Five reasons to move early with digital product passports

1. Get a competitive edge for being sustainable

If you’ve got a sustainable story to tell, then you have already done your homework. You probably have a good idea as to where your products are made, how they’re made and what’s in them. You already care about the people who make your products and the conditions they are working under. For you, it’s probably something you just did because it was the right thing to do. Now, you can actually win business because you’re doing the right thing for people and the planet. Harvard Business School did a comprehensive study monitoring 80,000 customer transactions for two different brands; a clothing company and a coffee roasting company as well as two retailers who sold their products. They found that consumers were 13.6% more likely to buy products from the clothing brand when confronted with transparent sustainability initiatives from the brand than those who weren’t. For the coffee company, they were 45.8% more likely to buy. Digital product passports feed into this very well. By providing transparent information packaged in an appealing way companies can get an edge for being the sustainable brands that they are.

2. Make bags of 'circular' money

The circular economy is coming. Re-use and resale is growing. The Ellen Macarthur foundation has calculated that circular business models (resale, rental, repairs, remaking) could be worth USD 700 billion by 2030, accounting for nearly a quarter of the global fashion market.

People want to buy secondhand so make it easy for them. Several of our existing DPP customers at Kolla are already thinking along those lines. The Swedish scout association has connected their Kolla DPPs to their ‘Revive Retail’ second-hand platform, making resale just a QR-code scan away and making selling secondhand easier than ever.

Others like OCEANR have a take-back programme and promote it on their digital product passports

3. Lead the way and generate brand loyalty

A recent KPMG readiness study interviewed over 70 organisations facing DPP in different sectors and the biggest potential advantage they saw was enhancing brand trust and loyalty. This aligns with an increasing amount of research and evidence that shows that the more you know about a product and a brand the more likely you are to buy from that brand again. Early movers in the DPP space can get their QR-codes and DPP platforms in order and start by using them to provide a lot of information available in a very easily accessible way. User manuals, safety guidelines, tips for best usage and inspiration can all be included in a DPP in an inspiring way. So, even if a brand doesn’t have all the information on its supply chain or environmental emissions, they can get the ball rolling today and give consumers the right information at the right time, increasing brand loyalty and the consumer experience. Kolla’s customer Tele2 has had this in place for several years.

4. Stay ahead of the moving goalposts

The EU’s regulations are going to become increasingly refined. The first DPP to go live will not be the final version. The latest report from the EU on their DPP methodology points clearly to the fact that DPP will become increasingly refined. The EU wants to start by getting brands on board and make it possible for most organisation to complete DPP’s for their products.

As time goes on, this will be refined further. It means that getting on board early puts you in a situation where you’re not chasing ever-changing regulations but rather able to stay on top of things and ensure compliance. In addition, building the data foundations now means you’re going to be ahead of your competitors when they’re forced to do so at a later stage..

5. Combat counterfeit

Several brands have already started with digital product passports to prevent their buyers from purchasing counterfeits. If every item has a digital product passport equipped with a unique identifier, then counterfeiting will be almost impossible. Every legitimate product will be traceable back to the original manufacturer. As consumers get used to scanning for digital product passports, products won’t be purchased if a DPP isn’t attached. Providing an accurate and thorough DPP means consumers get the information they want and peace of mind that they are purchasing the real thing. The OECD estimated the counterfeit industry to be worth some USD 509 billion back in 2016. That represents 3.3% of world trade. So, the figures are big and that lost income can now make its way back to the original brands, making digital product passports worthwhile on counterfeit prevention alone.