However, building and managing this data infrastructure is being positioned by some as a daunting task for businesses in the EU and globally. It does not need to be.

The essentials: what makes a digital label

Digital labels unlock supply chain transparency and circularity while simplifying DPP compliance for consumer brands across sectors such as textiles. Other product groups for which the DPP will apply in the coming years include iron and steel, aluminum, furniture, tires, detergents, paints, lubricants, chemicals, energy-related products and electronics.

• Physical label: any digital label must have a physical component visible to its readers. Whether this is a label on a beverage bottle or a textile label attached to a garment, it all starts with a physical component.
• Unique digital identifier: each product is assigned a unique digital ID that links to its digital twins
• Data carrier: unique identifiers are embedded into data carriers such as QR codes, RFID tags and NFC tags, which enable the connection between the physical product and the digital twin. Data carriers offer a variety of readability options: from the one-to-one readability offered by QR codes to the one-to-many readability enabled by RFID, allowing up to 500 scans per second.
• Connected product cloud: information captured via data carriers is stored and visible within a cloud-based platform, such as Avery Dennison’s atma.io connected product cloud. Data stored on the cloud can be selectively shared and visualized by consumers, brands, and repairers and sorters, based on their access rights.

When companies look to implement DPP solutions, these elements are essential because they will ensure that digital labels effectively connect physical products to the digital world, creating a range of possibilities for businesses operating in Europe.

Digital product passports: ensuring more transparent and competitive supply chains in the EU

The DPP aligns perfectly with the EU’s renewed purpose to make policies that advance sustainability while preserving competitiveness. By enabling transparent product life cycles, digital identification solutions encourage:

• Informed consumer choices: consumers gain access to detailed information about the environmental impact of a product, empowering them to make responsible purchasing decisions. This also helps to better connect brands and consumers.
• Extended product life: digital twins facilitate easier repair and maintenance by providing readily available service information, encouraging consumers to keep products in use for longer.
• Efficient recycling and repurposing: detailed material composition data within the DPP allows for more efficient sorting and recycling processes, maximizing the potential for materials to be reused in new products.
• Responsible production: greater inventory visibility, powered by digital twins, allows brands to manufacture more efficiently and avoid overproduction, a big issue that the industry faces today. Research commissioned by Avery Dennison reveals that overproduction and waste are exacerbating the supply chain crisis, hitting businesses to the tune of 3.6% of their annual profits.^[1]

The commercial imperative: embracing transparency as a competitive edge

Harnessing the DPP and digital identification solutions benefits businesses in many ways. Here’s how: