In recent years, a growing number of consumers have adopted a sustainable lifestyle. Yet, many of them do not trust large corporations to create sustainable products. Indeed, not every green promise communicated on packaging is truly green. According to a survey conducted by Kantar, “52% of people globally say they have seen, or heard, false or misleading information about sustainable actions taken by brands.” Distrust drives consumers to seek sustainability certifications and in-depth product information. But how can they be sure that this information is fully reliable and 100% true?
In the alarming reality of greenwashing, honesty becomes a powerful device. Transparent and traceable product information can give businesses competitive advantages by showcasing their sustainable, circular business practices.
The digital product passport (DPP) initiative by the European Commission plays an essential role in this movement and will affect many industries, including the retail sector. Ultimately, the digital product passport will apply to around 30 categories of products, and the implementation timeline spans from 2026 to 2030.
Brands such as Nobody's Child, KappAhl, and Ulé have already started testing piloting their digital product passports. There is no way back, and now is the best time to start preparing for the sustainable revolution. In this article, you will learn more about the benefits of a DPP and how to gear up for adopting it by developing your tech stack.
The definition of a digital product passport
A digital product passport is a detailed digital record that contains information about every stage of a product's lifecycle. It includes materials, manufacturing data, certifications, and instructions for end-of-life processes. The record should be accessible to all stakeholders throughout the supply chain, including manufacturers, suppliers, customers, and repair technicians by providing them with all the necessary product information.
The goal of a DPP is to enhance traceability, transparency, and sustainability by making repairs, reuse, remanufacturing, and recycling easier at the end of the product's lifecycle.
Types of data that go into a DPP and the technology behind it
To fulfill their purpose, digital product passports need to store granular data about a product, such as
- Product details: name, model, unique identifier, dimensions, weight, etc.
- Bill of materials: list of all components and materials used in product manufacturing.
- Manufacturing data: date of manufacture, location, production batch, quality check details.
- Supply chain data: details of suppliers, manufacturers, distribution channels.
- Performance data: intended usage, test/certification reports, energy ratings.
- Maintenance history: service records, repairs, and part replacements done.
- End-of-life instructions: reuse, refurbishing, take-back, recycling guidelines.
- Environmental impact metrics: carbon footprint, recyclability potential, etc.
The heart of the technology behind DPP is blockchain, which securely stores and manages digital product passport information. Real-time data is collected through Internet of Things (IoT) devices connected to cloud infrastructure. The most common data carriers are RFID tags and QR codes used to uniquely identify products and link them to their digital product passports.
5 benefits of digital product passports for online retailers
Improved transparency and compliance
As you already know, a digital product passport enables businesses to provide detailed information about their products, including materials, manufacturing processes, and certifications. Being transparent about your product lifecycle helps to build customer trust and ensures compliance with regulations and industry standards.
For instance, retailers selling organic products can use a DPP to showcase the origin of ingredients and certifications, which will strengthen their credibility with environmentally friendly shoppers.
Better customer experience
Eco-conscious customers are inquiring and likely to buy sustainable clothing from brands that offer details on materials sourcing and production methods. By providing access to comprehensive product information through a DPP, eCommerce businesses can empower customers to make informed purchasing decisions that support them in a sustainable lifestyle.
Customer loyalty
Consumers increasingly value authenticity, and it is crucial for Generation Z shoppers. Being transparent builds a better customer experience and, therefore, increases the chance of achieving the holy grail of all businesses: having customers who are eager to repeat purchases and recommend your products/services to others.
Enhanced supply chain traceability
With DPPs, businesses can monitor the journey of their products from production to delivery to ensure compliance with ethical standards and quality control. For example, they can trace the origin of raw materials, verify supplier credentials, and monitor transportation processes to secure the integrity of their supply chain.
Market differentiation
Let’s say you operate an eCommerce platform specializing in artisanal goods. You can use a DPP to highlight the unique and authentic story behind each product to show your commitment to transparency, sustainability, and quality. By highlighting the information available through a DPP, online retailers can set themselves apart in a competitive market landscape and appeal to customers who value ethical and trustworthy practices.
How to prepare your technology stack for digital product passports?
The first step in preparation is understanding the value of a digital product passport and educating your team. The source of knowledge I recommend is CIRPASS, an initiative founded by the European Commission to prepare the ground for the piloting and development of a standards-based DPP.
Another vital step is examining a launchpad to digital product passports. In other words, your technology assets: software tools, applications, architectures, and strategic partnerships. Here are some points worth considering to add to a cheat sheet.
1. Invest in data management systems
Digital retailers should enhance their technology stacks by investing in robust data management systems capable of efficiently capturing, storing, and analyzing product data. This includes implementing database solutions and analytics tools to manage and process the information needed for a DPP. Systems that can be particularly useful are:
- Product information management (PIM): to centralize, manage, and distribute product information management. The platform can be established as a single source of truth for product information in the organization.
- Digital asset management (DAM): to organize and store product images, videos, and other multimedia assets linked to the digital product passport.
- Inventory management: to track and manage product availability, stock levels, and logistical information associated with the digital product passport.
- Customer relationship management (CRM): to integrate customer data and feedback with digital product passports for enhanced personalization and customer engagement.
- Data analytics tools: to analyze and derive insights from digital product passport data to improve product performance and customer experiences.
2. Implement blockchain technology
To successfully adopt a DPP, businesses should consider integrating blockchain technology into their existing systems. Blockchain ensures secure and immutable data storage, which is critical for maintaining the integrity and transparency of the product information shared using the DPP. For example, in the European Green Passport for electronic equipment project, “each repair is registered and stamped in blockchain, guaranteeing the related information and eliminating the possibility of falsifying it in terms of both date and content.”
3. Integrate API and integration platforms
Digital retail companies can boost their tech capabilities by adding application programming interfaces (APIs) and integration platforms, and investing in API-first solutions. These tools help different systems sync more smoothly, making data sharing lightning-fast. APIs, for example, can link a digital product passport to an eCommerce platform.
4. Incorporate AI power
Businesses can leverage machine learning (ML) and artificial intelligence (AI) technologies to analyze and derive insights from the vast amount of data generated by the DPP. These technologies can significantly support spotting patterns by forecasting trends, tailoring customer experiences, and optimizing product lifecycle strategies. For instance, AI could analyze DPP data to recommend when to restock certain items to help stores manage inventory more sustainably.
5. Ensure scalability and flexibility
Retail businesses must design their tech stacks to be both scalable and flexible to allow them to handle increasing amounts of data and adapt to shifting business needs when adopting a digital product passport. Consider scalable infrastructure and a modular composable approach to adapt to evolving requirements and scale the DPP implementation effectively.
6. Select a technology partner
Adopting a digital product passport requires teamwork. To ensure successful adoption, research and select a technology partner or provider specializing in implementing DPP solutions or having experience in blockchain, data management, AI, APIs, or system integrations.
Final thoughts
Future-proofing your technology stack is essential, but preparing for a digital product passport isn’t just about technological adoption. It’s also about embracing and leading a shift toward greater ecological and social responsibility. How effectively can your business turn this compliance requirement into a compelling story of sustainability that resonates with the growing segment of environmentally conscious consumers? Start gearing up for digital product passport adoption today, and let consistent and traceable product information in multiple channels reflect your testimony to sustainability.
Published April 30, 2024
