Digital Marketplaces as Catalysts for Circular Economy in Construction: Exploring the Role of Modular Business Models

Abstract

Question: The lack of profitability limits the adoption of deconstruction practices in the construction industry, largely due to inefficient secondary markets for recovered products. Although digital marketplaces (DMPs) can improve stakeholder connectivity and economic appeal, their uptake remains constrained by limited product diversity, fragmented operations, unreliable product information, and a lack of standardization. This results in continued reliance on virgin materials and limited recovery from end-of-life buildings. Purpose: This study investigates how characteristics of salvaged products from the built environment influence combinations of business models (BMs) in DMPs to enable lean operational processes that support improved reverse supply chain logistics. Research Method: A two-stage methodology was applied. First, the business characteristics of existing DMPs in construction were extracted by applying Osterwalder’s Business Model Canvas (BMC) and aggregated as business model elements (BME) through morphological analysis. Second, these BME were mapped against building shearing layers using an interaction matrix informed by product-specific reuse criteria and iterative brainstorming sessions. Findings: Analysis of 29 DMPs resulted in 21 BMEs mapped across 5 building shearing layers. The interaction matrix shows that while some BM elements apply across all layers, others are strongly product-dependent, influenced by quality requirements, reuse feasibility, regulations, turnover time, and ease of disassembly. A single, standardized BM may constrain circular-lean objectives. However, DMPs in the construction industry have yet to implement tailored BMs that align with product-specific differences. Limitations: The analysis is limited to digital marketplaces in Europe and North America and does not establish quantitative KPIs to evaluate the effectiveness of modular business model configurations. In addition, the interaction matrix requires empirical validation by industry experts. Implications: The interaction matrix provides guidance to DMPs for configuring business models aligned with lean principles to support circular economy objectives. Value for authors: The authors aim to demonstrate that the BMs function as operational processes in DMPs and should therefore be product-specific rather than uniformly applied across platforms. Keywords: Circular Economy, Lean Digital Marketplaces, Lean Digital Platforms, Circular Business Models, Circularity Paper type: Full Paper