Under free market capitalism, success is usually defined as follows: sell, profit, expand; sell more, expand more; profit more; expand. Boardroom executives and investors relentlessly watch the line on the chart to move up and out, increasing the pressure on their producers and workers to provide results each and every quarter. Similarly, nations gauge their overall economic performance using metrics like the GDP (Gross Domestic Product) to show their economies are prospering and to encourage unrelenting expansion. But this model fails to consider one very important question; How can infinite growth be sustainable in a world with limited resources?
The clear answer is that it can’t, at least not in it’s current form. When we switch the lens from economic to ecological statistics, we start to see that economic success in the form of growth comes at a steep ecological cost. Not only are our emissions causing global climate change; but we are literally decimating and polluting our most crucial resources- fresh water, fertile land, and ecological webs which support all life on earth- in the crusade of unbridled growth. What might be sustainable for a company, might not be sustainable for the environment.
That very paradox is what is making it so difficult for companies to operate under alternative models while still being “successful” within free market capitalism, which demands growth and profit at any cost. In order to truly become sustainable, companies need to shift their operations to operate under a new definition of success- one that requires entirely new strategies and metrics, possibly based on entirely different economic approaches, such as the degrowth model.
Degrowth is an economic theory that argues that economic growth cannot be maintained continuously and is in opposition to capitalism’s theory of limitless growth. It even suggests that in order for humanity to stay within the confines of our planet, the growth economy must contract and production must be capped. But in order to convince a company to adopt a degrowth business model, a business case first needs to be made as to how a degrowth strategy could be implemented while still allowing the company to remain profitable.
This case study explores how a degrowth strategy can be integrated in conjunction with limited edition collection models to create profitable collections with limited production runs, as explored through several case studies. It aims to demonstrate how companies could be incentivized to put production limits on their own products, with eventual benefits towards creating a more sustainable business operation.
A Little Background
Our planet Earth is a delicately balanced system based on complex, interwoven ecosystems and finite as well as renewable resources. Since the industrial revolution, human activity has pushed the limits of these ecosystems and resources to a point that has never been observed in history before. The exploitation of resources as well as environmental damage caused by our industrial activities has led to a host of negative effects: mass biodiversity loss, increasing global temperatures, chemical pollution, and vital resource depletion. Despite the large amount of research and evidence backing the assertion that human activity is behind these negative environmental consequences, the political and economic forces driving the system have been slow, if not completely ineffective, at changing.
Why are these systems lacking mobilization in the face of imminent disaster? One theory is that our current economic and political system is based on metrics that don’t take into consideration the value of the commons (Kallis et al., 2018). It runs on a system of commodification that fails to address intangible assets vital to human existence. Also, it runs on the assumption that growth can be sustained indefinitely and uses metrics, such as GDP, that reinforce this idea. The concept of degrowth challenges the existing economic and political model that growth can be sustained indefinitely.
To integrate a degrowth strategy, companies will want to address the question of how to limit their production while retaining brand value and successfully generating revenue. This means that to get a company to voluntarily limit production, a case needs to be made as to how a company can create value based on factors besides producing and selling large quantities of physical goods.
Planetary Boundaries, Degrowth, & Sustainability
Planetary Boundaries is a concept introduced in 2009 by a group of environmental scientists that aimed to identify and define the “safe operating limits of humanity” on Earth. Of the 9 systems identified, the paper determined that we have already exceeded our “safe operating boundaries” in at least 3 key areas, including the nitrogen cycle (due to agriculture), rate of biodiversity loss, and climate change, with several more systems at risk (Rockström et al.,2013). While the cause of this transgression can’t be pinpointed to one specific industry, but rather to a complex, interwoven system, we do know that our human activities, especially in the last 100 years, are to blame. Based on the evidence laid out by Planetary Boundaries (Rockström et al., 2013), we can make the case that our current means of producing and operating are not sustainable since they are already exceeding planetary boundaries and putting additional systems at risk. Because our current production systems, for food, fashion, technology, and products are closely linked to our consumption habits, we can’t deny that consumers and producers alike have had a hand in creating this problem, and need to take a closer look at the factors that got us here. One such factor is the way we measure economic progress based on growth.
The modern mentality that pursues infinite growth in the form of measuring economic output, most often via GDP, rose to prominence in the US in the 1950s as a political priority and was termed “growthmanship” (Kallis et al., 2018). According to Research on Degrowth (Kallis et al., 2018) the model of “purposeful economic growth had precursors in colonial doctrines of improvement and development and was used to stabilize the international economic order after each world war,” hence leading to global integration of the system. While many advocates argue that this model could be translated to a model of “green growth” by switching from fossil fuels to renewables, the data suggests that even with this switch, we will not succeed in reducing our emissions to levels that will prevent rising global temperatures from exceeding 2 degrees Celsius. Therefore, this research suggests that the only future way to reach sustainability in this system is by adapting the idea of “degrowth,” which is defined “as an equitable downscaling of throughput, with a concomitant securing of wellbeing.”
“Above a certain level of GDP, income does not make a difference in wellbeing—equality does.”(Kallis et al., 2018)
It goes on to provide evidence that supports the idea that “above a certain level of GDP, income does not make a difference in wellbeing—equality does.”, and that “in the long run, overall happiness does not increase as a country’s income rises.” (Kallis et al., 2018) While much of the conversation around degrowth revolves around testing economic models in which this system could work, any attempts at integrating it in a practical sense lack political and commercial support. The paper concludes, “Without the voluntary work to conceive and embody alternative ideas, explanations, practices, and institutions today, an involuntary end to growth may well lead to a state of continual economic depression in which islands of wealth are sustained in seas of deprivation, without pretense of democracy and social justice.” (Kallis et al., 2018) This implies that sooner or later, unless we, as a society, pre-emptively explore the idea of integrating degrowth within our production systems, we may eventually be forced to as a consequence of our unsustainable actions.
This is where I would like to take a closer look at the potential of limited edition collection models as a method for companies to “reduce throughput” and integrate a degrowth strategy into their business models. Limited edition collections run on the model that only a set number of items have been made, and because only a limited quantity exists, the products are perceived as more valuable & exclusive by customers. Artificial scarcity is something that has been utilized in business and marketing for a long time to drive up the value of goods. In fashion, a version of this can be seen via limited edition collections, with numerous examples of successful limited edition collections, as we will see later.
Limited Edition Collection Models
The term limited edition broadly refers to a product that has been produced in restricted quantities. According to Scarcity Message Effects on Consumption Behavior: Limited Edition Product Considerations, from a brand perspective, “The central principle behind offering limited edition products is to create a sense of exclusivity among the target consumers.”(Jang et al., 2015). By emphasizing the scarcity message of limited editions, brands have successfully used this marketing incentive to elevate consumer brand perception to make their products seem more rare and valuable. There has been a strong body of research to affect the psychological drivers behind this consumer behavior, one of which is the link that “when purchasing a scarce commodity, individuals create positive perceptions toward products by satisfying their desires for uniqueness or distinctiveness”(Jang et al., 2015). Customers are driven to purchase the item to be one of the few people to own that product, and deem it more valuable due to this “artificial scarcity”.
In many cases, limited edition collections have typically been the result of exclusive brand partnerships and collaborations between multiple companies or designers, set for a limited time or quantity, or general limited edition production runs for products. Limited edition production runs have been utilized by luxury and everyday streetwear brands alike. One such example, Hermes, has been able to build a strong cult following around their iconic Birkin bag, by limiting production to less than an estimated quantity of 70,000 units a year (Barker, Singapore, Tan and Cheong, 2022). This, combined with effective brand messaging that emphasizes craftsmanship and heritage, has led this bag to become a highly sought-after item despite its 5 figure price tag. The result is that Birkin bags are more often than not treated as an investment and heirloom, and are often passed down through generations or resold later at a much higher price.
Another valuable case study of the success of limited edition models can be examined for the fashion brand Supreme, valued at nearly 1 billion USD today. Supreme initially started as a skatewear brand in New York but successfully elevated itself to be one of the world’s top fashion brands through unique and non-traditional guerrilla marketing campaigns, limited edition collection drops, and celebrity endorsements. Supreme’s unique value proposition differs from other luxury and fashion brands in that its products aren’t valuable because they are expensive, but rather because they are notoriously difficult to attain. To purchase a Supreme product, customers are first put on a waitlist through Supreme’s website, then have to travel to one of its 11 brick-and-mortar stores where the products are explicitly sold. Oftentimes, people camp out in long lines in front of the stores before collection drops to get the first pick of products. Within the store, customers are limited to “one color per style”. These restrictions do not only drive up perceived value of the products- but of the entire brand- and the scarcity aspect means these products also fetch a high amount when sold on secondary markets.
In the instance of Supreme, the limited edition model was not initially intended, despite it turning out to be incredibly successful for the business. According to an interview in Esquire magazine with Supreme founder, James Jebbia, the scarcity resulted from him “being uncertain how much he’d be able to sell, and placing suitably modest orders with his suppliers.” (Barker, Singapore, Tan and Cheong, 2022) This suggests that most companies have not considered the sustainability implications of intentionally doing limited collection runs and producing limited quantities of goods. Rather, it is seen as a marketing incentive and therefore the potential to integrate this model with degrowth as a strategy for sustainability remains largely untapped.
Sustainability Benefits Integrating Limited Edition Models for Degrowth
The existing research around the benefits of integrating limited edition models has largely focused on the marketing incentives behind it, the appeal of using artificial scarcity to influence value perception for consumers, and how the appearance of exclusivity works to elevate a brand’s image (Shin et al., 2017). However, the topic of the utilization of limited edition collections to address sustainability challenges remains largely unexplored.
First, we must acknowledge that the definition of sustainability for earth and humans as a whole differs from the definition of sustainability for a business. Any business that does not successfully generate revenue by selling a product, or a service will likely fail. This is one of the key challenges for companies to integrate sustainable practices as a whole- there is a paradox between balancing the needs for the survival of the business with the needs for the survival of humans as a species. This is why it is important to recognize the potential benefits of limiting production, not just from an environmental perspective but also from an economic one. In practice, this translates to a few very clear benefits for brands that are looking to make their business models more sustainable.
Capping & Tracking Resources and Emissions in Collections
For one, “consumers are more inclined towards green products and feel no hesitation to pay more for the less environmentally harmful products” (Ayadi & Lapeyre, 2016). As the effects of climate change become more apparent over time, this consumer inclination will only intensify, and sustainability efforts and messaging will become increasingly important to a brand’s success. But without measurable KPIs (key performance indicators) and transparent data to measure the true environmental impact of a clothing collection or product line, consumers may also become more scrupulous in what they accept as “sustainable”. One benefit limited edition collections can provide is accurate ways to track resource usage in the production of a line. Since the production is limited to a set amount of items and not an ongoing endeavor, a fashion brand can calculate exactly how much material, water, energy, and labor was used in a limited edition collection and report on this accurately. They can also factor in or offset any associated carbon emissions. This transparency in production and resource cost will become increasingly important as certain resources, such as freshwater, continue to be threatened by our current modes of consumption and production, and as consumer interest in these metrics increases.
Funding Innovations Through Multi-Brand Collaborations
Another unexplored benefit of the integration of limited edition models is the potential for innovation through multi-brand collaborations. For example, in the realm of biomaterials for fashion, a major challenge with new and innovative materials is the high cost of development and production, and the unpredictability in terms of how these materials might be perceived and eventually adopted by consumers. Through limited-edition product runs, the cost of production can be calculated and capped, while the perceived scarcity value incentivizes consumers to buy. This creates a positive feedback loop- if the product is tested on the market in smaller quantities, and succeeds- more investment is allocated toward the research and development of these new, innovative materials. This means brands can continue generating perceived brand value, while testings new materials, and in return get social proof that the materials will be positively adopted by consumers. The hard marketing data brands can get from this sort of information can help them produce funding to scale up, further increasing the likelihood of them becoming a viable competitor to less eco-friendly alternatives.
One example of this can be seen in the case of Stella McCartney’s collaboration with biotextile developer Bolt Threads to make Mylo, a mycelium-based vegan leather (Vogue Hong Kong 2022). Thanks to the fashion designer’s support in developing the material, Bolt Threads showed promise as being the company to bring their patented mycelium leather, Mylo, to market. Despite launching partnerships with and receiving investment from Adidas, Kering, and Lululemon, the material halted production in 2023, before ever making it to market, due to Bolthreads running into funding, scaling, and patent issues. While additional partners in the biomaterial world are stepping in to continue developing the material, consumers likely won’t see Mylo-based products on the market anytime soon. This raises the question of whether the material would have encountered the same funding and scaling problems if it had been initially released into the market in a more constrained capacity. Or would the perceived exclusivity- and the additional brand value generated- have bought Bolt thread enough social proof to attract more investors? In this case, the obvious benefit of incorporating a limited edition collection model would have been to shorten the time to market and enable a quicker return on investment in the form of market data and social proof, all without encountering the production challenges associated with scaling up to the extent that their partners demanded.
Degrowth Strategies Limit Overhead Costs
By operating within a degrowth model that integrates limited edition collections, companies do not have to contend with the ever-rising overhead costs that come with company expansions. The more stores or offices a company opens, people it hires, and products it produces, means it constantly has to increase revenue generated year after year just to keep up with it’s operating costs. If operating costs are stabilized, however, due to capping operations and numbers of items produced, any additional revenue generated translates to increased profits. These profits can directly be reinvested in the company and it’s supply chains by increasing wages and employee benefits, innovating products, generally building a better, more efficient operation to ensure the long-term survival of the company.
Caveats of the term Limited Edition
While we can see how limited edition models and degrowth strategies can create both economic and ecological benefits for businesses, there are a few caveats that must be mentioned. The artificial sense of urgency created by the term “limited edition”, when used by a company exclusively as a marketing term, and not in conjunction with a limited production or degrowth production strategy, can have a negative consequence of nudging consumers towards overconsumption. When a company claims their products are “limited edition” but does not necessarily disclose how many units are in production, nor does it have a way of tracking the products as being authentic (and therefore deterring counterfeitism)- the term limited edition is a marketing tool at bests. Therefore, businesses and consumers alike should not think that labelling a product as limited edition equates it to being sustainable.
Final Words
The limited edition degrowth strategy I’ve explored in these case examples is meant to demonstrate how a business could be incentivized towards limiting production when trying to be more sustainable. While degrowth continues to be an elusive and unexplored political and economic concept, it will be a necessary strategy for companies to adapt to bring us within a sustainable limit of our planetary boundaries. As evidenced by several case studies, the integration of limited edition collection models is an effective tool in generating revenue for a brand while placing caps on production. The sustainability implications and benefits of limited edition production runs remain largely unexplored despite showing great promise toward integrating a degrowth agenda.
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