Sign up to receive the Vogue Business newsletter for the latest insights on digital product passports, plus exclusive membership discounts. To become a Vogue Business Member and receive the Technology Edit newsletter, click here.
When it comes to digital product passports — the set of information that will be required on all fashion goods in the EU in the coming years — more is better for luxury consumers, who say they want to know about where their goods came from. This presents an opportunity for luxury brands to enhance loyalty and engagement through additional features such as authentication, repair and warranty information and resale capabilities.
That’s according to a study of luxury consumers conducted this April by digital identity tech provider Authentique, which is part of virtual showroom and metaverse tech company The Ordre Group in collaboration with customer and brand experience agency Me, the Customer and I. The study asked 330 luxury consumers to rate the attributes they are most interested in using and the types of products for which they would be most compelling.
“Brands have been internalising the DPP strategy and until now have not spoken to the end users. Consumers are not just looking for sustainability data; they want a richer, more informative connection with their purchases,” says Daniela Ott, strategic advisor of Authentique and the former president of the Aura Blockchain Consortium, which is a non-profit blockchain association for the luxury industry. “DPPs can provide that, creating new opportunities for brands to engage with their customers.”
Digital product passports are part of the EU’s Ecodesign for Sustainable Products Regulation, set to go into effect as early as 2026 and required for all products sold in the EU by 2030. They are often compared to a sort of standardised food label for clothes, offering information on the materials and geographic origin, the environmental footprint and chemical compliance, and how to care for the product. They are often linked to goods through an NFC chip or QR code or, as with Authentique s technology, can be linked using a digital fingerprint and an augmented reality overlay. They also can help consumers have better access to the type of information that would normally be found in a collection of receipts, certificates, labels and brand websites.
The five attributes consumers said they’d be most likely to use, each ranking at least 80 per cent or more, are product information, certificates of authenticity, aftercare and repair instructions, warranty information and resale information.
“While currently, brands are focusing on what they have to do to be compliant with the pending regulations, the real opportunity here is to build a more powerful connection with their customers,” Ott says. “I think there was a thought by the brands that consumers would hesitate about something new being introduced into the process of a purchase, but in fact, it is the opposite.”
The categories they most expect to have DPPs are handbags, watches and jewellery (all about 80 per cent or more), followed by small leather goods, clothing and outerwear (all roughly 40 per cent). The category with the least interest for DPPs is footwear, at 29 per cent.
The top brand from which consumers expect DPPs is Chanel, at almost half (46 per cent). The other top brands expected to offer DPPs include Gucci, Hermès, Prada, Dior and Louis Vuitton, all at least 30 per cent or more.
Ott says that the research suggests that consumers are eager to adopt this technology. More than half of luxury consumers (53 per cent) have already heard of DPPs, and one quarter are familiar with some of their potential functionalities. Brands still have an opportunity to educate consumers on the benefits and practical applications, says John Buckley, founder of Me, The Customer and I. “While awareness is surprisingly high, there is still a gap in understanding the full potential of DPPs.”
Unlocking secondhand
Proponents say that DPPs could become a key lever in luxury resale by helping consumers more easily list goods with accurate, authenticated and complete information and enabling brands to decrease production without sacrificing profit. The DPP can be designed to link both with external platforms to facilitate a brand’s own in-house service. “This provides a huge opportunity for the brands to become part of the conversation about resale and not entirely leave this to third-party platforms,” Ott says.
Already, Eon enables brands to link these digital IDs to resale sites such as The RealReal and Vestiaire Collective, making it easier for products to be instantly listed for resale. This could eventually encompass a mechanism for attributing royalties back to brands and maintaining a link to the new owner even after a product changes hands.
Currently, only about a quarter of consumers buy secondhand, but 56 per cent would be more inclined to do so if DPPs were available, according to the research. Additionally, 65 per cent said that they thought that DPPs would facilitate resale. DPPs potentially make it “easier and more attractive” for consumers to buy and sell pre-owned luxury items, Buckley says.
Earlier this month, Arianee, a Web3 fashion company that works with brands including Breitling and Moncler to create DPPs, issued a paper outlining the potential for DPPs to enable resale and add value to existing products. In terms of enabling repair, resale and remanufacturing, “the economic case is increasingly clear because it allows companies to create multiple revenues from one product,” wrote the researchers.
Getting a head start
It is still unclear what exactly the regulations will be and when they will be imposed, but more information is expected after the next session of the EU parliament, with implementation starting in the next two to three years, Ott says.
Buckley says that brands that are early adopters will gain a competitive edge and advises luxury brands to begin testing via small pilot projects to align DPP offerings with consumer expectations.
But even if the intention is there, there are still barriers. A recent report by traceability platform TrusTrace unveiled to coincide with this month’s Global Fashion Summit, found that key limitations are a lack of supply chain traceability, a lack of access to live data in the supply chain, and the potential for the data shared with consumers via QR codes to be at odds with disclosure requirements in markets outside the EU. One of the most significant logistical issues is ensuring that product information is readily available in terms of traceability of the supply chain, Ott says, and then brands need to decide which DPP provider to use, which data connector will be used (such as vision AI, QR code or NFC chip) and how they will communicate the benefits to consumers.
While the formal ruling on DPPs is yet to go into effect, companies have started adding digital IDs to products proactively, seeing them as an after-sale link between item and customer. Already, Coach has added digital IDs to its Coachtopia bags to log information on the product’s materials, environmental impacts and how it’s been crafted (working with Eon), while Tod’s has added DPPs to its Custom Di Bag, including information on authenticity, production, craftsmanship, materials’ origin and sustainability (working with the Aura Blockchain Consortium). Breitling, working with Arianee, has added digital IDs to connect a digital warranty programme. Balenciaga has added NFC chips and digital to provide access to music, and Boss even added digital IDs to ski jackets to provide ski lift access.
Earlier this month, the Aura Blockchain Consortium, whose members include luxury brands and companies including LVMH, OTB Group and Prada Group, announced that already 40 million luxury products had gained digital identities through the Aura Blockchain Consortium.
Ott adds that brands should start by considering how the required component might ultimately add value to the customer. She adds, “Dream big, pilot small.”
Comments, questions or feedback? Email us at feedback@voguebusiness.com.
