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Digital Product Passports (DPP) will for sure bring change to your work in Marketing and Sales. At least if your products are intended for the European Union, as finished products or as inputs to products intended for the EU market. When that change will occur depends on your industry. The implementation will start by the end of 2027 for some industries but others will follow.
Transparency Is Key
The key change is the transparency that DPP's will bring regarding environmental impact of products throughout their entire life cycle. With a smartphone and the QR code, anybody will be able to access the stipulated data and compare it; with your competition and with your statements.
The language of the regulation aims primarily at providing the environmental data to consumers, but it will be accessible and reviewed also by retailers, people downstream the supply chain, authorities and the media, of course.
Greenwashing: Gone
So far, it has been fully feasible to cherry-pick the good-looking aspects of environmental impact of your products and avoid talking about other aspects that might be less positive.
Today, it takes the efforts of investigative journalists to uncover those less positive aspects.
With DPP;s it takes only a scan by anyone with a smartphone.
Get ready to tell your colleagues in design, production and elsewhere that some aspects of the environmental performance have to improve to make the products possible to sell. For example, the sales advantage of the cotton having been grown organically is made worthless if it turns out that child labour was used to pick or process it, right?
So, we're pretty sure that DPP's will create a pressure to improve the biggest environmental deficiencies. But will they position environmental performance at par with the traditional components of the competitive mix: price and performance?
Competing On Environmental Characteristics? Maybe.
That depends on consumers, really. A large portion of consumers claim to be environmentally conscious and making purchasing decisions based on care for our environment. A very recent study by Novus in Sweden showed that 70% of respondents were prepared to change their lifestyle for the climate.
But do consumers act on their intentions?
While second hand shopping has experienced a definite increase, at least in Sweden, market shares for organic and environment-friendly food have declined in recent years and still have very minor market shares.
May the answer lie in that buying second hand is cheaper than buying new, while organic food products most often have a higher price tag? Is it the conscience or the wallet speaking?
Could it be a fair guess that we'll reach a situation similar to the high jumpers' qualification jumping? That product's environmental performance means "making it over the bar", but once they're over it, it doesn't matter by how much? That environmental performance becomes more of a hygiene factor for being at all considered, rather than a decisive factor for the final choice? Might alternatives not meeting that hygiene level even be up for consideration by consumers? Or will they be filtered out already in the distribution chain?
In Sales: Be Prepared to Answer New Questions
For customer-facing staff in sales and customer service, you are likely to be required to answer an entirely new set of questions regarding environmental performance of your products. "What's behind this or that number?" Most probably, you will need to expand your product knowledge into completely new realms.
Not only from consumers, though. Retailers and downstream B2B customers will ask for information to be prepared to answer questions in their turn. Procurement professionals will compare DPP data before making purchases. They may very well be more finicky than consumers, to avoid having to handle difficult questions later or to minimise the risks of undesired publicity.
Might Big Buyers Lead The Way?
Is it likely or a far-fetched guess that environmental factors will play a greater role in purchasing by big companies and the public sector than by the majority of consumers? As the data on environmental impact have been collected and calculated to be available for consumers, isn't it likely for big buyers to start asking for them too? The attention by media for them is much greater than for us as individual consumers. Can they afford making environmental gaffes that could have been avoided though controlling data that are publicly available? We doubt that. Might DPP result in a bigger change B2B than in the consumer market?
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