Digital Passport Drives Second Hand: Doubles Product Value in Its Life Cycle

The digital passport could double the lifecycle value of fashion products, with consumers benefiting the most, “cashing in” the equivalent of 65% of the profits.

This is the main finding of the new report that Bain & Company has created with eBay analyzing the effects that European legislation could have on the value of products, especially in resale. The digital product passport (DPP) is one of the obligations introduced by the Ecodesign regulation (Espr) that came into force last year, whose effects will be concretely deployed starting from 2027 and will allow consumers, companies and regulatory authorities to track and evaluate products throughout their life cycle. According to the study, the DPP will double the value of the product throughout its life cycle with the consumer collecting the most significant share (65%) of the earnings. The remaining part (35%) will be collected by brands thanks, for example, to maintenance and repair services.

"We did this study to try to understand how something that is born out of a compliance need actually has the possibility of creating value. The DPP, in particular, will be a driving force for the second-hand market", explains Matteo Capellini, partner at Bain&Company and one of the authors of the study.

According to Capellini, however, «brands have not yet understood the business opportunity and consumers will be the real “winners”». Many brands – about 90% of those interviewed by Bain – currently consider DPPs mainly as a regulatory burden and not as a strategic investment capable of generating constant revenues, promoting sustainability and strengthening relationships with consumers. «Companies are approaching the process of adopting this tool from an emergency perspective, in concert with their legal and sustainability teams. They are leaving out an important opportunity for value creation: when all clothing products have a digital passport, one can imagine that some of the barriers that still limit access to the second-hand market – such as information on materials or the certificate of authenticity – will automatically be torn down».

According to Capellini, "second hand could bring brands a series of new consumers, for example those who cannot afford full-price products, but also bring them closer to their decarbonisation objectives."