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November 27, 2023
7 Min Read
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Ecommerce boomed during the pandemic and though growth has since leveled off, e-sales increased 7.8% year over year in the first quarter of 2023, according to recent US Census Bureau data. As consumers spend more time and more dollars online, Food and Beverage, Pharma and Medical Supplies/Devices, and Consumer Packaged Goods (CPGs) are prioritizing the role packaging plays in an evolving, tech-reliant, omnichannel economy.
Today’s packaging is no longer just a box and offline experience — it’s a phygital extension of the shopper journey, an experience-conduit between brand and customer. With the right technology and creative execution, brands have the capability like never before to nurture and grow customer loyalty and sales with smart or “connected” packaging.
How connected packaging works.
Connected packaging gives the customer options to engage with a product or brand — it’s consumer empowerment at its best. Think about it: From an online purchase to unboxing to scanning a Quick Response (QR) code to social engagement to influencing more online purchases. Still, connected packaging is only as smart as how smart the technology used is.
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Before we look at examples of technologies used, here are two successful examples of how brands have leveraged connected packaging to connect with consumers:
• A successful case for “Would this treadmill fit in my house?”
Augmented Reality (AR) technologies literally provide a different dimension to customer engagement. Brands use AR to offer visual, immersive experiences, giving customers a life-like glimpse into what can be. Such is the case for a well-known exercise equipment and athletic wear brand. To help launch a new treadmill, the brand promoted it with a QR code on all its athletic wear packaging. When scanned, the QR code provided a 360-interactive look at the treadmill utilizing AR technology. Potential customers could envision how the treadmill would look in their homes as they walked from room to room. They could also inspect all the treadmill’s features and click on a link at the bottom of their screen to purchase the treadmill.
• A successful case for “Instructions included.”
A global skin care and cosmetics brand wants to remain true to its commitment to sustainability and decides to reduce packaging without minimizing the unboxing experience. Rather than include paper usage instructions, the brand includes instructions with an NFC tag on the product packaging. Once tapped, the customer has access to instructions, product ingredients, with a list of suggested products to try based on purchase history and other product data collected.
Can connected packaging go wrong?
Just because packaging includes some element of technology doesn’t mean it’s smart. Yes, connected packaging can go wrong.
Consider this brand scenario: For its Back-to-School campaign, a snack brand uses QR codes on its packaging with the promise of offering interactive games for its young consumers. When scanned, not only are children disappointed, but the adults who purchased the product are too, as the QR code leads to a broken link.
Broken links, games, or VR experiences that are lackluster, or perhaps the new recipes promised are not that appealing, or the ingredients are not affordable for the product’s demographic. Though customer’s journeys may not come to a complete halt with these kinds of disappointments and disruptions, any interruption in connection is potential for lost loyalty and revenue.
Sustainability and connected packaging.
According to a recent McKinsey report on sustainability in packaging, “Sustainability continues to be an increasingly important issue for the packaging value chain” and consumer awareness is following alongside in equal cadence. Because of this increased awareness, brands are looking to connected packaging to support their sustainability commitments and equally support their customers’ desire to become better stewards of the environment. Reduced use of papers and plastics and implementing recycled, natural, soluble packaging materials remains important as the cyclable economy expands.
But how can connected packaging support sustainability, aside from using QR codes to access digital instruction manuals, ingredients, coupons, and other marketing materials?
An innovator and provider of enabling technologies has created a packaging digital watermark that is able to help sort used packaging materials to improve recyclability. As the used packaging is processed in a recycling facility, a scanner reads the watermark and sorts the package according to its material composition. Brands are reported to increase their sustainability with this packaging technology which has been proven to achieve 99% detection. When coupled with consumer engagement capabilities, brands can deliver direct recycling information to clients and consumers, using the cloud-based data collected from the packaging’s watermarks.
To fully understand how connected packaging works is to fully understand how to leverage it for optimal customer experiences.
QR code best practices.
Though the Quick Response (QR) code — a matrix-variation barcode — has been around since 1994, it’s seen a revival with its creative potential for customer engagement, product personalization, and loyalty. In 2022, approximately 89 million smartphone users in the US scanned a QR code. QR code scans by smartphones are projected to reach over 100 million US users by 2025, according to Statista data.
While unboxing has traditionally been the end-experience along the customer purchasing journey, QR codes can now extend the journey. When brands’ packaging includes a QR code, it provides customers access to exclusive content, product information, special offers, tutorials, and immersive VR (virtual reality) and AR (augmented reality) experiences — all which point toward additional engagement and, hopefully, sales.
... there’s more to just creating a QR code and printing it on a box with the hope consumers will pull out their phone and engage.
But there’s more to just creating a QR code and printing it on a box with the hope consumers will pull out their phone and engage. According to QR code creator, Bitly.com, there are six basic best practices to follow when using QR codes for packaging:
1. Use the right size: The minimum pixelated square size should be 0.8 x 0.8 inches.
2. Use a Dynamic Code: The encoded URL should redirect to a second URL, which can be changed as needed.
3. File formats and types: QR codes can be created and saved in bitmap, vector formats, then downloaded in PNG or JPEG formats for package printing needs.
4. Mobile optimization: Test to ensure the platform is mobile-friendly.
5. Test pre-launch and package printing: QR codes’ redirection success relies on smartphone capabilities and human tech-savvy levels. So test, test, test.
6. Track post-launch: Monitor landing page/web address traffic for effectiveness.
Coming soon: A new, more versatile QR code will replace the UPC barcode that has been on consumer packaging for almost 50 years. This new single 2D QR code (digital link) can be read by point-of-sale (POS) scanners and will support brands’ continuous initiatives in the future to extend and enhance the customer experience beyond POS and unboxing.
QR codes vs NFC tags.
Much like QR codes, Near-Field Communication (NFC) tags on packaging transports customers to online content and experiences. But QR codes operate on one-way communication, and NFC tags operate via two-way, short-range electronic technology allowing for more data storage.
Instead of relying on people to open their smart phone, open the camera app, scan the QR code, then tap on a displayed link, NFC tags require a simple tap from phone to tag for a website to appear on a phone’s screen. In summary, to read a packaging NFC tag, users need not unlock their phone or install an NFC app; they simply tap and go.
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There are packaging pros and cons for QR codes and NFC tags. Regardless of which technology you choose, make sure to consider the user experience:
• Include a call to action: Place this near or in the actual QR code or NFC.
• Make the action worthwhile: Know your audience to know what coupon, offer, or VR/AR experience resonates with them.
• Communicate the value: Include the “why” and over-deliver.
• Include instructions: Never assume your entire customer base understands how to use the technology on your package.
• Minimize the steps: The fewer the steps between package and digital experience, the more chance for engagement.
Above all, lead the customer to an online experience that is creative, engaging, meaningful, and memorable.
The valuable, measurable benefits of connected packaging.
As brands continue to navigate the era of Web 3.0, connected packaging technologies must evolve to exceed customer expectations. Per Packaging Scotland’s recent article, Digital age heralds new era of packaging innovation, “Connected packaging has also expanded its capabilities to the point of being able to generate valuable data that can be analyzed to gain insights into consumer behavior, product usage, and market trends. For businesses, this enables more informed decision-making and personalized targeting.”In a digital world where consumer engagement and product loyalty are crucial for continuous sales, connected packaging enables brands to exceed their customers’ initial unboxing experience. Today’s customer journey doesn’t end with unboxing; it’s where and how the road to lasting brand loyalty authentically begins.
About the Author(s)
Packaging Center of Excellence Subject Matter Expert, Tag Americas
As the subject matter expert for Tag Americas Packaging Center of Excellence, Jan Stollerman is an experienced and recognized leader in marketing, packaging, and packaging artwork, trailblazing the way in innovation and proven strategies for global brands’ packaging and marketing initiatives.
In addition to spearheading all-things packaging at Tag, Stollerman has worked alongside notable brands such as Haleon, GSK, Novartis, L’Oréal, Colgate Palmolive, Citi, and others, ensuring swift, efficient, and at-scale deliverables.
Prior to Tag, he was Sr. Vice-President, Global Accounts, at SGS & Co. for more than 20 years. Notable achievements include being the pioneer for “Seeing AI” created for the visually impaired and leading the groundbreaking “Holy Grail 2.0” Track and Trace test initiative for packaging’s sustainable recycling.
You can reach out to Tag or email Jan Stollerman with your connected packaging questions.
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