The New Era of Traceability: A Case Study on Digital Product Passport

Digitalization, defined as "a process aimed at improving an entity through significant changes in its properties, enabled by the combination of information, computing, communication, and connectivity technologies" (Vial, 2019), has been widely analyzed in the literature for its transformative impact on organizations. It plays a crucial role in optimizing business process performance (Mawson et al., 2019) and redefining business models (Vaska et al., 2021), acting as a catalyst for rapid and profound transformations across multiple industrial sectors (Bharadwaj et al., 2013). Consequently, organizations must develop the necessary competencies to govern technological evolution, not only to enhance economic efficiency and gain competitive advantages but also to generate a positive impact on sustainability (Tohãnean et al., 2020; Li, 2020). The Triple Bottom Line (TBL) theory offers a framework to assess this impact, asserting that corporate sustainability is based on three interdependent dimensions: economic success, environmental benefits, and social value creation for a broad range of stakeholders (Elkington, 1997). Achieving these objectives requires the development of more sustainable products, the adoption of innovations in production processes (Evans, 2022), and the transformation of business models (BM) through the integration of circular economy and sustainability principles (De Medeiros et al., 2014; Todeschini et al., 2017; Geissdoerfer et al., 2017). This transformation often necessitates a radical revision of existing BMs to decouple value creation from intensive resource consumption (Bocken et al., 2014). The fashion industry, known for its high consumption of environmental resources and negative externalities, is one of the sectors most in need of sustainable and circular business models. In this context, the European Commission’s directive mandating the adoption of Digital Product Passports (DPPs) by 2030 represents a paradigm shift in promoting sustainability and the circular economy within the textile and fashion sectors. Implementing DPPs requires collaboration among multiple supply chain (SC) stakeholders to collect and share extensive product information throughout its lifecycle (Plociennik et al., 2022). Furthermore, DPPs can facilitate the adoption of circular business models (CBMs), as their implementation necessitates greater transparency and data interoperability along the SC. Despite the regulatory mandate to implement DPPs for most product categories by 2030 (GS1, 2023), literature on the subject remains limited. Specifically, a consolidated theoretical framework on managing traceability and data governance through DPPs is still lacking (Montecchi et al., 2021). Additionally, there is scarce empirical evidence from pilot projects validating DPP applications in real-world settings, limiting the generalizability of theoretical models (Lövdahl et al., 2023). While regulatory frameworks support DPP adoption, studies addressing the harmonization of global regulations with European standards remain insufficient (Ducuing et al., 2023). In this sense the technical integration of DPPs in the textile and apparel industry has thus far been explored in a fragmented and unsystematic manner (Domskienì, 2024). This study aims to bridge these gaps by examining the implementation of DPPs in the luxury fashion sector through an analysis of two pilot use case conducted by ALPHA. The research investigates the role of DPPs in aligning corporate sustainability strategies with the Ecodesign for Sustainable Products Regulation (ESPR) and facilitating the adoption of circular business models. To achieve these objectives, a qualitative methodology based on a case study approach was adopted, focusing on two longitudinal exploratory cases within the luxury fashion sector. The analysis was conducted on ALPHA, an Italian company specializing in the design, engineering, development, prototyping, and production of high-end collections for major luxury brands such as Burberry, Gucci, and Armani. The case studies examined two specific initiatives: the integration of DPP technology into ALPHA’s production processes and the testing of advanced textile recycling solutions. The case study approach was chosen for its ability to capture complex phenomena in real-world contexts, offering empirical insights into the intersection of digital transformation and sustainable fashion practices. Following Yin’s (2017) methodology, this approach enabled an understanding of how a historically linear and fragmented supply chain is adapting to the technological transformations required for regulatory compliance and circularity. ALPHA was selected as a revelatory case (Eisenhardt & Graebner, 2007) due to its strategic position within the global luxury fashion supply chain. The extensive experience of its founders, with over 40 years in the industry, makes ALPHA an ideal case study to assess the impact of digitalization on both internal operations and external supply chain relationships. Data collection followed a multi-method approach, integrating primary and secondary sources to ensure a robust analytical foundation. Primary data were obtained through over 20 hours of participatory observation by one of the authors, semi-structured interviews (60-120 minutes) with key stakeholders, and project presentation meetings. Additionally, informal interactions with company personnel provided tacit knowledge and a deeper understanding of organizational dynamics. Secondary data sources included internal company reports, strategic planning documents, and public sustainability disclosures, which enriched the contextual depth of the analysis. Data were analyzed using a structured coding process based on the methodology of Gioia et al. (2013), allowing for the identification of emerging patterns and the development of a conceptual framework for the implementation dynamics of DPPs within the luxury fashion supply chain. This study highlights how ALPHA leveraged DPPs to integrate circularity and sustainability principles into its supply chain. One key use case involved collaboration with over 15 international partners to enhance textile material sorting and recycling processes and to develop a digital platform for data traceability throughout the supply chain. The integration of advanced sorting technologies, artificial intelligence, and blockchain-based traceability systems addressed inefficiencies in textile waste management, significantly improving transparency along the value chain. This initiative promoted the design of modular and recyclable garments, aligning with European Union policies aimed at waste reduction and closed-loop recycling systems. Another experimental use case focused on the practical application of DPPs in eco-design and environmental impact assessment. ALPHA developed garment prototypes showcasing the full potential of DPPs in ensuring material traceability and environmental responsibility. The integration of life cycle assessment tools enabled precise measurement of garments' ecological footprints, with results accessible via QR codes embedded in product labels. This level of transparency not only facilitates regulatory compliance but also empowers consumers and stakeholders with reliable sustainability data, encouraging more informed purchasing decisions. The findings underscore the transformative potential of DPPs in addressing sustainability challenges in the luxury fashion sector. By providing a standardized and immutable record of materials and production processes, DPPs enhance supply chain visibility, ensure compliance with emerging EU regulations, and bolster consumer trust. However, the study also identifies significant barriers to large-scale adoption. The absence of universally accepted data-sharing standards hinders interoperability between supply chain actors, particularly those outside the EU who may lack the necessary technological infrastructure for DPP compliance. Additionally, concerns regarding data security, intellectual property protection, and proprietary information disclosure present further obstacles, particularly in the highly competitive and secretive luxury fashion industry. Despite these challenges, the study highlights the strategic advantages of implementing DPPs in the luxury fashion sector. Blockchain-based solutions enhance end-to-end traceability of materials, enabling more effective recycling initiatives and aligning operations with circular economy principles. Furthermore, artificial intelligence-based material classification improves data accuracy, reducing errors in textile waste sorting and recovery processes. As sustainability becomes a key competitive differentiator, luxury fashion brands that proactively adopt DPPs can position themselves as leaders in responsible manufacturing, gaining a competitive edge in an increasingly transparency-driven regulatory environment. In conclusion, this case study identified four key second-order attributes essential for DPP implementation: [A] Integrated traceability systems, [B] Stakeholder-centric transparency mechanisms, [C] Data reliability and consistency assurance, and [D] Harmonized metrics and sustainable design standards. These elements are critical for companies transitioning to mandatory DPP adoption. This research contributes to the academic literature by providing both empirical insights and a theoretical framework based on real-world cases. Simultaneously, it offers practical guidance for industry professionals navigating the paradigm shift imposed by evolving regulations. As digital traceability emerges as a crucial enabler for circular business models, DPPs will play a central role in reshaping supply chains, ensuring regulatory compliance, and promoting sustainability in the fashion industry.