Whether it’s a call to your helpdesk, the return of your product, or a simple transaction in a restaurant – customer experiences are a delicate and powerful force. Negative experiences can lead to bad reviews, which may lead to a loss of business, whilst consistently positive word of mouth can help sway prospective customers to trust your brand’s value proposition.
This is reflected in the numbers. According to PWC, 73% of customers say that experience with a brand is an important factor in purchase decision-making, and customer-centric organisations are 60% more profitable than those that aren’t (according to Hubspot).
Technology has played an important role in propelling the importance of the customer experience. For instance, the internet revolutionised customer relations, revealing several novel touch points for brands to engage with customers. And now, tech-savvy brands can further augment their customer experience with Digital Product Passports.
Digital Product Passports (DPPs): A Brief Breakdown
DPPs are a revolutionary new tool for sharing critical information about physical products with stakeholders throughout the supply chain. This data spans the entire product lifecycle – from manufacture to recycling and disposal – giving a holistic, comprehensive, and valuable overview.
The driving force behind the adoption of DPPs is the Ecodesign for Sustainable Products Regulation (ESPR). Entering into force on 18th July 2024, the regulation sets ecodesign requirements for products manufactured or sold within the EU, aiming to create a sustainability standard for physical products.
For consumers, this eventually means that all regulated physical products will meet strict sustainability and safety standards, helping to protect the health and welfare of consumers across the region.
The ESPR directly mandates that every product it regulates must come with a DPP, accessible by QR code or a similar data carrier, to simplify the accessibility of product information for customers.
Use Cases for DPPs in CX
Whilst reducing environmental impact and building the circular economy at an organisational level are the key focal points for DPPs, they have several natural applications that can help brands augment their customer experience.
Sustainability Data Sharing for Eco-Conscious Customers
Consumers are becoming more conscious of the sustainability of the products they buy and the socio-environmental practices of the companies they buy from, with 80% of consumers stating that they are very or somewhat concerned about the environmental impact of their purchases – an increase of 12% from the previous year.
To address these concerns, institutions like the EU are introducing sweeping legislation such as the ESPR to improve the sustainability and circularity of products on its market. Alongside the ESPR are the CSRD and CSDDD, sustainability reporting and due diligence directives that hold organisations accountable for reporting their environmental impact transparently and accurately.
DPPs provide a perfect platform for compliance with these directives. Under the ESPR, DPPs must contain accurate and detailed sustainability information on individual products, including raw material composition, carbon footprint, and manufacturing processes.
The accessibility measures required of DPPs (to be accessible by QR code or RFID technology, for example) mean that customers will have easy access to these data, allowing them to make informed decisions based on sustainability – not only about the products themselves but also about the seller company’s overall environmental impact and that of their entire value chain.
Product Authentication & Digital Proof-of-Ownership
For certain industries, delivering proof of the authenticity of products is an ongoing battle. This is especially true of the luxury goods industry, for example, most of which must comply with DPP regulations such as the ESPR for their physical goods.
DPPs collect all sorts of data throughout the product lifecycle, which must be accurate and secure. To achieve this goal, DPPs are likely to incorporate a layer of digital ledger technology such as blockchain – designed to be immutable (meaning the data can’t be altered after they’ve been uploaded to the network).
Blockchain-based DPPs can help generate increased revenue and market share for brands by streamlining the product authentication process, allowing customers to effectively authenticate their own purchases.
Blockchain technology’s inherent security attributes mean authentication can be done without compromising brand integrity, reducing the reliance on expensive human resources such as expert manual authenticators, who are in increasingly short supply.
Additionally, DPPs can contain a unique certificate of authenticity (potentially utilising web3 technologies such as Dynamic NFTs) that could act as the product’s unique identifier.
Unlike traditional NFTs, Dynamic NFTs are designed so that the metadata can be updated under specific conditions, like when a product changes hands, which creates a secure yet updateable certificate of ownership for the product.
Combined with the authentication ability that DPPs can afford consumers, this would allow them to sell their unwanted products on second-hand markets, complete with a tamper-proof and verifiable certificate of authenticity which can be securely passed on to the new owner.
New Engagement Channel Opportunities
Beyond providing crucial information to customers about the sustainability of products, DPPs offer several new avenues for customers to connect with their chosen brands, and vice versa – for example, through important product documentation.
DPPs can securely store and provide access to support documentation such as warranties, guarantees, and insurance. While these documents are often provided in paper form for many products already, they can easily be lost as soon as the product is unwrapped.
Having these documents readily available in a convenient, digital format means that should anything go wrong with the product, the customer can easily access the documentation to find out what provisions there are to rectify the issue.
This could include guidelines for the customer on how to repair the product themselves. In the event that the product is beyond repair, instructions could be included for disposal or recycling. Access to these instructions removes barriers for customers (and organisations) to ethical disposal or remanufacturing, helping to power the circular economy.
Another aspect of DPPs in customer engagement is that they provide a new novel touch point in the customer journey, especially applicable to after-sales customer loyalty. If a customer is accessing their product’s DPP, whether to find its warranty information or check its carbon footprint, they’re engaging with your brand.
This potentially creates usage data you can utilise to enhance your customer services. You can even proactively design the user interface of the DPP and utilise this direct communication channel to offer incentives to make further purchases like loyalty reward schemes, special offers, and discounts.
Conclusion
From providing accessible product sustainability information for eco-conscious consumers to giving brands a new channel to engage their customers, it’s clear that Digital Product Passports will significantly improve the customer experience.
Whilst many businesses will be looking towards the mandatory compliance deadlines set by the ESPR, forward-thinking organisations are already preparing their DPP strategy to gain a first-mover advantage and augment their existing customer offering.
Are you looking into DPPs for your organisation but unsure of where to begin with implementation planning? Read our guide on how to prepare for DPPs. If you’re ready to get started with your DPP journey and need an experienced technology partner, reach out to Protokol’s experts for a consultation.