Today's digital age has been defined by the proliferation of smart devices. From a watch to a bulb and everything in between, there is nothing that doesn't have a smart prefix anymore. However, there is seldom any thought given by consumers to the packaging that these products arrive in at their doorstep. It is this packaging which might be the smartest of all.
The Internet of Packaging (IoP), also known as intelligent or smart packaging, is a system that uses machine-readable packaging to communicate with the outside world. IoP can interact with scanners and mobile devices to track, monitor, and manage a product's quality and safety. The smart packaging market today is valued at an estimated $24.6 billion and is expected to grow at a CAGR of 9.8 per cent from 2023 to 2033. This is testament to the transformative power of IoP and how it is redefining the consumer experience in a highly competitive market.
EVERYTHING SMART
The way consumers perceive and utilise packaging has been undergoing a significant shift over the last few years. Consumers are increasingly environmentally conscious, demanding sustainable packaging solutions. The digital revolution has also increased expectations from brands to connect with consumers on a deeper level. This has paved the way for IoP, which represents a quantum leap in the packaging domain. It transcends the basic function of containing and protecting products, evolving into a platform for data exchange and digital engagement. Smart packaging, enabled by features like QR codes, RFID tags, and NFC chips, fosters a seamless connection between physical products and the digital world.
QR codes act as gateways to a wealth of information. When scanned by a smartphone camera, they can redirect consumers to product websites, nutritional information, or even interactive recipes. In 2023, Nestle leveraged QR codes for its #LoveBreakLingo campaign for Valentine's Day. Nestle inserted QR codes onto limited edition KitKat wrappers to appeal to young adults searching for a fun and interactive method to express their emotions. The campaign illustrated how combining technology with conventional marketing tactics can produce experiences that people will remember.
RFID technology takes consumer engagement a step further. These tiny tags embedded within packaging emit radio waves, enabling real-time tracking and monitoring of products throughout the supply chain. This has particular use cases in the FMCG industry. For instance, a carton of milk could transmit data about its temperature or location, ensuring optimal storage conditions and timely delivery.
NFC chips, similar to RFID tags, function through short-range wireless communication. When a smartphone equipped with NFC technology taps on the packaging, it can trigger actions like product authentication, loyalty program enrolment, or personalised discount offers. Ben & Jerry's ice cream brand has successfully implemented NFC chips, allowing consumers to unlock exclusive content and participate in interactive campaigns.
BEYOND THE BOX: UNLOCKING CONSUMER CONNECTIONS
The true power of IoP lies in its ability to foster a deeper connection between brands and consumers.
Smart packaging empowers consumers by granting access to detailed product information, reviews, and usage instructions through digital platforms. A simple scan of a QR code can provide consumers with real-time product information, including origin, manufacturing date, and even ethical sourcing practices. This transparency fosters trust and empowers consumers to make informed choices.
At the same time, IoP also opens doors to a new era of personalisation. By leveraging consumer data and preferences gleaned through QR code scans or NFC interactions, brands can tailor content and offers directly on the packaging itself. Nike has already implemented this by allowing customers to create their own pair of trainers using Nike's customisation platform via QR codes. This novel strategy fostered brand loyalty for Nike.
SEALING THE DEAL: HOW IOP GUARANTEES AUTHENTICITY
Counterfeiting remains a major concern in today's globalised market. IoP, however, offers robust solutions to combat this issue. Smart packaging integrates features like tamperevident seals and encrypted codes embedded within QR codes or RFID tags. These measures make it extremely difficult to replicate packaging, safeguarding consumers from purchasing counterfeit products. Consumers can also verify product authenticity by scanning a QR code or tapping their NFC-enabled smartphones on the packaging. Ralph Lauren has implemented a digital product ID system through QR codes. The QR codes are made from nano-porous silica which are placed directly on products or in packaging to track items through the supply chain. Consumers can scan the QR code with their smartphone to view product information, authenticate products and receive styling advice.
This technology also empowers real-time tracking and monitoring of products throughout the supply chain, ensuring the integrity of products during transportation and storage. This transparency builds trust with consumers and facilitates efficient inventory management.
Smart packaging uses sensors to track things like temperature, freshness, and even tampering during shipping. This real-time data allows manufacturers to forecast demand more accurately based on product movement and spoilage rates. At the consumption point, consumers can scan the packaging to verify contents and origin, ensuring quality and reducing recalls. Smart packaging thus creates a communication channel between product, producer, and consumer.
A FUTURE PACKED WITH EXCITEMENT
The future belongs to those who embrace change. In a dynamic marketplace, businesses that leverage IoP technologies will gain a significant competitive edge. The data collected through smart packaging can offer valuable insights into consumer behaviour, optimising marketing strategies and product development. While initial investments in IoP technology might seem substantial, the long-term benefits outweigh the costs. Improved inventory management, reduced shrinkage due to counterfeiting, and streamlined logistics lead to significant cost savings for businesses.
The future of packaging is interactive, informative, and downright exciting. As technology leaps forward, IoP promises even more mind-blowing applications. So, don't toss away the next package at your doorstep, it might just be the key to unlocking a whole new world of possibilities.