Unlocking Commercial Opportunities with Digital Product Passports

Shifts in both customer shopping behaviours and regulatory requirements from governmental bodies are moving digital product passport (DPP) technology from the edges of brand consideration towards a central strategic focus.

A digital record that accompanies a product throughout its entire lifecycle, DPPs record key information relating to the provenance of materials, manufacturing and supply chain information, the item’s environmental impact, and repair, recycling and circularity services to consider at end-of-use. Information is accessed on smartphones by scanning digital markers, such as an NFC tag or QR code. Since 2006, Certilogo, a company specialising in connected products and digital authentication, has implemented engaging digital experiences and DPPs within the fashion and luxury industries. Today, more than 540 million items from its brand partners have a complementing digital asset.

The technology is increasingly timely as, last year, new EU regulations were announced that will require fashion and other consumer goods to be fitted with unique DPPs as early as 2026. Meanwhile, as luxury and fashion goods become increasingly commoditised, authentic brand identity is increasingly key. Indeed, ‘dupe’ culture is training Gen-Z and Gen Alpha to seek out comparable goods for the champion products they aspire to — a sentiment which extends into counterfeit goods. A June survey conducted by the European Union Intellectual Property Office, showed more than 50 percent of consumers between the ages of 15 and 24 said they had purchased at least one counterfeit product online in the last 12 months.

Indeed, the total value of counterfeit and pirated goods will hit $3 trillion this year, triple the amount in 2013, according to the Organisation for Economic Co-operation and Development. Sophisticated authentication measures are a critical component for many consumers to embrace the secondary market and place trust in peer-to-peer transactions.

To learn more about how applications of DPPs can unlock growth, engage new generations of consumers and solve brand pain points, BoF and Certilogo hosted a roundtable discussion at Maxim’s in Paris, gathering marketing leaders from across the French fashion and luxury sectors.

Conducted under the Chatham House Rule, executives from Balenciaga, Jacquemus, Veja, Kering, Patou, Courréges, Balmain, among others, were in attendance. Below, BoF shares condensed and anonymised insights from the discussion.

Turn compliance into a growth opportunity

“Right now, the urgency is compliance. It’s the biggest business headache and problem to solve, and it’s the main driver for brands to get digital product passports on their products,” said one guest. “However, while they make sense from a compliance perspective, we need to think strategically about the evolving use-cases and opportunities. We want to make decisions that make this implementation future-proof.”

“From a compliance piece, there is a real anxiety around the data,” agreed another guest. “But ensuring that you comply needs to be part of a bigger incentive. Before you have a clear vision on your supply chain, you need to marry the compliance factor, the risks, the opportunities. That’s when we’ll start to see a real roadmap of the downstream opportunity.”

“Transformational governance is the elephant in the room, but we need to envision the opportunities and hygiene factors that should be baked into this technology,” said another attendee.

Authentication remains a primary consumer use-case

“We’re seeing a lot of small pilots that are looking upstream at the traceability and authenticity side – that level of comprehensive services which is all about supporting the client, is key,” said one guest. “That service that allows remote authentication remains the most relevant use-case for shoppers.”

“At this current stage, DPPs are all about serving a purpose — something that is meaningful to consumers. Of course, it makes sense to start thinking today about those future use-cases, but brands should be scaling the applications that offer the most value and help to build the customers’ connection to the product,” agreed another guest. “Authentication is a big problem-solve.”

Consider how DPPs could build customer lifetime value

“In terms of functionality, DPPs, in theory, enable brands to draw some powerful insights,” added one guest. “Yes, they’ll be able to get greater insights into the lifecycle and use of products but, in theory, send a signal to customers that it’s time to repair an item or that there’s a resale opportunity to sell your product back to the brand. This unlocks new revenue, but critically helps to build customer lifetime value.”

“DPPs could help improve the customer experience all with the goal of increasing the lifetime value of the customers,” agreed an attendee. “As soon as you have NFC built into a bag or shoes, then you have a communication tool in that bag or in those shoes. Of course, GDPR is an important consideration, but if you can send signals about circular services, that’s a really powerful second touch with the customer.”

Explore entertainment strategies as a future DPP use-case

“DPPs could unlock the possibility for the consumer to experience the physical product in multiple dimensions — playing into ideas of education and even entertainment,” said an attendee. “There are some neat capabilities such as sharing music, games or creative content from your brand [universe]. DPPs could be another, more personal route to be building and sharing these sorts of things with customers.”

It’s interesting to think about something fun at the end of that connection that’s opened up by DPP technology, said another guest. “Yes, that could be access to discounts or circular methods, but it could also be a scan to gifts, new products, digital assets that can be shared on social media. It feels like a whole new frontier of customer engagement, although we must ask if customers are ready for this kind of use.”

Acknowledge the need to evolve plastic components of DPPs to align with sustainability goals

“One obstacle we face in implementing this technology is ensuring that any hardware attached to DPPs work with our sustainability objectives. For instance, ensuring their use doesn’t impact the recyclability of products,” added one guest. “We have the resources to innovate this if we collaborate across the industry.”

“Chip makers are aware this needs to be addressed, but there is a bigger issue playing out across many sectors,” countered another guest. “We have global anonymous supply chains with middlemen, agents and unreliable data — we have a responsibility to go back and fix all these bad practises downstream — and that’s a much bigger conversation.”

Break down team silos for implementation and scale

“We need to see two levels of collaboration in order to agree on and develop the business models that DPPs could bring. The first one is cross-functional and must be led by a brand’s executives. We must ask, which functions are critical to get the necessary compliance and opportunity in the room?” said one guest, in an opening comment. “And then, the other collaboration component is really on the industry level. We are in the early stages of conversations, but deeper collaboration will be needed for us to go beyond the pilot stage.”

“The brands who are winning in this space are getting out of their silos and building cross-functional cases for implementation. You need sustainability teams, operations, IT experts all collaborating together — even the e-commerce and marketing teams,” added one guest. “If it’s isolated to just one function within the business, brands will miss out on connecting all the important key metrics.”

This is a sponsored feature paid for by Certilogo as part of a BoF partnership.