Has Packaging Reached its Digital Transformation Moment?

Data-driven tools and processes will drive changes, from AI package design to sustainable sourcing and EPR compliance.

Robert Quigley

July 3, 2024

4 Min Read
Shopping cart full of packages in the digital age.
Funtap/iStock/Getty Images

At a Glance

  • Labeling could become instantly recognizable to smartphones without the need for QR codes.
  • Real-time data will replace averages and estimates for accurate reporting from sourcing to end-of-life.
  • Companies can optimize today instead of overhauling tomorrow.

Digital transformation surrounds us, from cloud-based data storage to systems and services that enhance customer relationships, employee experience, product development design and innovation and more. In its various forms, navigating the digital future is a top priority for every major brand and retailer. Now the focus is on packaging, which is arguably leading the charge.

Data is at the heart of this transformation.

When it comes to consumer interaction, we’re now familiar with apps and quick-response (QR) codes on packaging. The next step will be data-enabled packaging that’s instantly recognizable by smartphones, which doesn’t require a QR code to do such things as unlock augmented reality (AR) games or enable them to access the background and supply chain provenance of a bottle of wine. Cues on packaging images will also be able to direct people to specific pieces of content and track engagement metrics.

Where these advances are most potent for brands is sustainability. Companies are used to data being a value-add. A lot of their historical data on packaging recyclability and the like, however, is based on averages and isn’t actually useful at all. In order for data to truly add value, brands will have to move to the next stage — with accurate real-time data.

Related:The Digital Wave: Revolutionizing Packaging Operations

That next stage has become the lynchpin of sustainable packaging at a time when new and more stringent regulations such as Extended Producer Responsibility (EPR) are encouraging increased recycling and waste collection. Businesses are now required to precisely report specific figures rather than relying on averages.

Similarly, end-of-life reporting hinges on data to measure recyclability. We’re even seeing the development of artificial intelligence tools that can track used packaging on a sorting line to quantify the recyclable materials collected and converted back into usable products and packaging.

"Brands are looking to quickly recreate the in-store shopping experience online while ensuring that all details normally obtained by the consumer from the packaging are accurately represented digitally."

The trend is driven by omnichannel.

Packaging’s digital transformation is also largely being driven by the growth in ecommerce and omnichannel retail post-COVID. All consumer-facing channels including the box a product comes in are becoming increasingly aligned.

This includes digital representations in which brands are looking to recreate the in-store shopping experience online. They want to do so quickly while also ensuring that all details consumers normally obtain from the packaging are accurately represented in the digital realm.

This is where a strong combination of packaging artwork systems, product information management, and artificial intelligence (AI) will enter the picture. Historically, developing packaging artwork has been a manual process of taking pack copy that’s normally kept in an unstructured form such as PDF (containing all that legalese and T&Cs) and blending with packaging designs and photography provided by creative teams.

This is not only time-consuming and, importantly, limited only to the physical packaging. However, this is exactly the sort of process where packaging artwork systems excel. On-pack information can be properly structured in the packaging artwork development process – and when blended with other product information can be used across digital channels at the press of a button.

AI lends a hand in this process by automating the consistent application of the same content to multiple products, spotting errors, and managing each iteration.

With the increasing abilities of generative AI imagery, soon we might even see it creating every package across a line of products, from the pepperoni pizza to the cheese lovers’ to the Hawaiian.

When it comes to ecommerce specifically, making a product stand out among its 20-30 peers on an online marketplace means optimized images that often include packaging, particularly close-ups of those sections that highlight a key product claim. This is also likely to standardize over time and include sustainability and recyclability details, which again will benefit from AI automation.

It’s about optimization, not overhaul; digital tools can make it happen.

Data will improve sourcing and recycling.

It is in areas like recycling and composting where digital transformation can have immediate value. Corporations have stringent sustainability targets that require them to rationalize their packaging — learning where to source alternative materials and how to best plan for the future. It’s about optimization, not overhaul; digital tools can make it happen.

Assessing recyclability across various markets is a complex task due to the vast array of potential combinations and configurations of packaging components with billions of possibilities. Digital automation can give the right answer at the push of a button.

In addition, brands are dealing with challenges ranging from container-deposit legislation (e.g., “bottle bills”) to weeks of delays in getting responses from end-of-life labeling organizations regarding the recyclability of a new package — which could lead to inconsistent responses because of incomplete data and human error.

Anything that alleviates manual checking and other menial tasks and ensures end-of-life labeling consistency when faced with the same mix of components is bound to help. This is where digital transformation is creating real value, and the fact that so much of the packaging sector’s activity is already underpinned by data is an excellent start.

About the Author(s)

Robert Quigley

technology director at package consultancy Aura

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