Nfts
Consumers are demanding more from digital product passports: opportunities for luxury brands | NFT CULTURE | NFT News | Web3 culture
Digital product passports: an emerging expectation in luxury
In recent years, digital product passports (DPPs) have become an essential element in the fashion industry, particularly in the European Union, where they will soon be mandatory. These digital identifiers provide comprehensive information about a product’s origin, materials, environmental footprint, and more. A new survey by Authentique, part of the Ordre Group, reveals that luxury consumers not only welcome DPPs, but want even more detailed and interactive features. This trend presents a golden opportunity for brands to build customer loyalty and engagement.
What consumers expect from DPPs
The survey, conducted in April, asked 330 luxury consumers about their DPP preferences. The results show a clear demand for more than just basic sustainability data. Consumers want a richer connection with their purchases through additional features such as authentication, repair and warranty information, and resale capabilities.
Desired key attributes:
- Product information: Detailed descriptions and specifications.
- Certificates of authenticity: Ensure the authenticity of the product.
- Aftercare and Repair Instructions: Tips for product maintenance and repair.
- Warranty information: Clear details on warranty coverage.
- Resale Information: Facilitating second-hand sales with verified details.
Opportunities for brands
Brands that adopt DPPs can gain a competitive advantage by improving customer experience. Daniela Ott, strategic advisor at Authentique, emphasizes that brands should view DPPs not only as regulatory compliance, but also as a way to build stronger customer relationships.
Categories of interest:
- Strong demand: Handbags, watches and jewelry (interest above 80%).
- Moderate interest: Small leather goods, clothing and outerwear (interest of around 40%).
- Little interest: Shoes (29% interest).
The role of technology
Digital product passports are often linked to items via NFC chips, QR codes or fingerprints. This integration allows consumers to access a wealth of information through a simple scan, making product history and care instructions easily accessible.
Key brands:
- Chanel: The first brand should offer DPPs (46%).
- Others: Gucci, Hermès, Prada, Dior and Louis Vuitton (all above 30%).
Blockchain and DPP: a perfect match
The integration of blockchain technology with DPPs is inevitable and represents a perfect use case for this innovative technology. Blockchain offers a secure, transparent and immutable ledger, guaranteeing the authenticity and traceability of luxury products. This technology can build consumer confidence by providing verifiable information about the product’s history, from raw materials to final sale.
The decentralized nature of blockchain also ensures that data cannot be tampered with, providing an additional layer of security. By linking DPPs to blockchain, brands can provide consumers with a trusted source of information, making the entire lifecycle of a product transparent and accountable. This integration not only supports sustainability initiatives, but also reinforces the luxury brand’s commitment to quality and authenticity.
Improving the resale market
DPPs can revolutionize the resale market by providing accurate, authenticated and comprehensive information on used goods. Platforms like Eon already enable seamless integration with resale sites, which could lead to a more circular economy in which luxury items have extended life cycles.
Consumer interest:
- Current second-hand buyers: 25%
- Potential buyers with DPP: 56%
- Belief in DPPs facilitating resale: 65%
Early Adopters Get an Advantage
Brands that adopt DPPs early can set industry standards and build consumer trust. By piloting small projects and scaling them at scale based on feedback, they can refine their approach and maximize the benefits of DPPs.
Overcoming Challenges
Despite the obvious benefits, brands face challenges in implementing DPPs. Key obstacles include supply chain traceability, access to live data, and ensuring compliance across different markets. However, with strategic planning and the right technology partners, these obstacles can be overcome.
Notable implementations:
- Coach: Digital IDs in Coachtopia bags.
- Todd’s: DPP in a personalized Di bag.
- Breitling: Digital Guarantee Program.
- Balenciaga: NFC chips allowing access to music.
- Chief: Digital identifiers for access to ski lifts.
Conclusion
Digital product passports represent a transformative opportunity for luxury brands. By providing detailed and interactive product information, brands can improve customer loyalty and engagement, which ultimately drives sales and supports sustainability initiatives. The integration of blockchain technology further strengthens the authenticity and traceability of these products, making them an ideal solution for the luxury industry.
TL;DR
Luxury consumers are demanding more from digital product passports (DPPs), including detailed product information, authentication, repair and warranty instructions, and resale capabilities. This trend offers brands an opportunity to strengthen their customer relationships and gain a competitive advantage. The integration of blockchain technology with DPPs ensures authenticity and traceability, making it an ideal solution for the luxury market. Key challenges include traceability and supply chain compliance, but early adopters can set industry standards.