Digital Product Passports: How Fashion Can Share the Product Journey
From spotlighting shared value to creating entirely new value propositions that transcend traditional channels, fashion brands have more stories to tell—and more ways to tell them—than ever. But every chapter of the brand and product journey will need to be backed up by data for audiences to buy in.
With increased focus on sustainability, consumers continue with the difficulty in distinguishing which products are truly sustainable. Consumers are willing to pay a higher price for more durable products, as there is interest to understand product origins and carbon footprints. By sharing such data, brands can demonstrate leadership within sustainability and develop a stronger emotional tie with consumers.
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Consumers are now connecting their choice of products with emotion, or brand intimacy, or how brands bond with consumers on an emotional level.
Brand intimacy is not brand loyalty.
Emotion is baked into the experience of a consumer when they buy or wear a brand. Brand intimacy factors are not only famous apparel companies, but also upcoming brands that are focused on sustainability, social responsibility, and products that embrace circular fashion.
Approximately 65 percent of fashion consumers care about the environment, according to Bain, and would buy more sustainable clothing even if they are more expensive.
For instance, The Recycled Planet Co., a company that produces men’s and women’s fashion outerwear using only recycled, repurposed and sustainable components, is one of the fastest-growing outerwear brands. The company uses consumer insights to drive growth and also prioritize sustainability.
Consumers want to associate with brands that create value for them. When companies have a clear story to tell, and embrace product transparency, they make it easier for consumers to make the right choices and build brand awareness.
Following transparency, services such as resell, repair or rent have been popularized and generated new revenue streams. The market is appreciative of brands focusing on product lifecycle and improved durability for long-term use.
Overall, there is value in creating an emotional, personal bond through consumer interactions – and loyal consumers who have “bought into your story” will be strong brand advocates.
What is a digital product passport
Digital Product Passport (DPP) is a blockchain-based end-to-end tool for traceability that allows companies to record and share information about the product, such as product origin and carbon footprint. DPPs and blockchain play major roles in creating a more sustainable future, both adding visibility, trust, and knowledge of material flows within global supply chains.
A DPP contains a large amount of information about products, allowing the entire lifecycle – from production to end-of-life disposal – to be tracked. The type of information collected can for example, be origin of the material used, operations in manufacturing, transportation, distribution to market channels, as well as activities like return, repair etc. A unique product identifier like a QR or RFID code is required to manage this process.
Product serialization is a process of generating a unique identifier for each product. This enables authentication and the ability to prevent counterfeiting a product, or brand. This promotes buyer confidence and enables better inventory control. Another important factor a DPP with serialization brings is the support of circularity in the fashion industry. When implemented correctly, this ensures the product’s full value being realized, while authenticity factor it brings allows for being re-used and re-sold.
At the end of use, a DPP is invaluable for the disposal of products to increase the efficiency of material recovery and the reduction of waste. One of the most notable initiatives at the heart of this transition is the new CircularIDTM Protocol, developed by leading fashion brands, retailers, and other stakeholders across the value chain. The CircularID Protocol will provide a common language for brands to communicate across product lifecycles.
Implementing a DPP system is the first step on an innovation journey that will create new interconnected ways of working. The full benefits of DPPs will only be realized once they are scaled and interoperable across multiple value chains. The data and insights contained within DPPs can be used to inform material selection challenges, product design briefs, and circular business models. In turn, these can facilitate customer interactions to promote sufficiency, product lifetime extension and take-back operations to facilitate end-of-life recovery.
However, technology solutions are not enough to get the full benefits, there’s also a need to change mindsets around how, what, when, and with whom to share data.
It’s all about data
High quality data is required to manage DPPs.
Most likely, there will be so-called “information gaps” in the value chain. Luckily, there are tools to help fill data gaps based on artificial intelligence and blockchain.
DPP is one of the factors contributing to the foundation of the blockchain technology in the fashion industry. Many industries already use DPP to improve transparency and traceability, demonstrating the immense potential in accelerating the transition towards a circular economy.
DPPs offer a transparent way of tracking and managing product information, allowing regulatory bodies, businesses, and consumers to identify and verify the quality and origin of products. Building DPPs on public blockchain technology provide permanent records of ownership, origin, and usage, increasing trust and transparency in complicated supply chains.
The unique identifier will help to store the data attached to the product. Modern technology will assist in implementing initiatives like this, allowing you to innovate and stay ahead of the game.
Call to action
DPPs are becoming the norm and will be mandatory in the coming years, just as sustainability has become essential for long-term success. Companies that focus on sustainability have reduced operating costs, improved operations, and reduced inefficiencies. At the same time, increasing customer satisfaction and loyalty, boost brand reputation, and tap into the growing demand for sustainable products.
It is important to understand what type of reporting you will be required to provide, and what type of information consumers are looking for. The next steps is to begin investigating your current situation and the data requirements for success.
Cloud technology can help to innovate unique experiences that improve competitiveness while adhering to current and future regulations.
Ana Friedlander is the North America director of fashion solution and strategy at Infor.
