Bridging gaps in the demand and supply for circular economy: Empirical insights into the symbiotic roles of consumers and manufacturing companies

Abstract

Given the systemic nature of the circular economy (CE), its successful implementation necessitates a holistic approach involving all the relevant stakeholders across the production and consumption processes. This study focuses on the gap between the demand and supply of circularity by investigating transitioning profiles of consumers and manufacturing companies and examining their symbiotic roles in shaping a systemic circular transition. Using two extensive surveys involving 1000 consumers and 1443 manufacturing companies in Italy, and employing a cluster analysis methodology, we examined pro-environmental purchasing profiles among consumers and varying levels of circular practice integration among companies. The cluster analysis reveals four different consumer cluster based on their attitudes towards CE during the purchasing and post-purchasing phases. While the majority focused only on a single purchasing aspect, approximately one-third consistently optimized, preserved, and enhanced product value throughout the purchase phase and post-purchase use. Conversely, companies were grouped into five clusters according to their varying levels of circularity integration across the product life cycle. Only a small subset of companies fully embraced circularity throughout their entire product life cycle, with most concentrating their efforts on specific phases of the value chain. The findings highlight a significant gap between circular demand and supply: while the biggest cluster of companies comprises linear manufacturers, linear consumers represent the smallest segments. This underscores the need for comprehensive engagement from both manufacturers and consumers in shaping circular production and consumption. Based on a stakeholder perspective, the study opens up a discussion on how to bridge this gap, emphasizing the role of consumers with pro-circular behaviors in pushing companies to integrate circularity principles more thoroughly, and the role of companies in raising the awareness of linear consumers about the impact of their purchasing choices. By profiling circular companies and consumers and unveiling their behavioral tendencies, this research provides actionable insights for policymakers and managers navigating the circular transition.