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Is blockchain the “token” to unlock the potential of digital passporting for products?
But what exactly is a Digital Product Passport (DPP)? Essentially, it is a digital record that accompanies a physical product, containing vital information about its lifecycle.
By 2030, every textile and fashion product sold within the EU will require a Digital Product Passport, and a recent report by technology intelligence firm ABI Research confirmed that over 62.5 billion DPPs will be issued for clothing worldwide by 2030. However, many fashion companies are already starting to introduce DPPs into their supply chains.
Camille Le Gal, co-founder of traceability solutions provider Fairly Made, explained how frustrating it was not to have the right tools and means to communicate with customers, even before the regulation, at the recent London Future Fabrics Expo trade show.
“That’s why we developed these QR codes: to attach images, comments and certifications along supply chains, so brands can feed them back into their system,” he said, noting how digital product passports can make complex supply chain information accessible to the average shopper.
Given the questions circulating about the environmental impact of DPP, the challenge of tracking products through multiple lifecycles, and the integration of recycled materials into traceability systems, innovations such as blockchain technology were suggested at the fair as a promising solution for DPP, particularly in the luxury sector.
Blockchain: The Traceability Token for the Digital Product Passport
The potential applications of a Digital Product Passport are vast. Benoit Aubas, innovation manager for Web3 and metaverse at the luxury brand LVMH Group introduced blockchain as a potential “backbone” for DPPs and envisioned it as more than just information repositories. “Our definition is enriching the product experience,” he said, pointing to possibilities like embedded warranties, insurance services, and streamlined gifting workflows as a recipe for value.
LVMH sees the DPP as a tool for authentication and improving the customer experience to combat the highly counterfeit luxury industry. “We wanted to understand what we could offer in terms of value in the DPP,” Aubas explained, describing the luxury brand’s embrace of blockchain technology as a way to record information.
Through this, LVMH has formed a blockchain foundation called “Aura Blockchain Consortium” with other luxury groups such as Prada, Cartier and Richemont to standardize approaches.
The intersection of Digital Product Passport with emerging technologies like blockchain presents both opportunities and challenges. While blockchain can improve traceability and data integrity, there are still concerns about its environmental impact. Aubas reassured that their chosen consensus mechanism is “pretty efficient, it’s like managing a database.”
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But he acknowledges that challenges remain in the user experience and the digital-physical connection. “How do you connect the digital piece to the physical product?” Aubas asked, emphasizing the need for solutions that can last as long as the luxury products themselves, potentially a century or more.
One of the most intriguing aspects of a Digital Product Passport is its potential to support circular economy initiatives. Aubas painted a future where DPP could facilitate product deconstruction and material recycling. “We don’t have the solution for that yet,” he admitted, “but we have material innovation and product information, so we should be able to deconstruct it at some point.”
The “opaque” challenges of the industry
Despite industry enthusiasm, consumer engagement is still in its infancy, and the road to widespread adoption of Digital Product Passport has left the industry facing very “opaque” challenges in recent years, Le Gal said.
Data collection and standardization emerge as significant challenges, especially in today’s production timelines. For fast fashion brands, this could mean gathering all the necessary information within two weeks, while established brands might have a three- to four-month window.
Le Gal also spoke about the complexity of collecting primary data from the various stages of production, not only manufacturing but also dyeing, spinning and raw material sourcing.
Fairly Made adopts what Le Gal described as “upstream traceability” to help brands that want to go a step further: they provide assistance with resale, repair and rental services to give the brand’s end customers access to additional services.
“We’ve done a lot of work and created a traceability pipeline to make it available on a brand-safe platform,” he said, emphasizing the need for scalable solutions that can handle thousands of product references.
He went on to say that, due to the impending legislation, it is crucial to “embrace and launch” on all brands, whether small, medium or large, as it is no longer about valuing a few items or a collection, but “providing this information on a large scale.”
The impact of DPP on consumer behavior is still evolving. While adoption rates vary, there is optimism about future engagement. “In five to 10 years, 80% of our customers will be digital natives and will accept that type of experience,” Aubas predicted.
Aubas went on to say that in a best-case scenario, around 40-50% of customers interact with DPPs, but this percentage drops to around 10% for products without a full range of associated services.
Le Gal offered a more optimistic view, citing “100,000 clicks or views on DPP on Fairly Made per week,” suggesting a growing consumer interest in product transparency. She shared that Fairly Made helps create “brands of love” by deepening relationships with existing brands to help them build customer loyalty.
European Union vs. France: A Tale of Two DPP Approaches
Leonore Garnier, head of sustainability at the Federation de la Haute Couture et de la Mode, said: “In 2022, the European Commission published a strategy for sustainable and circular textiles.” This strategy positioned the DPP as a crucial tool for monitoring and recording product information.
Garnier outlined the EU’s ambitious strategy for sustainable and circular textiles. At its heart is the Product Environmental Footprint (PEF), a standardized method for measuring the environmental impact of a garment through 16 indicators.
The PEF, which has a distinctive score composed of 16 indicators, has so far been the reference method in the development of the proposed EU Green Claims Directive and the tool is now being integrated into the DPP.
Meanwhile, France launched pilot projects to prove Green Claims 10 years ago and recently accelerated the process by developing a tool, EcoVadis, a system that goes beyond environmental factors to include non-physical aspects such as branding practices and reparability.
The French attach an “environmental cost” to textile products, which means that each product is priced according to its impact on the environment.
The unit of measurement is fictitious and takes into account various indicators, such as environmental impact, non-physical durability, ecotoxicity and microfibres, which are not yet included in the PEF unit score.
“We need a harmonized method,” Garnier said, noting the challenges of creating a system that works for both luxury brands and mass retailers.
What is clear is that the journey to a fully realized DPP is just the beginning. As Aubas said, “We are at the beginning of the journey. We have not yet found a solution for everything.”
“Is Blockchain the ‘Token’ to Unlock the Potential of Digital Product Passporting?” was originally created and published by Just stylea trademark of GlobalData.
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