The catalysts for DPP and its subsequent outcome.
The dawn of the digital product passport (DPP) era ushered in new ways for brands to build, connect, and interact with their audience. For example in digital product bundling and 1-to-1 interaction.?
This opens up new ways to use DPP to create new business value. Ranging from enabling a marketplace for brand partnerships, branded or decentralized second-hand markets, boosting the rental market, new ways of doing subscriptions, new channels for product discovery and sales, eCommerce, and others.
These ideas ride on three major trends - (1) the byproducts of DPP, (2) maturing decentralized technologies, and (3) new distribution channels.?
Let us unpack each of these trends.
(1) The Byproduct of DPP: Digital product identities
Currently, DPP EU regulation affects products from 7 sectors and is required for all products marketed in the European Union regardless of their origin. The Fashion industry is one of the impacted sectors.
DPP serves to “Drive consumers to make better purchase decisions, reward companies with a lower carbon footprint product, and nudge companies toward circularity” where a central DPP registry will be created, maintained, made available, and verifiable.?
The goals of DPP are: (1) enhancing sustainable production; (2) extending product lifetimes, optimizing product use, and providing new business opportunities to economic actors through circular value retention and extraction; (3) supporting consumers in making sustainable choices; (4) enabling the transition to the circular economy by boosting materials and energy efficiency; and (5) supporting authorities to verify compliance. (European Commission).
The byproduct of the DPP implementation meant that these physical products would have a digital product identities equivalent that is sometimes called digital twins. Each product would have a unique identifier or handle, and when combined with buyer information forms a unique record. Creating opportunities for one-to-one communication between brands and their audiences.?
Cool facts
A Digital Product Passport (DPP) is a structured collection of product-related data with a set scope, agreed data management, and access rights conveyed through a unique identifier that is accessible electronically. The intended scope of the DPP is to display information related to sustainability, circularity, and value retention for reuse, remanufacturing, and recycling.?
DPP is part of the European Union’s Ecodesign for Sustainable Products Regulation (ESPR) that should be enforceable in the next 2 to 3 years, which itself is a cornerstone for the Circular Economy Action Plan (CEAP) to improve the environmental sustainability, circularity, and performance of products placed on the EU market to fight Climate change.??
The idea of digital twin technology was first voiced in 1991, with the publication of Mirror Worlds, by David Gelernter. However, Dr. Michael Grieves at the University of Michigan is credited with first applying the concept of digital twins to manufacturing in 2002 and formally announcing the digital twin software concept. Eventually, NASA’s John Vickers introduced a new term—“digital twin”—in 2010.
However, the idea of using a digital twin as a means of studying a physical object can be witnessed much earlier. ? NASA pioneered the use of digital twin technology during its space exploration missions of the 1960s when each voyaging spacecraft was exactly replicated in an earthbound version that was used for study and simulation purposes by NASA personnel serving on flight crews.
(2) Maturing decentralized Technologies (Web 3.0)
Amidst the hype and disillusionment of the nonfungible tokens (NFT) or the rise and fall of bitcoin, the rush to Initial Coin Offering (ICO), the creation of Decentralised Autonomous organizations (DAO), cryptocurrency exchange scandals, and many other web 3.0 debacles had many users confused, burnt and putoff.
However, the silver lining amongst these growing pains is that Web 3.0 communities, technologies, and ecosystems are maturing quickly. With that, the opportunities to apply Web 3.0 technologies to solve Web 2.0 real-world challenges. In this case, smart contracts govern partnerships or commercial agreements that enable new business models.
Web 3.0 protocol also enables data interoperability creating an interconnected marketplace or data ecosystem, the use of decentralized digital identities, or data wallets enables data storage and eventually ownership. These functionalities are implementable and used to solve real business use cases.
(3) New distribution channels, users, and interoperability
Since the founding of the Internet, it has grown to become centralized and filled with closed-walled gardens. However, the trend toward decentralization is on the march.
While the established marketplaces or platforms are working to maintain their relevance, new decentralized platforms are gaining traction. This ranges from Lenz Protocol for open social media to Mastodon and many others. Similarly, the gaming sector has started to make their player's digital assets becoming portable across different game platforms, and also metaverses.
The mot-orde is user-centric, user control, and data ownership. These trends lead to new consumer expectations and behaviors. Such signals combined with the decentralization push open up the need for a data interoperability layer for users to connect with different decentralized platforms or networks. This opens up new distribution channels and connections with new audiences.
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At STRGL/Tree? we are building the tools and solutions for brands to pilot new business values enabled by digital product identity even if the emission data gathering is not ready yet.? We have figured out a way to onboard you now while building for future compliance - Talk to us and learn how we do this.
Data Ecosystem Builder | Business Model Innovation
2 个月Part 2: https://www.dhirubhai.net/pulse/how-can-digital-product-identity-boost-resale-market-your-denny-wong-awpoe/ and part 3: https://www.dhirubhai.net/pulse/how-can-digital-product-identity-enabled-marketplace-brand-denny-wong-yrake/