Digital Product Passports can generate millions in circular revenue for fashion brands

By Reeti Sethi , Yale Summer Intern at Circle Economy Consulting, Luba Glazunova , Communications Specialist at Circle Economy, and Philip Ching Shing Sin , consultant at Circle Economy Consulting.

Recent research indicates that eco-consciousness is on the rise, and consumers are increasingly considering sustainability when buying clothes. However, the global textile industry remains just 0.3 % circular, suggesting that brands are yet to satisfy the growing demand for eco-friendly clothing. 

In recent years, many fashion brands have invested in cleaner production methods, such as bio-based materials and non-toxic dyes. But despite these upstream efforts towards more sustainable and circular value chains, the post-consumer value chain remains largely overlooked. Up to 30% of garments are discarded without ever being worn, while the rest tend to have increasingly short lifespans. This not only harms the environment but also results in millions of euros in lost value for brands. A recent policy initiative by the European Union could help change that.

EU’s Digital Product Passport (DPP) regulation will require nearly all products sold in the EU to feature a Digital Product Passport (DPP). The initiative aims to increase transparency across product value chains by offering detailed information on each product’s origin, materials, environmental impact, and recommended disposal methods. 

Companies often view DPP as a mere compliance requirement pending clearer specifications. Instead, it can become a powerful engine for both commercial success and circularity, regardless of regulational requirements. When brands use DPP data wisely, they can broaden their product and service offerings, connect with customers through every stage of a product’s life, become more circular, and stay ahead of tightening regulations. 

Here’s how textile and fashion brands can capture the full potential of this mechanism.

Capturing after-sales opportunities

The EU textile after‑sales market encompasses resale, reuse, repair, repurposing, and recycling channels and business models. At the current growth rate, the value of resale alone is projected to climb from €15.9 billion today to approximately €26 billion by 2030. Today, this market is largely driven by pioneers and start-ups like Patagonia and Nobody’s Child, but the DPP regulation has the potential to bring these circular models into the mainstream.

Digital Product Passports could act as a next‑generation Enterprise Resource Planning framework (ERP). Much like today’s ERPs that coordinate production and logistics for real‑time optimisation, DPPs aim to extend that view into what happens after a product is sold. With timely, product‑level data, brands can open fresh revenue channels and increase brand value while driving circular strategies such as peer-to-peer resale, subscription services, or trade-in programs.

One example of the revenue streams enabled by DPPs is tapping into peer-to-peer resale, which allows users to buy and sell pre-owned clothing. By providing transparent information on a garment’s repair history, replacement parts, and authenticity, DPPs could boost customer confidence, adding to their willingness to choose pre-owned clothing. 

Although peer-to-peer resale doesn’t mean direct revenue for brands, they can monetise this channel by offering repair services and replacement parts through peer-to-peer platforms. These services could not only enhance customer trust but also strengthen brand value, increasing consumers’ willingness to pay a premium for both pre-owned and new clothing from the brand.

Brands can also use DPP data to design smart subscription services for active wear kits, for instance, by providing the optimal model and size of new wicking panels, elastic bands, and deodorising treatments to maintain gear performance and extend the lifespan. In addition, customers can get tailored garment-care support: how-to videos, maintenance reminders, and best practices for washing and storing. 

Furthermore, DPPs can support trade-in programs by proving authenticity and fast-track checks for trade-in eligibility. By allowing customers to return used goods in exchange for rewards, brands can strengthen customer loyalty and encourage shoppers to come back for more—in addition to reselling returned items or recovering materials from them. Even without tangible rewards, the act of participating in a sustainable initiative can feel inherently satisfying, building a positive, eco-conscious image of a brand.

How it’s done: examples of pioneering initiatives

A growing number of brands are starting to explore the potential of Digital Product Passports. These early initiatives prove the business case for DPPs and pave the way for more commercial applications in the future. 

Repair and Resale

Patagonia and H&M are among the early adopters of resale and repair platforms that are enhancing product longevity through the use of digital records. Patagonia's Worn Wear program allows users to trade in, purchase, and repair worn gear, offering mail‑in and in‑store certified repair services alongside a curated resale marketplace. As a result, worn wear now generates about 1% of Patagonia’s revenue, proving that extending product life can contribute to revenue generation.

The current offerings of the Worn Wear program already demonstrate the potential for DPPs to reduce costs by expediting inspection and product authentication. Although today’s operation still involves manual checks, a mature DPP system can automate these processes via prefilling product data and applying eligibility rules, further reducing the operational cost. H&M Resell similarly embeds QR‑code-based DPPs to track quality ratings, wash cycles, and ownership history. 

These initiatives illustrate that by automating diagnostics and authentication, DPPs drive down inspection costs, accelerate resale processes, and curb fraud. Brands and repairers gain access to detailed information on each part of an apparel item, common breakdown patterns and full parts lists (Bill Of Materials, BOMs), enabling more precise repair certification and proactive spare‑part stocking. 

Recycle

Instead of saying goodbye to materials locked in their products after they’re sold, brands can recover them and use them again in new garments. This can be achieved by partnering with recyclers and providing them with material-specific data on the products to ensure precise sorting. Despite perceived complexity, such partnerships are already happening. For example, J Crew works with SuperCircle to recover materials from swimwear through fibre-to-fibre recycling. The process utilises DPP-like technologies to sort garments and collect materials and product data. 

By accessing DPP data in advance, recyclers can forecast incoming volumes and fibre compositions, which allows them to optimise processing lines for maximum efficiency. Scaling these brand–recycler partnerships, powered by reliable data, could help achieve a profit pool of €1.5–2.2 billion for the textile recycling industry in Europe by 2030.

Refurbish and Repurpose

Product returns are a significant and costly issue for brands, especially in e-commerce. It's estimated that returns can cost businesses up to 66% of the original purchase price to process. DPPs can reduce these costs and generate additional revenue through refurbishment and repurposing. 

Smaller brands like Nobody’s Child and platforms like Zalando are piloting QR-linked product IDs containing repair and inspection information. This could help speed up the reclassification of goods to be returned to shops, sold in outlets or refurbished. 

DPP data on stitching patterns, fibre types, and wear history is also useful for small-scale upcycling brands such as Raeburn and other circular designers. Although niche, small upcycling labels and micro-brands can pull in low- to mid-six-figure annual revenue. These revenues help stabilise their overall business, especially when paired with co-branding opportunities or limited-edition drops.

What’s blocking after-sales

Despite the clear benefits of implementing Digital Product Passports, brands still face substantial hurdles in getting there. One of them is regulatory uncertainty. EU‑wide standards remain unsettled, and implementation deadlines are hazy, hindering interoperability among different DPP solutions. 

Moreover, current systems lack standardised digital repair schemes and frequently omit crucial details like spare parts lists. In the absence of a common framework between brands and their repair partners, repair data remains scattered across the value chain, which increases errors, turnaround times, and operating expenses. This fragmentation forces repairers into manual inspection and guesswork: each item must be visually assessed, parts identified from paper lists, and repair costs estimated. There's also uncertainty about who controls or updates the data.

Implementing DPPs, one step at a time

Fashion brands can overcome these barriers by adapting in stages: piloting with a few product lines, mapping the minimum data they can reliably capture, and choosing systems that export and transform data as standards mature. 

In particular, brands can start by mapping their after-sales partners, local repairers, resale platforms, and recyclers and giving each of them secure access to the data they need. Next, they can agree on a shared product-ID format and a system that determines who updates information like durability, repair, and recycling details. Such a system would document every assumption, name a single owner for each data field, and set a quarterly review so pilots evolve instead of stalling. With clear roles, open channels, and a lightweight shared dashboard, today’s small trials can scale smoothly when regulations land and demand spikes. 

Some brands hesitate to invest in post-consumer systems because they seem too complicated. But the combined business case from a circular, commercial and environmental perspective is, in fact, clear, and future regulations will only strengthen it. Early adopters can benefit from low‑cost, first‑mover partnerships and gain more time to phase investments and spread costs before compliance deadlines hit. Just as important, starting now yields better analytics: early data sets reveal failure modes and improve forecasting, among other benefits. 

For decision‑makers, the message is simple: don’t wait! Start small, start now, and lead the race instead of trailing behind. 

Treat Digital Product Passports not as a compliance task but as a tool to capture the after-sales market. Use the data to design repair-ready garments, power branded resale hubs, and deliver QR-based care upgrades that keep customers coming back. Pilot now, lock in first-mover deals with repairers, resale platforms, and recyclers, and shape the regulatory standards instead of chasing them. Pull the conversation out of the boardroom and collaborate with your after-sales partner while using DPP insights creatively and wisely to turn them into steady, recurring revenue. 

Ready to get started? Our team has the skills, experience and mindset to design and implement impactful circular economy strategies with and for you. Let us guide you on your circular journey!

Reach out to us via our contact form or message Philip Ching Shing Sin at philip@circle-economy.consulting.