharing sustainable values.
Crucially, with respect to communications strategies, luxury companies could also improve their performances by developing ad hoc activities, which could have a relevant impact in the long run, such as, special days in which they open their workshops to the public to show how products are made and how materials are used and recycled within the company.
Overall, a further suggestion could be derived from the literature, which highlights the importance of a favorable system condition. In particular, Schuler and Buehlmann [101
] demonstrated the importance of centers of excellence or industry clusters, based on strategic partnerships between manufacturers and suppliers, customers, supporting institutions, and other stakeholders, in order to enhance the development of a value-added products culture surrounding the furniture sector. Industry clusters could be critical for establishing and maintaining a global competitive position [102
]. In Northern Italy, for example, a tight cluster of chair manufacturing-related businesses produce 30% of the world’s annual wooden chair production [101
]. As highlighted by Schuler and Buehlmann [101
], each actor of the cluster reinforces the other, thus strengthening the firms’ competitiveness, thanks to the overall sharing of resources, competencies and skills.
The collaboration between value chains and sectors could be very important for establishing a large-scale circular system [6
]. Relationships with other firms could provide some facilities, and help companies for product development and information sharing, as well as sectoral standards adoption. Particularly, small businesses may need guidance in areas such as the recovery, reuse and remanufacture of goods and materials [37
]. Moreover, within a network perspective, the waste produced by a company could become the raw material for another and companies in the same cluster could share materials and energy flows, thus enhancing both cooperation and resource exploitation reduction.