Dive Brief:
- Fashion brands should view the European Union’s forthcoming digital product passport requirement as a “strategic investment” because DPPs have the potential to double the lifetime value of products, according to a June report by Bain & Company and eBay.
- DPPs could unlock “a massive secondhand market” by enabling brands to track ownership and authenticity post-sale, per the report. In addition, report authors said, DPPs could reduce counterfeiting, boost the resale value of products and track resale trends.
- The worldwide secondhand apparel market was worth $230 billion in 2024, according to the ThredUp Resale Report, which Bain cited in its study. The resale segment is growing three times faster than the overall global apparel market, Bain added.
Dive Insight:
DPPs are essential to Europe’s Ecodesign for Sustainable Products Regulation, which aims to help the EU meet its environmental, circularity and climate goals. DPPs will become mandatory for textiles in 2027.
Once they’re fully implemented, these standardized digital records are intended to include detailed information about a product, including material compositions, components, origin, environmental footprint and lifecycle.
However, while DPPs provide a wide range of new business opportunities, about 90% of brands Bain interviewed for this report said they view DPPs as a compliance burden rather than a growth opportunity.
That thinking is short-sighted, according to the report, because it reflects today’s market, whereby brands realize a product’s value at the point of sale.
“DPPs could change this dynamic by tracking a product’s entire journey — from first sale through disposal — so brands can see who owns it, how it’s used, when it’s resold, and what services it requires along the way,” according to the report.
In the future, product lifetime value — the total value of a product over its lifetime — could become as important as customer lifetime value for many brands, report authors said.
“DPPs are more than just checking a compliance box,” Aaron Cheris, partner in Bain & Company’s retail and customer strategy and marketing practices, said in a news release. “They are a foundational shift in how value is created, captured, and sustained over a product’s lifetime.”
The report noted that as the secondhand market expands, consumers stand to capture up to 65% of the new value created over a product’s lifetime as a result of DPP use.
Armani, Louis Vuitton, Diesel and other brands are already using DPPs and similar technologies to authenticate products, make product information accessible to consumers and enhance brand experiences.
DPPs could further simplify the secondhand market by enabling “one-click resale from virtually anywhere — whether through a brand’s e-commerce platform or a resale service,” according to the report.
The report urges fashion brands to act quickly before their competition passes them by.
“The brands investing in DPP infrastructure today — engaging consumers and testing resale models — will be tomorrow’s leaders in sustainable, data-driven fashion,” Bain said in the press release. “Those that wait risk falling behind as the resale economy scales.”
