APPLICATION OF DESIGN THINKING IN RETAIL BUSINESS MANAGEMENT BASED ON GRANT ACTIVITIES, VENTURE MECHANISMS AND CIRCULAR ECONOMY PRINCIPLES

Abstract

The article examines the theoretical and methodological foundations of applying design thinking as an innovative management methodology in the retail business management system amid the transition to a circular economy. The relevance of the study stems from the absence of a comprehensive approach that integrates human-centered design thinking tools, grant and venture financing mechanisms with closed-loop principles in retail activities. The purpose of the article is to develop an integrated retail business management model at the intersection of design thinking, grant activities, venture mechanisms, and circular economy principles. The study employs a systems approach, comparative analysis, scenario modelling method, and authorial calculated indicators: Circularity Index (CI), Grant Coverage Ratio (GCR), Design Thinking Efficiency Index (DTEI), and Venture Multiplier (VM). Five stages of design thinking are revealed in the context of retail business and their relationship with grant programs and circular practices: empathy mapping – for identifying consumer behaviour patterns regarding reuse; HMW analysis – for formulating circular management challenges; prototyping – for testing closed-loop models; testing – for validating solutions in real environments; scaling – for spreading circular practices supported by venture capital. A comparative analysis of five management models was conducted (traditional management, design thinking without CE, design thinking with grants and CE, venture model, integrated model), with the integrated model demonstrating the highest effectiveness with an integral score of 4.7 out of 5.0, exceeding the traditional approach by 42%. Calculations confirmed that applying the proposed model allows achieving a circularity index of 54%, innovation ROI of 78%, and a venture multiplier of 3.6×. A practical implementation roadmap for the integrated model was developed, covering four stages with a total horizon of 12–24 months and providing an optimal financing structure: grants (40%), venture capital (35%), own capital (25%). The scientific novelty lies in systematizing the relationship between design thinking, grant activities, venture mechanisms, and circular economy principles as a holistic retail business management system. The practical significance of the obtained results lies in the ability of retail sector enterprises to use them for developing innovative business models with diverse financing sources and ensuring long-term competitiveness in the context of sustainable development transition.