The transition from linear to circular systems has become a strategic priority for companies that must reduce resource consumption while maintaining competitiveness. Traditional business models, based on product ownership and one-off sales, often limit firms’ ability to manage products beyond the point of sale. In response to these shortcomings, subscription-based business models are attracting growing attention as a way to rethink production and consumption models, shifting the focus from ownership to access.
In Italy as well, subscription and rental models already coexist with the traditional sales model, including in the fashion sector, through companies such as Drexcode, and in food and beverage, with services like Winology. Given Italy’s strong reputation in fashion, luxury, and design, including apparel and furniture, this model could prove particularly effective in extending product life cycles through reuse, repair, and regeneration, while also strengthening customer relationships. More broadly, subscription-based approaches are also suitable for other sectors involving physical products, such as medical devices and consumer electronics, where maintenance, upgrades, and recycling can be integrated within a product-as-a-service framework.
Research by Behzad Maleki Vishkaei and Pietro De Giovanni, conducted as part of the Sustainable Operations and Supply Chain (SOSC) Monitor at SDA Bocconi School of Management, shows that subscription models tend to outperform traditional ones, provided certain conditions are met.
The study examines how subscription-based business models can support the transition toward circular systems while maintaining economic sustainability. It focuses on how to design and manage subscription systems that effectively combine circular economy practices and profitability.
This research is particularly relevant for managers, practitioners, and scholars interested in subscription models, product-as-a-service strategies, and the implementation of the circular economy. It provides actionable insights for decision-makers who must balance customer satisfaction, operational complexity, and sustainability objectives when adopting or scaling subscription-based solutions.
Controlling the product life cycle
In traditional linear systems, companies sell products and transfer ownership to customers. Once the sale is completed, the firm generally loses control over how the product is used, maintained, reused, or disposed of. As a result, circular economy practices—such as reuse, refurbishment, and recycling—largely depend on consumer behavior or on external actors, such as charities, recycling centers, or local authorities. This fragmentation makes circularity difficult to manage and often limits its overall effectiveness.
Subscription-based business models fundamentally change this logic. By retaining ownership of products and offering access through subscriptions, firms can actively manage the entire product life cycle. Products can be shared among multiple users, refurbished and reassigned at different quality levels, and ultimately recycled within a closed-loop system. This structure creates concrete opportunities to implement the three core practices of the circular economy: reduction, reuse, and recycling.
However, these advantages also entail new challenges. Subscription systems require additional operations, such as screening activities, repairs, dynamic inventory management, and reverse logistics. If not properly managed, these activities can increase costs and undermine both profitability and sustainability. Understanding how to design subscription models capable of effectively managing these trade-offs is therefore essential.
A comparison at equal profit levels
The research develops an analytical model to study a closed-loop subscription system, in which products circulate among customers, screening and repair centers, recycling facilities, and suppliers. Products are offered at different quality levels, allowing firms to extend their useful life by reassigning them over time to different customer segments.
To analyze this system, the research adopts an approach based on Closed Jackson Networks and queueing theory, which makes it possible to represent the movement of products within the system, inventory accumulation at different stages, and the impact of operational capacities on overall performance. Two managerial decisions emerge as central to the analysis:
- the number of products circulating within the subscription system;
- the subscription fees associated with different quality levels.
The model also explicitly compares a circular subscription system with a traditional linear system that generates the same level of profit. This comparison makes it possible to assess whether subscription models actually deliver superior circular economy outcomes, without automatically assuming greater sustainability.
The results show that circular subscription models generally involve greater operational complexity and additional costs related to screening, repair, and recycling activities. However, these costs can be offset through appropriate inventory optimization, effective pricing strategies, and revenues from recycled materials. Importantly, the research highlights that subscription models tend to outperform traditional ones when consumer participation in reuse and recycling practices is limited, a condition that is increasingly common in many markets.
Four factors to consider
The research demonstrates that subscription-based business models can be powerful enablers of the circular economy, but only if they are carefully designed and managed. Retaining product ownership allows firms to actively control circular practices, but success depends on the alignment between operational decisions, sustainability objectives, and profitability.
For managers, the findings highlight several key operational implications:
- Circular subscription systems require careful optimization of inventory levels to avoid excessive costs while ensuring adequate product availability.
- Product differentiation by quality level and the adjustment of subscription fees can help extend product life and increase circularity.
- Screening and repair activities are often more critical than recycling alone, as they promote reuse and reduce the need for new products.
- Subscription models are particularly effective when traditional systems rely heavily on voluntary consumer participation in circular practices.
For practitioners and decision-makers, the research offers a structured framework for assessing whether a subscription-based approach truly improves circular performance compared with a linear alternative. Rather than viewing subscription models as inherently sustainable, the study underscores the importance of measuring concrete outcomes in terms of reduction, reuse, and recycling.
Overall, the research suggests that well-designed subscription-based business models can simultaneously improve economic performance and circular economy outcomes, offering firms a practical pathway to move beyond linear systems while maintaining competitiveness.
Vishkaei, B. M., & De Giovanni, P. (2025). “Accelerating the transition from linear to circular systems through a subscription-based approach.” International Journal of Production Research, 1–24. DOI: https://doi.org/10.1080/00207543.2025.2607642.
