Connective technologies lead packaging into the digital future

23 Jul 2018 --- Connected Packaging and the Internet of Things (IoT) has opened up a world of possibilities for brands to communicate with their customers in more engaging and proactive ways. Brand owners are beginning to realize the massive potential of pioneering technologies such as Near-Field communication (NFC), QR codes, barcode scan and Augmented Reality (AR) in increasing brand loyalty and awareness and better understanding consumer behavior.

“Brands want to own their audiences, they want to learn more about how consumers are using their products and they want to look at their own media strategy and how they can optimize it,” the Founder of IoT agency SharpEnd, Cameron Worth, tells NutritionInsight. “Obviously when you make your products in the millions, this is a massively untapped source of consumer data and engagement.”

“Right now consumer awareness of what to engage with and why is still at an early stage, but the more brands that are coming to market with connected packaging programs the greater the consumer awareness of the technology will be and that is driving usage,” Worth says.

“In five years’ time, it’s going to be a very normal action to engage with packaging digitally in the same way its normal to tap your debit card on to a reader without using a pin. The same sort of normalization of behavior will occur interacting with products via your mobile,” he adds.

SharpEnd: Realizing the possibilities of NFC
London-based SharpEnd has enjoyed a string of successful trials, including collaborations with Malibu and Jameson Whiskey which culminated in the rollout of NFC-enabled bottles which can be “tapped” by Android smartphones to access exclusive competitions, prizes and additional content such as cocktail recipes.

Likewise, SharpEnd coordinated the project to launch Malibu’s “Coco-nect” cups in 2016, which UK consumers could access in order to remotely alert bar staff that they wanted a refill. Brand owner Pernod Ricard has since hired SharpEnd as their dedicated IoT agency, a first for an FMCG brand and one which gives a big signal of intent in terms of the future branding strategy for the alcohol giant.

“In Summer 2018 you’re going to see over half a million NFC-enabled bottles launched across different markets as part of the Malibu summer campaign,” says Worth. “Every bottle is carrying a unique identify NFC tag that’s integrated in the product packaging.”

“Malibu wants to activate their campaign and they are using the products as a touch point to offer additional value to customers, including cocktail recipes, ingredient information and how to enjoy the product in its best state. Pernod sees connected bottles as a global strategic opportunity,” he explains.

Is the public ready for connected packaging?
Within the sector of household goods, SharpEnd teamed with Mindshare to conduct a quantitative study of the attitudes of 1,000 UK smartphone users towards 10 connected product and packaging prototypes over a two week period. The findings of the “Everyday Connects” project suggest that the majority of consumers are ready and waiting to embrace connective technology:

• 64 percent of UK consumers are interested in the idea of everyday objects being connected to the internet.
• 62 percent find the idea of a product which alerts you or reorders itself when about to run out appealing.
• 58 percent find the idea of a product reminding you when it is about to reach its expiry date appealing.
• 62 percent agree that connected products can collect data if they get something of value in return.

The full report can be read here.

Unique digital identities: An oasis of consumer data
In June 2018, Crown Bevcan Europe & Middle East, a business unit of Crown Holdings, launched its CrownConnect technology in conjunction with FACT – an all-natural sparkling drink. Each can is marked with a 2D unique scannable code, making FACT beverage cans the first ever to be produced with unique digital identities, according to Crown.

Matt Twiss, Marketing and Business Development Director, Crown Bevcan Europe & Middle East, discusses the nature of the “Almond” blockchain technology with NutritionInsight:
“Details about the supply chain and ingredients are uploaded to the blockchain when the cans are filled. The Almond app reads each code, determines which set of blockchain data the can is related to and displays the correct information back to the consumer.”

“The link between the code and blockchain data is made through EVRYTHNG’s database. Once the information reaches the app, which already knows the identity of the user, it can then be tailored accordingly and offer the correct token reward,” he says.

Twiss believes that despite this being new territory, early indications suggest that there are many potential benefits:
“Brands can better understand consumer behavior since the platform enables them to distinguish between regular customers (those who drink a can per day), new customers (those scanning their first can) and those that are showing the can to friends and scanning the same can multiple times.”

“Brands can reward with different numbers of tokens to recognize certain behaviors. For example, the first reward can be set higher to drive re-purchase; brands may also decide to reward particularly loyal customers with something extra.”

“Along with the nearly limitless possibilities for consumer engagement, the codes can support anti-counterfeiting efforts and traceability. This is because after scanning the code, the app will only display the correct information if the can is genuine, giving consumers confidence about the quality and provenance of their drink,” he adds.

“Using this information in tandem with bespoke algorithms can enable brands to understand elements like the weather at the time of consumption, if any event was taking place (for example, a football match), if the person always drinks at the same place (at home) or elsewhere (on-the-go).”

“All of these insights should help brands deliver unique and customized experiences and offers back to consumers, which, in turn, should drive customer loyalty and re-purchase.”

“Finally, specific messages about topics like sustainability or promotion of a new flavor can be communicated directly to consumers at no extra cost,” Twiss concludes.

Digital evolutions within the grocery sector
Connected packaging technologies based on unique digital codes will also take both online and offline grocery in exciting new directions during the next few years, according to the Tetra Pak Index 2018.

“The key to this technology is digital printing, which makes it possible to print unique digital codes on each and every package,” Alexandre Carvalho, Global Marketing Services Director at Tetra Pak, tells NutritionInsight.

Carvalho pinpoints China and Korea as leaders of “disruptive innovation” in the grocery space. In China, for example, “… smart packaging with features that enable digital purchase and an enhanced consumer experience is highly regarded. It is also welcomed by retailers in the region as it allows them to experiment with new business models and payment methods.”

“In Saudi Arabia promotions are important, and also in the US where consumers are focused on saving money, with coupons and vouchers playing a key part of consumers choice of retailer.”

In terms of industry players, Amazon is highlighted as being a key player in the reinvention of physical retail, “both through its acquisition of Whole Foods and also its Amazon Go checkout-free concept store [which is] selling ready-to-eat foods, meal kits and grocery essentials, including its own brands, such as Wickedly Prime,” Carvaldo says.

“Similar moves are happening in China, which is setting the pace globally for omnichannel retail innovation. Alibaba first announced its ‘New Retail’ concept – integrating online, offline, logistics and data across a single value chain – back in 2016,” he adds.

SmartLabel: Enabling product information transparency
More than 7 in 10 shoppers want to find out more about the grocery products they buy than they are currently able to get with traditional on-package labels, according to a new US survey.

Roger Lowe, Executive Vice President, Strategic Communications at GMI tells NutritionInsight: “SmartLabel is a way to meet the growing consumer demand for additional product information, more than could ever fit on a package label. And the digital access – via a QR code, an app or online – matches how today’s consumers are shopping and researching the products they buy and use.”

SmartLabel has already been adopted by many leading companies, including Unilever, Kelloggs, Coca-Cola and Procter & Gamble. “SmartLabel is already on nearly 28,000 food, beverage, personal care and household products, and projections are that it will continue to be added to more and more products in the months ahead. This is a huge increase from the 4,000 products at the beginning of 2017,” Lowe adds.

The future of connected packaging technologies
Connected packaging appears to be a natural progression for brands looking to create more intimate relationships with consumers in a digital world. Another recent innovation comes from the Talkin’ Things and Black Red Ale Beer collaboration which combined NFC with AR to create a “talking” skull which appears from the label when scanned, offering interactive dialogue with the consumer based on their present mood.

Technologies within connected packaging are evidently expanding and diversifying, but which will have the strongest future? According to Cameron Worth of SharpEnd, the answer is NFC:
“NFC right now is the dominant technology and I think the one with the brightest future. Both Apple and Android are carrying NFC capabilities within their handsets which is a good mark towards that.”

“In terms of where we will be in 10 years, I think that the cost of connected packaging will decrease so much that you will see the Unilevers and Nestlés, who have low priced goods with smaller profit margins, utilizing these technologies as standard,” he concludes.

By Joshua Poole