Designing a Data-Driven Circular Business Model for Old Clothes in the Digital Era: Insights from Youth-Led Recycling Clubs

Abstract

Fast fashion and textile waste have become urgent sustainability challenges that demand immediate solutions, yet digital technologies are creating new opportunities for the fashion industry to build data-driven circular business models. This study develops and demonstrates a data-driven circular business model for used clothing based on a case study of a youth-led clothing recycling club established in 2024. The paper builds upon operational research findings on low-carbon inventory management under carbon tax and carbon labeling policies, as well as optimization research on recycling bin placement based on user preferences and social network data, integrating analytical tools into a comprehensive business model framework that encompasses value creation, value delivery, and value capture. Empirical data from the club's operations—including donation volumes, digital engagement records, and estimated carbon emission reductions—combined with qualitative insights from participants, are used to map current and potential circular value flows. The analysis reveals that digital tools such as data-driven location planning, carbon emission dashboards, and personalized reminders enable the transformation of clothing recycling from ad-hoc, dispersed collection methods into an integrated circular model that coordinates interactions among donors, schools, charitable organizations, and secondhand resale platforms. The paper's contributions include: (1) proposing a conceptual framework for a data-driven circular business model specifically for the used clothing sector; (2) demonstrating how youth-led initiatives can serve as "living laboratories" for digital sustainability innovation; and (3) providing managerial and policy implications for scaling similar models to other communities and regions.