Smart labels and packaging allow consumers to interact with products using connected devices, giving brands the opportunity to engage with consumers on a deeper level.
With technology and connectivity pervading all aspects of our daily lives, integrating product packaging into the Internet of Things (IoT) is a natural step. A rather basic form of this is the QR code, which consumers can scan to be redirected to a website. Near-field communication technology offers similar functionality in a more updated fashion using short-range wireless technology. Depending on how this technology is utilized, smart labels on packaging have the potential to profoundly change the shopping experience for consumers while also benefiting the manufacturer.
“A recent GlobalData study found that 55% of global consumers said ‘smartphone app connectivity’ was essential or nice to have when making a purchase. And this is even higher among younger generations,” says Moira Stein, insight and strategy at Berlin Packaging (Chicago). “GlobalData also found that 60% of global consumers want to know more about ingredient information, so that is a driving factor for consumers to scan a smart label. But consumers can also view product tutorials, browse product offerings, read reviews, learn about a company’s social or environmental initiatives, and more. Today’s consumers are also looking for personalized products and services. Interactive packaging can be used to help create customized product recommendations and personalize the user experience.”
Consumers are already using their phones in-store to investigate products they may be unfamiliar with as well as to compare prices. Interactive packaging incentivizes consumers to engage with that product. Even if a product with smart packaging is more expensive than a similar product, if the consumer can interact with said product and understand what it offers to justify a higher price tag, they may still buy that product. This is particularly true if this information underscores the quality and safety of a product as well as social and environmental consciousness. Third-party certifications are still relevant and important for this purpose, but smart, interactive packaging has the potential to supplement trusted certifications with even more information. For example, fully traceable products with smart packaging may allow consumers to know exactly where the ingredients in their products came from and to learn about the workers who harvested the raw materials used to make it.
Authentication can be another reason to incorporate smart packaging into your product design. Stein explains that high-end dietary supplement brands are utilizing smart labels in this way, providing each product with a unique code for authentication that redirects the consumer to the company’s website for more information. Not only does this give the consumer peace of mind, but it also allows brands to fight counterfeiting of their products. This is particularly important when consumers acquire products from third parties online from websites such as Amazon. Recently, NOW alerted Amazon that counterfeit NOW products were being sold on its marketplace.1 Giving consumers a means with which to validate their purchases and not be exposed to fraudulent, potentially dangerous products benefits both parties involved.
If you want to engage with consumers long-term, utilizing smart packaging in more personalized ways may be the key. There are already dietary supplement brands that provide their customers with a personalized dietary supplement regimen through a subscription-based platform, but what if off-the-shelf products engaged with consumers in similar ways? Stein points out that QR codes are already being used on prescription medication for refills. Why can’t dietary supplement brands do the same? Similarly, what if brands can utilize smart packaging to help consumers set schedules and reminders to increase dietary supplement compliance and therefore customer retention?
Engaging with consumers through smart packaging is a great way to compete and stand out in an increasingly saturated marketplace. Broadly speaking, implementation of this technology is still rather limited and basic, but this is bound to change rapidly. As adoption increases, so too will the features and capabilities, while also reducing the cost of implementation.