Beautifying the Future: Unleashing the Potential of Digital Product Passports in the Cosmetics Industry

Driving Marketing Innovation, Compliance, and Sustainability in the Cosmetics Industry

Authors: Carsten Stöcker (Spherity), Susanne Guth-Orlowski (Spherity), Ricky Thiermann (Spherity)

Abstract: The cosmetics industry is evolving rapidly, with a growing emphasis on transparency, sustainability, and customer engagement. Digital Product Passports (DPP) present a unique opportunity for brands to address these concerns while offering unparalleled new customer experiences and marketing innovations. This whitepaper explores the transformative potential of DPPs in the cosmetics industry, demonstrating their ability to enhance product authenticity, traceability, and customer-brand interaction. Through detailed case studies and user journeys, we will showcase how the DPP can help brands make data-driven decisions while providing customers with increased value and engagement. Spherity has worked on a similar concept for DPPs in the pharma industry. Therefore we reflected our experiences with DPPs for pharma products in this research document as well.

Photo by Laura Chouette on Unsplash

1. Introduction

The convergence of technology for compliance, sustainability, and customer engagement offers new opportunities for innovation and growth. This article describes how Digital Product Passports (DPPs) can help the cosmetics industry navigate this convergence and shape the future of cosmetics.

Overview of the cosmetics industry’s challenges

The cosmetics industry is a dynamic, fast-paced sector that is continually adapting to shifting consumer preferences, evolving market trends, and increasing regulatory requirements. Some of the most significant challenges facing the industry today include counterfeit products, a growing demand for sustainable and ethically sourced products, and an increasingly discerning and well-informed customer base.

Counterfeit cosmetics pose a significant threat to both consumer safety and brand reputation, as these products often contain harmful ingredients and fail to meet quality standards. Meanwhile, consumers are becoming more conscious of the environmental and social impact of their purchasing decisions, seeking transparency in supply chains and prioritizing brands that align with their values. Furthermore, the rise of digital channels and social media has amplified the need for brands to engage with customers in more meaningful and personalized ways.

The need for transparency and customer engagement

In response to these challenges, there is a growing need for transparency and customer engagement in the cosmetics industry. Transparency in supply chains and product provenance helps brands ensure the authenticity of their products, build consumer trust, and differentiate themselves in a competitive market. Additionally, fostering genuine connections and engagement with customers is essential for brands to cultivate loyalty, generate valuable insights, and drive long-term success.

2. Regulatory Challenges in the Cosmetics Industry

The cosmetics industry faces a multitude of regulatory challenges that vary across different regions and countries, impacting the way brands develop, manufacture, and market their products. These regulatory challenges often stem from concerns related to product safety, ingredient disclosure, and sustainable practices.

Product Safety and Testing

One of the primary regulatory challenges in the cosmetics industry is ensuring product safety and compliance with various testing requirements. In the European Union, for example, the Cosmetic Products Regulation (EC) №1223/2009 governs the safety of cosmetic products, requiring brands to conduct safety assessments and comply with restrictions on certain substances (European Commission, 2009). The United States has similar Cosmetics Labeling regulations under the Federal Food, Drug, and Cosmetic Act, enforced by the Food and Drug Administration (FDA).

Ingredient Disclosure and Transparency

Another challenge is the requirement to disclose ingredients used in cosmetic products accurately. Consumers and regulators alike demand transparency in product formulations, leading to more stringent labeling requirements. For instance, the EU Cosmetic Products Regulation mandates that all ingredients be listed on the product label using the International Nomenclature of Cosmetic Ingredients (INCI) system (European Commission, 2009). In the United States, the FDA also requires ingredients to be listed on product labels using their INCI names (FDA).

Sustainability and Ethical Practices

Sustainability and ethical practices are increasingly becoming a focus of regulation in the cosmetics industry. For example, in 2013, the European Union implemented a ban on animal testing for cosmetic products and ingredients, which has since influenced other countries to adopt similar measures (European Commission, 2013). Additionally, regulations surrounding packaging and waste reduction are emerging, such as the EU’s Single-Use Plastics Directive, which aims to reduce the impact of certain plastic products on the environment (European Parliament, 2018).

EU Ecodesign for Sustainable Products (ESPR) Regulation

The European Union, as part of its commitment to environmental sustainability and consumer protection, has recently introduced the Ecodesign for Sustainable Products (ESPR) Regulation. A key provision of this policy is the mandate for Digital Product Passports (DPPs) for cosmetic products. This measure aims to enhance product transparency, promote sustainable practices, and foster informed consumer choice. By requiring manufacturers to provide comprehensive and verifiable information about a product’s provenance, ingredients, and environmental impact, the ESPR regulation is leading the way in transforming the cosmetics industry towards a more sustainable and consumer-centric model (EU Commission 2022).

The requirement for Digital Product Passports (DPPs) in the cosmetic industry doesn’t just affect EU manufacturers. Non-EU cosmetic manufacturers intending to import their products into the European Union also need to adhere to these standards. By providing a DPP for their products, non-EU manufacturers can ensure their products meet the EU’s transparency and sustainability criteria. This is crucial to maintain market access and continue serving the vast and diverse consumer base within the European Union. Failure to comply with these new regulations could significantly impact the ability to import and sell their products within the EU market. Therefore, understanding and implementing DPPs is a strategic necessity for global cosmetic brands aiming to sustain and grow their presence in Europe.

These regulatory challenges highlight the need for cosmetics brands to ensure compliance and adapt to an ever-changing regulatory landscape. Implementing a Digital Product Passport (DPP) can provide a valuable tool for brands to manage these challenges by offering increased transparency, traceability, and documentation of their products’ compliance with various regulations.

Broadening the Scope: DPPs as Digital Twins for Enhanced Customer Interaction and Marketing Innovation

While the term “Digital Product Passport” (DPP) is used in the context of the Ecodesign for Sustainable Products (ESPR) Regulation to denote a comprehensive digital record of a product’s lifecycle, for the purposes of this whitepaper, we extend its definition beyond regulatory compliance.

We also view DPPs as digital twins of products, going beyond lifecycle and sustainability data to encompass a wide range of features that enable advanced customer interaction and marketing innovation:

• By leveraging DPPs, brands can provide consumers with comprehensive product information, enabling them to make more informed and conscious purchasing decisions. This could lead to increased customer trust and loyalty, ultimately driving repeat purchases and brand advocacy.
• The data collected through DPPs can provide brands with valuable insights into customer behavior and preferences, which can be used to inform product development, personalize marketing efforts, and optimize the overall customer experience.
• DPPs open up new avenues for marketing innovation. Brands can utilize the DPP as a platform for interactive marketing activities such as promotions, influencer collaborations, augmented reality experiences, and customer-generated content.
• Such initiatives can not only drive customer engagement but also create a unique and immersive brand experience, setting the brand apart in an increasingly crowded cosmetic marketplace.

The mandate for DPPs emerged from a regulatory necessity, that needs to be fulfilled in the EU starting in 2026. It shall be understood, that its strategic adoption can drive significant business value and marketing innovation already today, providing a competitive edge for forward-thinking cosmetic brands.

Hence, in this whitepaper, the term DPP encompasses both the regulatory and the broader, more innovative aspects of a product’s digital representation.

3. Examples of existing DPP solutions and realized benefits

Digital Product Passports (DPPs) have emerged as a promising solution to address a variety of industry challenges. By providing a secure, verifiable, and comprehensive digital record of a product’s journey from source to consumer, DPPs enable brands to enhance product authenticity, traceability, and customer engagement.

One example of a successful very early implementation of the DPP idea in the cosmetics industry is L’Oréal’s use of blockchain technology to track the provenance of ingredients in its Garnier brand’s products. This initiative, launched in partnership with IBM, has enabled L’Oréal to provide greater transparency to its customers and strengthen its commitment to sustainability (IBM, 2020).

Another example is the French company La Roche-Posay, which launched the My Skin Track UV wearable device, enabling users to track their UV exposure and offering personalized skincare recommendations through a connected app (La Roche-Posay, 2018). This innovative use of digital technology demonstrates how DPPs can enhance customer engagement and deliver tangible benefits to consumers.

While specific metrics related to the adoption and impact of DPPs in the cosmetics industry are limited, the potential benefits are clear. According to a report by MarketsandMarkets, the global anti-counterfeit packaging market is expected to grow at a CAGR of 12.1% from 2020 to 2025, reaching USD 188.2 billion by 2025 (MarketsandMarkets, 2020). This growth projection suggests that there is a significant demand for solutions like DPPs that can help brands combat counterfeiting, ensure product authenticity, and enhance customer trust.

Customer engagement and object marketing features are crucial components of cosmetic DPPs, as they enable brands to build lasting relationships with their customers and encourage them to interact with the digital passport.

It shall be understood that a customer cosent regarding the processing of personal identifiable data (PII) is required for the use cases outlined in this section.

Here are some examples of these features, along with relevant sources:

1. Personalized product recommendations: By gathering data about customers’ preferences and usage habits, DPPs can offer personalized product recommendations, enhancing the customer experience and promoting cross-selling opportunities. A study by Accenture found that 91% of consumers are more likely to shop with brands that provide personalized offers and recommendations (Accenture, 2018).
2. Virtual try-on experiences: Brands like L’Oréal, Sephora, and MAC Cosmetics have introduced augmented reality (AR) features in their apps, allowing users to virtually try on makeup products before making a purchase. These virtual try-on experiences can be integrated into the DPP, enabling customers to explore various looks and styles with ease (Forbes, 2018).
3. Exclusive tutorials and content: Providing customers with access to exclusive makeup tutorials, tips, and tricks from professionals or influencers can help brands foster a sense of community and engagement. For example, Tarte Cosmetics has collaborated with influencers to create exclusive content available through their app and website (Tarte Cosmetics).
4. Gamification and reward systems: Integrating gamification elements into the DPP, such as point systems, badges, and rewards for completing tasks, can encourage customers to interact with the digital passport and brand. For instance, beauty retailer Ulta Beauty offers a rewards program that enables customers to earn points for their purchases, which can be redeemed for discounts, exclusive products, or other incentives (Ultra Beauty).
5. User-generated content (UGC) incentives: Encouraging customers to create and share their own makeup looks or tutorials using the cosmetic products can help generate buzz and increase brand awareness. Offering incentives for UGC, such as discounts or features on the brand’s social media channels, can further motivate customers to participate. A study by Stackla found that 79% of consumers say UGC highly impacts their purchasing decisions (Stackla, 2017).

4. Digital Product Passports: Concept and Benefits

Definition: A Digital Product Passport (DPP) is a comprehensive, secure, and verifiable digital record that contains information about a product’s lifecycle, from its origin and manufacturing process to its distribution and final disposal.

The DPP aims to provide transparency and traceability for both customers and brands while addressing various objectives such as:

• Product Authenticity: By offering a verifiable record of a product’s journey, DPPs help ensure that customers receive genuine, high-quality products, and combat counterfeiting and fake packaging in the market.
• Product Recall: In case of quality issues or safety concerns, DPPs enable efficient and targeted product recalls, minimizing risks for customers and reducing costs for brands.
• Product Information: DPPs provide detailed information about a product’s composition, sourcing, production, and product carbon footprint (also known as CO2 Footprint), empowering customers to make informed purchasing decisions.
• Product Provenance: By documenting the entire supply chain, DPPs offer insight into a product’s origins and promote sustainable and ethical practices.
• Customer Engagement: DPPs serve as a platform for brands to engage with customers, providing personalized content, product recommendations, and creating a direct communication channel.

Advantages for customers and brands

The implementation of DPPs offers numerous benefits for both customers and brands in the cosmetics industry:

For customers:

1. Trust and Confidence: DPPs help customers verify the authenticity and quality of cosmetic products, building trust in the brand and increasing confidence in their purchasing decisions.
2. Informed Choices: Access to detailed product information allows customers to make informed choices based on their preferences, such as ingredient sensitivities, ethical considerations, or environmental impact.
3. Personalized Experience: By offering personalized content, product recommendations, and exclusive promotions, DPPs enhance the overall customer experience and foster brand loyalty.
4. Empowerment: DPPs empower customers to become more knowledgeable about the products they use, contributing to a greater sense of control and satisfaction with their purchases.

For brands:

1. Brand Protection: DPPs help brands combat counterfeiting and protect their reputation by ensuring customers receive genuine, high-quality products while enabling customers to identify fake packaging.
2. Customer Insights: By capturing valuable customer data and interactions, DPPs provide brands with insights into customer preferences and behavior, enabling targeted marketing efforts and product development.
3. Competitive Advantage: Offering transparency and traceability through DPPs can differentiate a brand from its competitors, appealing to customers who prioritize sustainability and ethical practices.
4. Enhanced Customer Engagement: DPPs provide brands with an additional channel to engage with customers, increasing loyalty, driving repeat purchases, and strengthening long-term relationships.

5. Interconnected Experiences: Lucy and Anna’s Symbiotic User Journeys

In the ever-evolving landscape of the cosmetics industry, the digital product passport (DPP) serves as a powerful tool that connects and enriches the experiences of customers like Lucy and brand marketing managers like Anna. This chapter explores the symbiotic relationship between these two user journeys, highlighting the ways in which the DPP fosters meaningful interactions, valuable insights, and opportunities for growth. As Lucy navigates her journey as a customer seeking quality, authenticity, and engagement, Anna embarks on an analytical adventure, leveraging data and insights gleaned from the DPP to make strategic decisions for the brand. Together, Lucy’s and Anna’s interconnected experiences demonstrate the transformative potential of DPPs in revolutionizing the cosmetics industry and enhancing the value for both customers and brands.

5.1 Lucy’s Digital Voyage: Revolutionizing the Cosmetics Experience with a Digital Product Passport

Lucy’s user journey with a digital product passport (DPP) represents a new era in customer experience within the cosmetics industry. By seamlessly integrating technology, transparency, and customer engagement, Lucy embarks on an immersive and informative journey with the eyeshadow palette of her choice. This innovative approach to customer-brand interaction revolutionizes the way consumers discover, learn about, and engage with cosmetic products. Through this chapter, we will explore how the DPP enriches Lucy’s experience, while providing invaluable insights for brands to better understand and cater to their customers’ needs and preferences.

1. Lucy is browsing an e-commerce platform, looking for a high-quality makeup cosmetics product. She comes across a promising eyeshadow palette from a reputable brand. To ensure the product’s authenticity and quality, Lucy checks the verifiable credentials provided on the platform. These credentials confirm that the product is genuine, cruelty-free, has been ethically sourced, the product packaging has been manufactured from sustainable raw materials, and the product carbon footprint is (PCF) zero. Satisfied with the information, Lucy decides to purchase the eyeshadow palette.
2. After completing the purchase, Lucy receives a purchase order (PO) that includes the QR code of the serialized product. Curious about the product’s features and potential uses, Lucy scans the QR code or directly adds the PO to her digital cosmetic cabinet. She is directed to a webpage with detailed information about the palette, including its ingredients and an instructional video demonstrating various techniques and eyeshadow looks she can create with the palette. Excited to try these new looks, Lucy eagerly awaits the arrival of her purchase.
3. Once the eyeshadow palette arrives, Lucy scans the QR code on the package to verify its provenance. She is presented with a visual representation of the product’s supply chain, including its manufacturing date, location, and any relevant certifications, such as organic or fair-trade labels. This information further assures Lucy of her purchase’s quality and ethical standards.
4. In addition to the provenance information, Lucy explores the eLeaflets with information about the product’s ingredients and health warnings available through the QR code. She then checks the customer engagement features. She watches a series of video tutorials from influencers showcasing different makeup looks and styles she can achieve using the eyeshadow palette. She also discovers a promotion for a limited-time offer to buy a complementary eyeliner at a discounted price. Lucy decides to take advantage of this promotion and purchases the eyeliner.
5. Finally, Lucy notices a “Share Your Look” feature that encourages users to create and upload their own makeup tutorials using the eyeshadow palette. Inspired by the tutorials she has watched, Lucy decides to create her own video demonstrating her favorite look. She uploads the tutorial to the brand’s platform and shares it with her friends, further engaging with the brand and the cosmetic product.

Throughout the user journey, Lucy discovers, purchases, and engages with a high-quality eyeshadow palette by interacting with its digital product passport (DPP). From the initial exploration of product verifiable credentials on an e-commerce platform to learning innovative makeup techniques through exclusive tutorials accessed via the QR code, Lucy enjoys a seamless and informative experience. As she receives her product, she delves deeper into the palette’s provenance and utilizes customer engagement features, such as creating and sharing her own makeup tutorial. The DPP not only enriches Lucy’s cosmetics experience but also fosters a strong connection between her and the brand, encouraging long-term loyalty and satisfaction.

5.2 Anna’s Analytical Adventure: Harnessing the Power of Digital Product Passports for Data-Driven Brand Success

Anna’s user journey as a brand marketing manager demonstrates the transformative potential of digital product passports (DPP) in the cosmetics industry. By leveraging customer interactions and engagement data from the DPP, Anna gains invaluable insights into customer preferences, interests, and behaviors. We assume that Lucy gave her consent to share her data with the brand so that the eyeshadow palette brand can work with Lucy’s data in a variety of customer locations including the EU.

This chapter delves into how these insights empower Anna to make data-driven decisions that enhance product development, marketing campaigns, and overall customer satisfaction. Through Anna’s analytical journey, we will explore the strategic advantages DPPs provide to brands, positioning them for long-term success and growth.

1. Anna, the brand marketing manager (or her algorithms), reviews Lucy’s DPP interactions and engagement with the eyeshadow palette. She notes Lucy’s interest in the various video tutorials and her participation in the “Share Your Look” feature. By analyzing data from Lucy and other customers, Anna observes that many users are keen to learn about different makeup techniques and enjoy sharing their own creations. She also identifies a trend in customers purchasing the complementary eyeliner following the limited-time offer.
2. Anna uses the insights gathered from Lucy and other customers to update the customer segmentation database. Examples of new insights include the identification of a segment of customers interested in cruelty-free and ethically sourced products and a segment that frequently engages with user-generated content. These insights enable the brand to tailor their marketing and product development efforts to cater to these specific customer groups.
3. Based on the customer data and new insights, Anna suggests product development ideas that cater to the interests and preferences of their customer base. For example, they could develop a series of makeup brushes with sustainable materials or create a line of vegan makeup products. Another idea could be a step-by-step eyeshadow tutorial kit for beginners, with easy-to-follow instructions and diagrams.
4. Anna uses the customer insights to plan a new marketing and promotion campaign. Considering Lucy’s and other customers’ interests in learning makeup techniques, Anna plans a campaign featuring a series of expert-led makeup workshops, both online and in-store. Customers who attend these workshops could receive exclusive discounts on selected products, incentivizing participation.
5. To create individual cross-selling offers for Lucy, Anna uses Lucy’s purchase and engagement history. Based on Lucy’s interest in ethical products and her purchase of the complementary eyeliner, Anna sends Lucy a personalized offer for a new line of eco-friendly makeup brushes at a discounted price.
6. Anna decides to promote Lucy’s user-generated content on the brand’s social media channels, extending her reach and showcasing the brand’s engaged and creative customer base. This not only validates Lucy’s contribution but also encourages other customers to share their own experiences and looks.
7. Anna updates the financial planning based on the DDP data gathered across multiple customers. The insights reveal an increase in sales due to personalized cross-selling offers, the limited-time eyeliner promotion, and the customer-generated content. With this data, Anna can optimize the marketing budget, allocating resources towards the most effective campaigns and channels that drive customer engagement and sales.

Throughout the user journey, Anna continuously analyzes customer interactions and engagement with the DPP to refine marketing strategies, develop new products, and enhance customer satisfaction. This iterative process ensures the brand stays attuned to customer needs and preferences, fostering long-term success and growth.

6. Strategies to Boost DPP Adoption and Engagement

To increase user engagement with the eyeshadow palette’s DPP and boost the QR code scanning rate, brands can implement various strategies that entice customers to interact with the digital product passport. These strategies include:

Promotions, lotteries, incentives, and product customization

To encourage customers to adopt and engage with Digital Product Passports (DPPs), brands can implement various promotional strategies and incentives that provide value and entice users to interact with the DPP by scanning the QR code:

1. Exclusive promotions and discounts: Offering exclusive discounts, giveaways or special offers to customers who scan the DPP’s QR code can incentivize users to explore the digital passport and its features. Highlight these promotions on the product packaging and in marketing materials to encourage scanning.
2. Lotteries and giveaways: Organizing lotteries or giveaways accessible only through the DPP can attract customers seeking to win free products or other rewards.
3. Loyalty programs: Integrating DPP usage into existing loyalty programs can encourage customers to engage with the passport more frequently, as they can accumulate points, unlock badges, or gain access to exclusive benefits.
4. Referral programs: Implementing referral programs that reward customers for sharing the DPP with friends and family can help increase adoption and create a network effect.
5. Product Customization: Offer customers the opportunity to personalize their eyeshadow palette (e.g., selecting individual shades, custom packaging designs) by scanning the QR code. This unique feature can create a sense of ownership and encourage customers to engage with the DPP.

Influencer collaborations, gamification, and augmented reality experiences

Leveraging the power of influencers, gamification, and augmented reality (AR) experiences can further enhance DPP adoption and engagement:

1. Influencer collaborations: Partnering with influencers to create content related to the DPP, such as tutorials or product demonstrations, can pique customer interest and drive engagement. Influencers share their exclusive tutorials, tips, and promotions available only through the DPP, inspiring their followers to engage with the QR code.
2. Incentives for User-Generated Content: Encourage customers to create and share their own makeup looks or tutorials using the eyeshadow palette by offering incentives, such as product discounts, new UGC revenue streams for the customers, or feature on the brand’s social media channels, only accessible through scanning the QR code.
3. Gamification: Incorporating gamification elements like achievements, leaderboards, or challenges into the DPP can make the user experience more fun and engaging, prompting customers to interact with the digital passport more frequently. Examples are badges or rewards for completing various tasks (e.g., watching tutorials, sharing user-generated content, or providing product feedback) after scanning the QR code. Customers can redeem these points for discounts, exclusive access to limited-edition products, or other incentives.
4. Augmented reality experiences: Integrating AR experiences into the DPP can provide users with an immersive and interactive way to explore product features, virtually try on cosmetics, or access exclusive content. This can not only attract customers but also create a memorable and shareable experience. For example, customers could virtually try on different eyeshadow looks or receive personalized makeup tutorials in AR.

By combining these strategies, brands can create a more compelling and interactive DPP experience, encouraging customers to adopt the digital passport and engage with its features regularly. This, in turn, can help brands achieve their objectives related to product authenticity, customer engagement, and transparency, ultimately resulting in a more satisfied and loyal customer base.

7. The Digital Cosmetic Cabinet: Aggregating DPPs and Personalized Recommendations

The Digital Cosmetic Cabinet is a virtual platform that aggregates multiple Digital Product Passports (DPPs) for cosmetic products, providing customers with a comprehensive and personalized view of their cosmetic collection. Customers need to scan QR codes only once. When the QR code of a new product is scanned, the product is automatically added to the customer’s Digital Cosmetic Cabinet. It will be also possible to integrate the customer’s e-commerce transactions with the Digital Cosmetic Cabinet so that scanning can be avoided. In this case, scanning will be necessary for product authenticity checks.

By integrating various DPPs, the Digital Cosmetic Cabinet creates a cohesive and interactive user experience that offers cross-selling opportunities, tailored product recommendations, and the ability to create unique individual looks.

Cross-selling, product recommendations, product recalls and adverse event reporting

One of the key features of the Digital Cosmetic Cabinet is its ability to propose cross-selling products that complement the customer’s existing cosmetic collection. By analyzing the DPPs within the cabinet, the platform can identify gaps in the customer’s collection or suggest items that work well with their current products. This targeted approach to cross-selling can help customers discover new items and encourage them to try different products within the same brand or across multiple brands.In addition, product recalls and adverse event reporting can be added as well.

In addition to cross-selling opportunities, the Digital Cosmetic Cabinet can provide personalized product recommendations based on the customer’s preferences, needs, and cosmetic history. By taking into account factors such as skin type, color preferences, and past purchases, the platform can suggest products that are likely to appeal to the customer, increasing the likelihood of purchase and satisfaction.

Creating individual looks

The Digital Cosmetic Cabinet can also serve as a creative tool for customers to explore different looks and styles using their cosmetic collection. By leveraging the DPPs and augmented reality (AR) technology, the platform can enable users to virtually try on different products and combinations, creating a customized and interactive experience. Customers can experiment with various looks, receive expert advice, and even share their creations on social media, driving user engagement and promoting the platform further.

The integration of the Digital Cosmetic Cabinet within the DPP ecosystem not only enhances the overall customer experience but also provides brands with valuable insights into customer preferences and behavior. This data can be used to develop targeted marketing campaigns, inform product development, and ultimately strengthen the relationship between brands and their customers.

8. Package Leaflet of Cosmetic Products

Package leaflets for cosmetic products contain essential information to help consumers use the products safely and effectively. They typically include details such as:

• Product description and intended use
• Instructions for use, including application methods and precautions
• List of ingredients, highlighting any potential allergens
• Storage and disposal instructions
• Safety warnings and possible side effects, when aggregated in a digital cabinet ingredient interactions can be analysed
• Manufacturer’s contact information and batch number

Importance and regulatory requirements

Package leaflets serve as a crucial source of information for consumers, ensuring that they understand how to use the product properly and avoid any potential risks associated with misuse. Regulatory authorities, such as the European Union, often require package leaflets for cosmetic products to ensure consumer safety and promote transparency within the industry. These requirements mandate that manufacturers provide clear, accurate, and easily accessible information to consumers.

Benefits of digital package leaflets

Digital package leaflets offer several advantages over traditional paper leaflets, including:

• Enhanced accessibility: Digital leaflets can be easily accessed and read on various devices, making it more convenient for consumers to access the information they need.
• Environmental sustainability: By eliminating the need for printed materials, digital leaflets reduce waste and contribute to more sustainable packaging practices.
• Ease of updates: Digital leaflets can be quickly and easily updated to reflect new information or regulatory changes, ensuring that consumers always have access to the most current information.
• Interactive features: Digital leaflets can incorporate interactive elements, such as video tutorials or product recommendations, to provide a more engaging and informative user experience.

The importance of verifiable credentials for digital package leaflets

Implementing digital package leaflets using verifiable credentials is essential to ensure the authenticity, integrity, and validity of the data provided. Verifiable credentials offer several key benefits:

• Data authenticity: Verifiable credentials ensure that the digital leaflet information originates from a trusted source, such as the product manufacturer or regulatory authority, reducing the risk of counterfeit or inaccurate information.
• Data integrity: Verifiable credentials protect the digital leaflet data from unauthorized tampering, ensuring that the information remains accurate and reliable.
• Data validity: Verifiable credentials can be used to manage the expiration, revocation, and replacement of digital leaflet information. This ensures that consumers always have access to the most up-to-date information, even if the product or its associated regulations change over time.
• Audit logs for regulatory compliance: Verifiable credentials can be integrated into the system of records of a manufacturer. Creation, update, and approval process events of the digital package leaflets will be stored in audit logs.
• Enhanced user privacy: Using decentralised technology for look-up and data retrieval provides solutions to reduce the correlation of user data when interacting with the DPP to improve privacy. When users provide their informed consent (opt-in) in exchange for a promotion, discount, or product voucher, the brand can create user profiles to improve the users’ individual experience. The DPP infrastructure can be configured to serve data privacy, consumer protection, and user consent regulations in different geographies.

By incorporating verifiable credentials into the design and implementation of digital package leaflets for cosmetic products, manufacturers can provide consumers with secure, accurate, and easily accessible information that meets regulatory requirements and enhances the overall user experience.

9. Conclusion

The cosmetics industry is poised to benefit significantly from the implementation of Digital Product Passports (DPPs). As consumer demand for transparency, sustainability, product carbon footprint (PCF) information, and personalized experiences continues to grow, DPPs will play a crucial role in meeting these expectations while providing brands with valuable insights and opportunities for growth. The adoption and integration of DPPs in the cosmetics industry are expected to increase as more brands recognize the potential benefits and as regulatory requirements continue to evolve.

The importance of authenticity and integrity of data in the form of verifiable credentials

Ensuring the authenticity and integrity of the data contained within DPPs is essential to maintain trust in the system and deliver accurate, reliable information to customers. Verifiable credentials serve as a secure and tamper-proof method to guarantee the authenticity of the data, ensuring that customers can confidently rely on the information provided. Furthermore, the use of verifiable credentials helps protect brands from counterfeiting, safeguarding their reputation and ensuring the quality of their products.

The importance of maintaining market access to the EU when DPPs are mandatory for cosmetic products

As regulatory requirements evolve and DPPs become mandatory for cosmetic products within the EU, it is crucial for brands to comply with these regulations to maintain market access. The EU represents a significant market for the cosmetics industry, and failure to comply with mandatory DPP requirements could result in lost sales, reputational damage, and potential legal repercussions. By proactively adopting DPPs, brands can ensure they are well-positioned to meet regulatory demands and maintain access to this important market.

Opportunities for further innovation and growth

The introduction of DPPs in the cosmetics industry opens up numerous opportunities for innovation and growth. As the technology continues to develop, new features and capabilities will enhance the customer experience, such as improved AR integration, artificial intelligence-driven product recommendations, and advanced data analytics. The aggregation of DPPs in platforms like the Digital Cosmetic Cabinet will also provide unique opportunities for cross-selling, personalization, and creative exploration.

Moreover, the data gathered through DPPs can inform more targeted marketing efforts, product development, and sustainability initiatives, driving innovation and growth within the cosmetics industry. As brands continue to embrace and leverage DPPs, the cosmetics industry can expect a future marked by greater transparency, customer engagement, and sustainable practices, ultimately benefiting both customers and businesses alike.

Applying DPP concepts to other product categories and adjacent industries

The DPP concept can be adapted and applied to various product categories and adjacent industries, driving further opportunities for innovation, transparency, and growth. Here are five examples:

1. Absorbent Hygiene Products: For products like diapers, adult incontinence products, and feminine hygiene products, DPPs can provide detailed information about materials, absorbency levels, and safety testing. This transparency can help customers make informed choices based on their personal needs and preferences. DPPs can also offer personalized product recommendations, usage tips, and information on proper disposal methods to promote environmental sustainability.
2. Fashion and Apparel: The fashion industry can benefit from DPPs by providing customers with information about the materials, manufacturing processes, and ethical practices involved in producing garments. This increased transparency can help customers make more informed choices and support brands that align with their values. Additionally, DPPs can offer personalized styling recommendations and facilitate customer engagement.
3. Toys: The toy industry can leverage DPPs to provide valuable information about product safety, materials used, age appropriateness, and manufacturing processes. This can help parents and caregivers make informed and safe choices for children. In addition, DPPs can offer interactive game suggestions, assembly instructions, and facilitate engagement through contests and user-generated content.
4. Bed Mattresses: In the mattress industry, DPPs can provide valuable information about materials, manufacturing processes, durability, and comfort levels. This can help customers make informed choices that align with their comfort preferences and health needs. Additionally, DPPs can provide personalized sleep tips, care instructions, and warranty information.
5. Home and Furniture: For home and furniture products, DPPs can provide customers with information about materials, craftsmanship, and sustainability practices. This can help customers make more informed choices and support brands with ethical and environmentally-friendly practices. Additionally, DPPs can offer personalized home décor and design recommendations, as well as tips for product care and maintenance.
6. Electronics: In the electronics industry, DPPs can provide information on product specifications, manufacturing processes, and supply chain details, enabling customers to make informed decisions and compare products more easily. DPPs can also enhance customer engagement by offering personalized content, product tutorials, and after-sales support.
7. Pharmaceuticals*: DPPs can help ensure the authenticity and safety of pharmaceutical products by providing information about the manufacturing process, ingredients, and testing procedures. This increased transparency can help build trust between customers and pharmaceutical companies, and potentially reduce the risk of counterfeit products entering the market. Furthermore, DPPs can offer personalized dosage recommendations, side-effect warnings, and drug interaction information.
8. Food and Beverages*: DPPs can be applied to food and beverage products to provide detailed information about ingredients, sourcing, nutritional content, and production methods. This can help customers make healthier and more sustainable choices while also promoting transparency within the industry. DPPs can also offer recipe suggestions, cooking tips, and personalized dietary recommendations.

* Not considered by the EU ESPR for mandatory DPP implementation.

In each of these industries, just as in the cosmetics sector, DPPs can foster transparency, customer engagement, and value-added personalization. This demonstrates the versatility and potential of DPPs as a tool for innovation and customer-centricity across a wide range of product categories.Learnings about DPP benefits and challenges associated with their adoption include:

1. Consumer Demand for Transparency: The cosmetics industry has demonstrated that consumers increasingly value transparency regarding product ingredients, sourcing, and ethical practices. This growing demand for transparency extends across various industries, making the lessons learned from cosmetic DPPs relevant and valuable for other product categories seeking to meet these consumer expectations.
2. Combating Counterfeiting: The cosmetics industry has shown that DPPs can be an effective tool for preventing counterfeit products from entering the market. Other industries, particularly those dealing with high-value or safety-critical products, can benefit from adopting DPPs to protect their brand reputation, ensure product quality, and maintain consumer trust.
3. Enhanced Customer Engagement: The cosmetic DPP’s customer engagement features, such as personalized recommendations, tutorials, and user-generated content, have proven successful in fostering brand loyalty and driving sales. Other industries can leverage these learnings to create tailored DPP experiences that resonate with their target audience and drive deeper engagement.
4. Data-driven Decision Making: The cosmetic DPP demonstrates the value of collecting and analyzing data to inform marketing, product development, and sustainability initiatives. Other industries can benefit from this data-driven approach, using the insights gained from DPPs to guide their strategic decisions and optimize their operations.
5. Regulatory Compliance: The cosmetics industry has showcased the importance of DPPs in meeting regulatory requirements, such as those established by the EU. As regulations evolve and expand to encompass other product categories, the learnings from the cosmetic DPP can provide valuable guidance for businesses seeking to maintain market access and comply with emerging standards.

By applying the lessons learned from cosmetic DPPs to other product categories, businesses can capitalize on the opportunities presented by increased transparency, customer engagement, and data-driven decision-making, ultimately driving innovation and growth across a wide range of industries.

About Spherity

Spherity is a German decentralized digital identity software provider, bringing secure identities to enterprises, machines, products, data, and even algorithms. Spherity provides the enabling technology to digitalize and automate compliance processes in highly-regulated technical sectors. Spherity’s products empower cyber security, efficiency, and data interoperability among digital value chains. Spherity is certified according to the information security standard ISO 27001.

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Addendum — Consumer of DPP Data

Digital Product Passports (DPPs) provide a wealth of information that can be utilized by various entities for different purposes. Here’s a list of key consumers of DPP data:

1. End Consumers: They use DPP data to make informed purchasing decisions based on product origin, ingredients, and environmental impact. This enhances transparency and consumer trust.
2. Regulatory Authorities: They use DPP data to monitor compliance with sustainability and product safety regulations, ensuring that all products on the market meet the established standards.
3. Manufacturers: They use DPP data for product development and improvement, taking into account consumer feedback and usage patterns reflected in the data.
4. Retailers and Distributors: They use DPP data to validate product authenticity and quality before stocking and selling products. It also helps them to tailor their marketing and sales strategies.
5. Supply Chain Partners: They use DPP data to trace product origin and ensure that all components or ingredients comply with sustainability and ethical sourcing standards.
6. Third-Party Verifiers and Certifiers: They use DPP data to verify the accuracy of manufacturers’ claims about a product’s environmental impact, ingredients, and origin.
7. Marketing and Advertising Agencies: They use DPP data to develop targeted marketing campaigns based on consumer preferences and behavior patterns.
8. Environmental and Consumer Advocacy Groups: They use DPP data to monitor and report on companies’ adherence to sustainability and consumer protection standards.
9. Research Institutions and Academia: They use DPP data for research purposes, studying consumer behavior, product trends, and the impact of various products on the environment.
10. Customs Officials: They use DPP data to verify the authenticity of products at the border, ensuring that all imported products comply with local regulations and standards. This helps prevent the entry of counterfeit or non-compliant goods.