Digital Product Pass: Inspire and Retain Customers Long-term

Sustainability and Customer Retention: The Digital Product Pass in Focus

One Further Step Towards the Future

In April 2024, the European Parliament gave their go for the so-called “Ecodesign for Sustainable Products Regulation” (ESPR) with focus on the introduction of the Digital Product Pass, DPP in short. It comes with fundamental changes which open up an entirely new paradigm of how products are presented and managed. This innovative solution promises not only improvements in the circular economy and an increase in both transparency and sustainability, but also strengthens the relation between company and customer. However, what exactly does this concept mean for companies in detail and how can you make the most out of the benefits provided by the Digital Product Pass?

What is a Digital Product Pass?

At first glance, the concept of a “Digital Product Pass” appears to be something like the passport you use for travelling – a metaphor which is, in fact, more than apt.

This is because the DPP documents the “journey” of your product. It’s the central space collecting all information about the lifecycle of all your products: from the first industrial blueprints to the finishing touches – in the near future, your customers will have the possibility to browse the journey of their desired product at the click of a button. Instead of hunting for relevant information for hours, they can, for example, simply scan the CR code via smartphone app in a quick and easy manner.

Establishing the Conditions for the Digital Product Pass

Even though the specific requirements for the content of product passes are still in development as far as individual industry sectors are concerned, companies can already act as early as today. In the process, however, you’re to tackle the following challenges:

1. Data Integration and Management: In the future, retailers must gather and integrate a comprehensive set of data about their products. This doesn’t only include fundamental product information such as dimensions and technical properties but also details such as materials, manufacturing methods, environmental pollution rate, recycling options, and much more. Here, high data quality, consistency, and validity are decisive when it comes to fulfilling all these requirements.
2. Compliance: Companies now face the challenge to take a wide range of new regulations into consideration – and implement them accordingly. This includes, for example, the REACH regulation, the RohS directive, CE marking, different ISO norms, data protection regulations (GDPR), as well as strict IT security guidelines.
3. Investments and Resources: A successful implementation of the Digital Product Pass requires investments in technologies and professional training, perhaps even additional personnel.
4. Change Management: To make optimal use of the Digital Product Pass, you must accelerate your data processes. At the same time, it’s imperative to adjust your corporate structure in order to promote the internal acceptance rate and use of the DPP. This entails that employees are open for new technologies and ready to adjust their working style accordingly.
5. Technologies and Infrastructure: Companies need state-of-the-art systems and applications which can handle the processes revolving around data processing and organizing following the most recent methods and best practices – on top of that, they should also be easy to integrate into your existing system environment and structures.

Benefits of the Digital Product Pass

The Digital Product Pass may only be an EU regulation as of now, however it also offers several advantages for companies:

1. Increased Customer Satisfaction and Retention: In the times of ever-increasing customer expectations, DPP enables companies to inform customers about their products in a holistic manner. It offers detailed insights into the origin, composition, and production processes of all your products. This transparency strengthens the trust and increases the satisfaction rate of customers significantly.
2. Boosting Sustainability and Efficiency: With DPP, companies have the possibility to design their processes in a more efficient and sustainable manner. The high transparency of data allows you to discover errors quickly and, consequently, lower costs, improve production chains, and use resources more effectively. This, in turn, attracts new customers and boosts the trust received by existing customers drastically, since sustainability has advanced to become in increasingly more important sales argument to consumers. In a survey conducted by IBM in the year of 2022, 51 percent of all interviewed participants have stated that sustainability is even more important to them than it was 12 month before.
3. Transparency as a Competitive Edge: By providing transparent and detailed product information, companies can be streets ahead of the competition. When customers know exactly what they’re paying for and when the product matches their expectations, they gain a sense of security and are more likely to remain loyal to your brand and opt for products made by the same company in the future.
4. Environmental Protection and Trust: By conforming to the DPP, you don’t only conform with legal environmental protection regulations but you also demonstrate to your customers that your company proactively contributes to a green environment. Ecosensitive companies can strengthen their brand and win the trust of green-minded customers.
5. Understanding Customers Better: By analyzing the consumer behavior and expectations, companies gain deeper insights into the customers’ wishes. Equipped with this, more strategic adjustments can be made to products, information, and services.
6. Collaboration in the Supply Chain: In the future, companies will collaborate more tightly with suppliers across the entire supply chain. This opens up new changes for well-synced partners and efficient collaboration.

The Role of a PIM System for the Digital Product Pass

The pros of a Digital Product Pass demonstrate that well-organized product data is the core ingredient for fulfilling all requirements and securing the decisive competitive edge. In order to provide, maintain, and optimize the entire spectrum of the required data in a sustainable manner, it’s best practice to make use of an innovative software solution. PIM systems offer just the right functions to this end, allowing you to enrich data objects with DPP-conform information such as material regulations, recycling options, as well as data governance information, on top of environment standards. Not least, all this also contributes to improving transparency and sustainability.

1. Data Centralization and Consolidation: One of the greatest challenges is the collection and integration of all relevant product data from various internal and external sources. PIM systems offer a central platform on which all data can be consolidated and maintained. This secures both data quality and up-to-dateness.
2. Improving Efficiency through Automation: Managing large quantities of data manually is time-consuming and prone to errors. PIM systems enable the automation of processes through which you can design workflows more efficiently. This reduces the manual effort required for data management and improves the overall allocation of resources.
3. Controlling the Data Quality: With functions revolving around the validation and cleaning of data, both the correctness and exactness of product information can be guaranteed.
4. Conforming to Norms and Compliance: A PIM system offers an overview of all relevant norms and makes sure that the necessary information is provided pursuant to legal requirements.
5. Smooth Data Exchange: Through the smooth integration of a PIM system into the existing IT system landscape, all connected systems gain direct access to up-to-date information around the clock. This allows for an efficient collaboration.

The data transmission between a PIM system and the Digital Product Pass depends on your preferred method of implementing product passes. What matters the most are the processes: should your product pass include live data or be updated by data validation workflows? You can transmit data either in a scheduled manner or directly upon update. A PIM solution can flexibly adapt to your processes in order to supply the Digital Product Pass with up-to-date and relevant information.

Chances Provided by the DPP

The implementation of the Digital Product Pass constitutes a crucial step towards an environment-friendly and transparent circular economy as well as long-term customer retention. Companies should seize the possibilities provided and already start preparing for this novelty in order to exhaust the full potential of DPP. The introduction of a PIM system forms a valuable foundation which can facilitate the transition to the Digital Product Pass and support you in living up to your customer’s expectations when it comes to the ever-increasing data quality standards.