From Compliance to Growth Opportunity

Digital product passports (DPPs) are more than just a compliance requirement for the fashion industry. According to a recent report by Bain & Company and eBay, these standardized digital records could unlock a massive secondhand market and allow brands to offer more comprehensive aftercare services, such as repairs. By tracking a product’s entire journey, from first sale through disposal, DPPs can help brands see who owns it, how it’s used, when it’s resold, and what services it requires along the way.

While 90% of brands interviewed for the report view DPPs as a compliance burden, the report’s authors argue that this thinking is short-sighted. In the future, product lifetime value – the total value of a product over its lifetime – could become as important as customer lifetime value for many brands. By capturing and sustaining value over a product’s lifetime, DPPs can help brands create new business opportunities and stay ahead of the competition.

The report notes that as the secondhand market expands, consumers stand to capture up to 65% of the new value created over a product’s lifetime as a result of DPP use. Brands such as Armani, Louis Vuitton, and Diesel are already using DPPs and similar technologies to authenticate products, make product information accessible to consumers, and enhance brand experiences. By simplifying the resale process, DPPs can enable “one-click resale from virtually anywhere – whether through a brand’s e-commerce platform or a resale service,” according to the report.

One of the key benefits of DPPs is their ability to provide detailed information about a product’s material compositions, components, origin, environmental footprint, and lifecycle. This information can help consumers make more informed purchasing decisions and reduce waste by identifying products that can be repaired or recycled. Additionally, DPPs can help brands comply with regulatory requirements, such as the EU’s Ecodesign for Sustainable Products Regulation, which aims to help the EU meet its environmental, circularity, and climate goals.

The report urges fashion brands to act quickly, warning that those that wait risk falling behind as the resale economy scales. “The brands investing in DPP infrastructure today – engaging consumers and testing resale models – will be tomorrow’s leaders in sustainable, data-driven fashion,” the report concludes. By embracing digital product passports, fashion brands can unlock new growth opportunities and create a more sustainable future for the industry.

Key Benefits of Digital Product Passports:

Unlock a massive secondhand market and create new business opportunities

Enable comprehensive aftercare services, such as repairs

Provide detailed information about a product’s material compositions, components, origin, environmental footprint, and lifecycle

Simplify the resale process and enable “one-click resale”

Help brands comply with regulatory requirements and meet sustainability goals

Create a more sustainable future for the fashion industry

What’s Next?

As the fashion industry continues to evolve, digital product passports are likely to play a major role in shaping the future of fashion. Brands that invest in DPP infrastructure today will be well-positioned to capture new growth opportunities and stay ahead of the competition. Consumers, meanwhile, can expect to see more transparency and sustainability in the products they buy and use. With DPPs, the fashion industry can become more circular, more sustainable, and more connected than ever before.