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Introduction

In December 2021, the European Union announced plans to use digital product passports to boost the circular economy and to gain a better view on the full lifecycle of various products, including textiles. The overall goal would be to prevent these items from ending up in landfills and to keep them in circulation, either as broken down raw materials to be reused or to be repurposed. Nowadays, it is expected that products should last longer, be repairable, and be recyclable. The major problem is that the information revolving around product components and recyclability is easily lost, but the EU believes that these digital product IDs can be the change that industries need to better promote circularity.

Digital product passports: what is it and what for?

Digital product passports (DPPs) provide a way to digitally capture key information about an item and create a centralised bank where this information can be stored. Basically, it is a virtual tag that captures all information surrounding the product to bring transparency about materials used and overall impact to customers and manufacturers. According to Business of Fashion’s The State of Fashion 2022 report, product passports can be used to boost authentication, transparency, and sustainability by acting as a method to store and share information easily so that either customers or businesses interacting with the product can understand how it was made and what it is made of. According to the report, this technology should not be overlooked because approximately 2 out of 5 fashion executives plan to adopt product passports in 2022 or have already done so.

Communication stemming from these product passports will need to be two fold: addressing customer-facing needs and informing recycling or repair entities with technical information about the item's components or how to extend its life. Digital product passports tackle a few key issues around product information:

• Increased transparency: easily accessible product material information will facilitate the proper recycling and reparation of items.
• Improved life cycle sustainability: availability of detailed supply chain information from material grade, carbon footprint, repair instructions and components.
• Centralised bank of information: provides all necessary information needed by stakeholders such as governments, manufacturers, customers, and for those involved with the second-life of the product.

How can product passports be helpful to retailers?

As seen with NFTs and RFID, technology that enables brands to add a unique identity to each product is increasing in value and importance. These identification technologies are unlocking a lot of potential business cases that retail players find worth investing in. Interestingly, retailers that have already invested in RFID (radio-frequency identification), blockchain technology like NFTs (Non-fungible tokens), QR codes, and NFC (near-field communication can extend their use with product passports. Already this technology has allowed businesses to get a handle on counterfeiting as well as create better transparency across the supply chain, which addressed two major pain points for retailers.

Product passports can also extend the relationship between retailers and their products. Retailers are at a time where they are saying goodbye to the short-lived relationship between brands and products where brands and customers part ways completely following a sale. Customer-brand relationships have advanced, and harnessing the power of product passports gives brands the ability to continuously identify and monetize apparel products through circular business models such as rental, repair, resale, and recycle. This extension of their product’s life not only increases their potential for margins, but also unlocks access to new types of customers, such as Gen Z, who value affordable and sustainable products.

Examples of notable players powering product passports

A major player that is helping power connected products across fashion, apparel, and retail is Eon Group with their Internet of Things (IoT) platform which brings together partners to gather and share data. CircularIDs allow brands to have instant access to connected product data that is crucial for recycling and re-commerce. A mobile app allows users to scan products using RFID, NFC, or QR codes to access details ranging from the original sales price to the material content, with the ability to capture the resale channel as well. This database of information opens garments up to become more circular overall.

Eon Group’s service also increases the amount of communication surrounding garments between brands and consumers. Once a connected product is scanned, customers can access styling tips, instructions for resale, sustainability credentials, services for rental, among other things. The group has basically created a common language and formats for brands to communicate across the lifecycle of fashion products. Eon has already partnered with retail players such as the Yoox Net-A-Porter Group, H&M, and Pangaia

There have been additional efforts in connectivity for the retail industry. In 2020, Avery Dennison partnered with Certilogo, a digital authentication platform, to integrate the solution with Avery Dennison’s apparel labelling products so customers can verify product authenticity via their smartphones through a series of questions. Also, start-up Wiliot offers bluetooth-enabled microchips the size of a stamp that have the ability to sense, compute and communicate. These chips have the ability to report every condition and interaction they face to the cloud in real-time, and are even self-powered using radio frequency!

The limits: standardisation needs to be achieved, one way or another

Although technology is catching up, creating product passports for every item will not be an easy task, especially as supply chains are already an area needing great improvement. Even though information will be easier to capture at each stage of the process, there still seems to be some questions around the overall accuracy of this data. But as product passports can be connected through blockchain technology, there is an additional layer of trust and security that can be achieved. Unfortunately, even blockchain technologies are still in the process of defining governance and standardisation, putting this kind of technology at the cusp of its potential.

But, in order to have a standardised system, businesses and governments will need to come together to agree upon common standards to be able to scale such a project. New data standards, technological innovations, and supportive policies may be able to bring definition to the global waste crisis, putting fashion players under the microscope. With the continued progress and adoption of solutions such as what Eon Group is offering, the future of fully connected products is not so far out of sight.

What’s in it: circularity!

In the past decade, items that are being sold have not been created with the intent of being durable, repaired, or recycled. This is a major problem as consumers become more conscious about their buying habits, but unfortunately, circular products are not always easy to find. There have even been some activists that want to push the European Union to impose a mandatory European standard for durability and repairability among sold items to ensure that sustainable products are the norm. Although such strict regulation has not proven to be easily enforced, such implications could seriously impact the fashion industry if imposed. Therefore, eco-conscious retailers that want to be ahead of the game should understand how digitalising information through product passports could be a tool for implementing and scaling the circular economy.

The fashion industry is a key piece in the achievement of the circular economy, but without transparency, standardisation, and data sharing, overall progress will be stalled. Digital product passports that can be the holder of all information pertaining to the creation and vitality of goods could unlock a more sustainable economy for all.

Credits: IADS (Mary Jane Shea)