This article was originally published in our PLM Report 2023 – the definitive instalment in fashion’s longest-running dedicated PLM market analysis. To read other opinion pieces, exclusive editorials, and detailed profiles and interviews with key vendors, download the full PLM Report 2023 completely free of charge and ungated.

Key Takeaways:

  • Consumers are increasingly looking for transparency and information around sustainability when making purchasing decisions. Brands have an opportunity to stand out by providing this information and building an emotional bond with consumers.
  • A product passport can help articulate the key value of a product and provide valuable information to consumers, such as product origin, composition, and options for prolonging the product’s lifetime.
  • Digital product passports and blockchain technology can play a major role in creating a more sustainable future by providing more visibility, trust, and knowledge of material flows within global supply chains.
  • Companies that focus on sustainability can reduce operating costs, improve operations, and increase customer satisfaction and loyalty, while also tapping into the growing demand for sustainable products.

If you are not telling your story, someone else will!

With increased focus on sustainability, different surveys indicate that consumers are finding it difficult to distinguish which products are truly sustainable. In many cases, the consumer seems to be willing to pay a higher price for more durable products. It all leads to consumers looking for ways to better understand the brand and its products to get better insights into things that matter. This could include information around product origin, composition, and what options are possible to prolong the lifetime of the product, such as repair or upcycle. By being able to share such data, brands have the opportunity to demonstrate leadership when it comes to sustainability and thereby develop a stronger emotional bond with consumers.

This article will explore how to engage and become more intimate with consumers by offering valuable information that can be shared through a product passport, that follows the product throughout its extended lifecycle.

Brand intimacy – creating a personal, emotional bond with consumers

Consumers are looking for more insights into the products they intend to buy:

  • What’s the origin?
  • Is production sustainable and are people being treated fairly?
  • How much impact has the product on the environment?
  • Is it made of recyclable material?

Consumers are now connecting their choice of products with emotion. What do they believe in, do they connect to the product and the story of the brand, does the brand support their beliefs, and most importantly, do they believe in the brand and what it stands for. That is a short definition of brand intimacy. Associating the brand’s story to their lifestyle is becoming a key factor. Currently, consumers are associating emotion, beliefs, and social responsibility with their buying patterns.

However, it is important not to confuse brand intimacy (how a customer can identify themselves closely with a product or brand) with brand loyalty.

Since emotion is usually baked into the experience of a consumer when they buy or wear a brand, it is interesting to see that most of the brand intimacy factors are not only famous apparel brands, but also upcoming brands that are focused on sustainability, social responsibility, and products that could be candidates for circular fashion.

Approximately 65% of fashion consumers care about the environment and would buy more sustainable clothing even if they are more expensive in comparison to the more commonly used material.

A great example of a business that has been growing at a tremendous pace is The Recycled Planet Co., a company that produces men’s and women’s fashion outerwear using only recycled, repurposed and sustainable components. Because of their company mission and vision, it is one of the fastest growing outerwear companies as their consumers have identified themselves not only with their products, but also the company’s mission to “save the earth”. In a recent conversation Infor had with its founder, Stephen Weisbuch, he said, “The Recycled Planet Company mission was to create fashion-driven outerwear using sustainable, repurposed, and recycled components. We selected a logo featuring the Polar Bear, as it is a species that will become extinct within 50 years if we don’t reverse the climate and environmental damage that the apparel industry has created. Consumers as well as major retailers have immediately embraced this brand as they identified themselves with the mission and purpose of the company, which is a commitment to protecting the planet and its resources.”

Consumers want to associate with brands that create value for them. In this example of brand intimacy, it focuses on a “feel good by joining the movement”, as it is more than just a product purchase. When companies have a clear story to tell, and at the same time are transparent about their products, they make it easier for consumers to make the right choices. Based on what we are seeing, this makes a positive effect and can lead to an individual being a strong advocate for the brand in social media.

Next to transparency, additional services such as resell or repair or rent have become more common. This kind of business model can lead to a new revenue stream. After all, the idea is that a product will live longer by being more durable, and the market is appreciative of brands moving in this direction. Another trend that is becoming more common is the concept of made to measure, personalised made for the consumer with the best fit.

Overall, there is value in creating an emotional, personal bond through the way you interact with consumers. And loyal consumers who have “bought into your story” will be strong advocates for your brand.

Product passport

What is the story around your product and your brand? Can it be deemed sustainable? What’s the value and how can the product be repurposed? Will consumers want to associate themselves with your brand?

The concept of a product passport will help articulate the key value your product brings to the market.

Digital Product Passport (DPP) is a blockchain-based end- to-end tool for traceability that allows companies to record and share information about the product to prove the product origin and how sustainable it is. Digital product passports and blockchain can play major roles in creating a more sustainable future. Together, they offer a solution to add more visibility, trust, and knowledge of material flows within global supply chains.

But how would they work together?

A digital product passport contains a large amount of information about products, allowing the entire lifecycle – from production to end-of-life disposal – to be tracked. Type of information collected could, for example, be origin of the material used (e.g. the cotton
farm, country), operations in manufacturing (relating to both fabric and finished goods), transportation, distribution to market channels, as well as activities like return, repair etc. In order to manage all of this data a unique product identification like RFID, QR code would be required.

Product serialization is a process of generating or assigning a unique identifier for each product. This process enables authentication and the ability to prevent counterfeiting a product, or brand. This process not only promotes buyer confidence, but also enables better inventory control. Another important factor that a digital product passport with serialization brings is the support of circularity in the fashion industry. When applied correctly, this approach ensures the product’s full value being realized, and the brand protection and authenticity factor it brings will allow for being re-used and re-sold.

At the end of use, a digital product passport is invaluable for the disposal of products to increase the efficiency of material recovery and the reduction of waste. One of the most notable initiatives at the heart of this transition is the new CircularIDTM Protocol, developed by leading fashion brands, retailers, and other stakeholders across the value chain. The CircularID Protocol will provide a common language for brands to communicate across the lifecycle of products. It establishes essential product and material data and introduces a consistent format for describing it.

Creating a digital product passport requires dedication, planning, analysis, and collaboration to ensure that all the relevant information is accurately captured and stored. The work does not end with its implementation. It will also need to be continuously monitored, studied, and audited to identify any issues that need to be addressed, such as outdated or inefficient processes. Implementing a digital product passport system is the first step on an innovation journey that will create new interconnected ways of working. The full benefits of digital product passports will only be realized once they are scaled and interoperable across multiple value chains. The data and insights contained within digital product passports can then be used to inform material selection challenges, product design briefs, and circular business models. In turn, these can facilitate customer interactions to promote sufficiency, product lifetime extension and take-back operations to facilitate end-of- life recovery.

In the last few years, more companies have been adopting the concept of serialized data and are requiring it as part of their product creation. Stakeholders throughout the supply chain process in the Apparel industry are installing the infrastructure to collect information on products flowing through the channel. This technology should not be ignored because it highlights the transparency of the fashion supply chain through improved traceability and authenticity of merchandise. It allows tracking of inventory and helps reduce cost of business in the fashion industry.

Imagine being able to be fully transparent of the product journey from beginning to end. All the different steps on the journey can be stored and visualized through the passport.

It is great if you can collect all this data across the value chain, but in addition to this, there needs to be a unique product identifier such as a QR code to store the data. Whenever you have all data in place it could then be shared with consumers simply by scanning a style tag via app on mobile phone to get access to the product story and journey.

However, technology solutions are not enough to get the full benefits, there’s also a need to change mindsets around how, what, when, and with whom to share data.

It’s all about data

How easy is it to manage this?

One thing is for sure: a lot of data is required – and the data needs to be of good quality. However, it is quite difficult to get hold of all the data required since production tier 1 to tier 4 is not often all under your own roof. So how to then get hold of this data?

Most likely, there will be so-called “information gaps” in the value chain. Luckily, there are tools on the market that can help fill that data gap based on artificial intelligence and other methods. Blockchain is an example of technology that can assist on this data gathering.

Digital product passport is one of the factors contributing to the foundation of the blockchain technology in the Apparel and Fashion industry. This is already being utilized in many industries and is beginning to gain momentum in the apparel and fashion industry as well to improve transparency and traceability, thus demonstrating the immense potential in accelerating the transition towards a circular economy.

Due to the decentralized nature of public blockchains, unauthorized access and manipulation of the data is impossible, making it highly trusted and reliable. The major challenge is that all transactions may be visible to everyone on the network and therefore can result in a lack of privacy. This can be a major concern for companies who want to keep certain information such as sensitive data relating to the composition of materials and products confidential and secure. Yet, this is sometimes the exact data that is needed to facilitate circular innovation and recovery strategies.

Methods for protecting data privacy have been developed and are already in use in system applications.

Digital product passports offer a transparent way of tracking and managing product information, allowing regulatory bodies, businesses, and consumers to identify and verify the quality and origin of products. Building digital product passports on public blockchain technology provide permanent records of ownership, origin, and usage, increasing trust and transparency in complicated supply chains.

Once you have the data, the unique identifier will help to store the data attached to the product. Modern technology will assist in implementing initiatives like this, allowing you to innovate and stay ahead of the game.

Call to action

Digital product passports along with transparency will almost certainly become the norm in the coming years, just as sustainability has become essential for long-term success. Companies that focus on sustainability can reduce operating costs, improve operations, and reduce inefficiencies. At the same time, they can increase customer satisfaction and loyalty, boost brand reputation, and tap into the growing demand for sustainable products.

By adapting the above technology, you can demonstrate leadership, and weave sustainability into the operational strategy to your business.

The starting point is to understand what type of reporting you will be required to provide, and what type of information consumers are looking for.

Then the next step is to start investigating your current situation:

  • Do you have data available for the type of reporting required?
  • If not, what is the plan to get hold of this data?
  • And once you have the data, how do you intend to share it with consumers and different stakeholders?
  • If you intend to embark on the product passport journey, can your current systems provide and store necessary data?

With modern technology there will always be a way through the cloud – it can help you to innovate, create that unique experience that will put you in the lead while making sure you are compliant to ongoing and upcoming market regulations.