We are on the brink of an explosion in the number of available, internet-capable products that will connect our world like never before. In fact, Gartner predicts the number of connected products will nearly quadruple in the next two to three years, from 5.2 billion today to 20.4 billion by as soon as 2020.
One significant player in this forecasted meteoric rise is packaging. Connected packaging, otherwise known as intelligent or smart packaging, is seeing renewed attention as of late with recent advancements in technology. Today, most smartphones are capable of interacting with intelligent packaging, typically through NFC tags, QR codes, or other graphic markers. At the same time, powerful cloud-based software platforms that fully integrate with these trigger points enable brands and agencies to track consumer activity in real-time, collect valuable data, and uncover actionable insights that can help enhance campaign performance and drive business results.
With this functionality, connected packaging is gaining recognition as a powerful marketing tool, featuring form factors such as formal labels, hang tags, adhesive calls-to-action, and even shelf-talkers. NFC, Bluetooth, RFID, and other digital markers (e.g., Snapchat’s Snapcodes, Amazon’s SmileCodes, Coca-Cola’s Sip & Scan marks, and Spotify Codes) are just a few of the technologies being incorporated into product packaging to build omnichannel experiences for consumers.
Smart packaging = smart investment
Consumer tastes and expectations are evolving, and smart packaging presents a unique opportunity for brands to make direct connections with mobile-conscious, digital natives who are seeking more interactive and personalized ways to shop.
The smartphone serves as a portal to connect to consumers, as these devices are always with them. And with up to two billion devices in the market that are able to scan and interact with products through technologies like NFC or RFID, connected packaging is becoming a logical and impactful way to reach them from a marketing perspective.
The renewed notion of consumer choice is another notable factor contributing to the adoption of connected packaging. NFC tags embedded into a package or label is considered an “opt-in” technology due to the control consumers have to tap products with their smartphones at their own will. This circumvents the intrusiveness a potential buyer may experience when they’re instead bombarded by ads activated by in-store technology based on a user’s proximity, for example.
In fact, 56 percent of millennial and Gen Z consumers cut back on social media use in 2016 because they felt targeted by ads from companies they did not choose to engage, according to Lithium Technologies research. Opt-in technologies are a sure way to eliminate the risk of a brand’s message being disregarded, or being considered irrelevant or intrusive.
Meeting modern day expectations
Modern day consumers are some of the most well-educated buyers we’ve seen. They are vocal and they have access to more information than ever before. Brands today succeed when they can build trust and brand affinity by engaging their customers. Connected packaging offers the means to engage consumers and add value by delivering unique shopping experiences and differentiating the product from its competitors in-store at the point of sale and beyond.
GPShopper found 86 percent of shoppers prefer experiential shopping where they can try out products or interact in some way as they shop. Connected packaging brings this desire for interaction to life, personalizing the experience through the mobile phone.
In addition to helping brands re-establish direct connections to consumers who crave unique, omnichannel shopping experiences, connected packaging brings other benefits to modern day consumers, including brand story, product details, promotional offers, and cross-sell/upsell. With the simple tap of a smartphone, a consumer can instantaneously launch specialized content, including recipes, usage instructions, video demos, even insights on a company’s environmental sustainability efforts.
Intelligent packaging puts brands in the driver’s seat, delivering content and information to directly influence purchasing decisions.
Where two worlds collide
With NFC technology, in particular, each NFC-enabled tag integrated into product packaging has a unique unalterable ID, ensuring authenticity and allowing for one-to-one interaction between a consumer and a product. Once the product has been purchased, these tags can then be tapped again at home or on the go to enable e-commerce capabilities like instant reordering, further deepening the consumer’s engagement and their loyalty to the brand.
Sports nutrition leader Iovate, for example, is currently integrating NFC technology into four of its brands’ to deliver custom mobile content and drive e-commerce with an exclusive video from New England Patriots All-Pro tight end, Rob Gronkowski. This grants nutrition enthusiasts both the ability to reorder a product at the moment of need, along with the added benefit of experiencing engaging content featuring one of the NFL’s biggest names.
In an age of Amazon dominance and brick-and-mortar uncertainty, retail is driving the confluence of physical and digital shopping worlds. When product packaging gains a little bit of intelligence, consumers get the information and experiences they need – when and how they want it – while brands forge deeper brand loyalty with their customers.