SHOULD YOU CONSIDER SMART PACKAGING?
New packaging technologies are offering an increasing number of ways for consumers to interact with brands, but it also requires a combination of specialized materials, science and technology. With smart packaging being such a hot topic, brands shouldn’t blindly follow the hype but they should make sure to actually create added value for their product.
Here are seven elements to consider before taking the plunge.
Before we start we would like to clarify that smart packaging consists of active packaging and intelligent packaging. Active packaging focuses on enhancing functionality, while intelligent packaging puts the focus on communication such as the packaged content’s status, or other messaging.
Active packaging has been used for years to prolong shelf life and quality but by reinventing packaging as a fully interactive customer engagement tool, the product and its packaging play a more active role in the lives of the consumer. Instead of having a simple functional relationship, packaging now provides a useful and valued service. This gives brands the power to change the way we interact with the product and influence our purchasing decision.
Additionally, by making everything smart, a lot of data can be generated on how and when we interact with the product. Not only do these insight provide a range of advantages for brands to stay relevant, but it also helps designers to identify unpleasent points in the customer experience and enables them to optimize product – and packaging design.
Many companies have clients globally. They want to reach consumers in individual countries, but also have a global recognizable brand. Smart technology can increase consumer interaction by offering a wealth of user content. By bringing products to life, you can micro-target consumers on shelves. This changes the way consumers interact and connect with the product and its packaging, enabling you to influence the customer’s buying decisions.
By scanning QR-codes or chips embedded in packaging, consumers could gain access to games, tutorial videos and details of complementary products. Meaning the consumers will engage with the product on a different level and this will give an incentive to buy your product rather than a cheaper alternative. The interaction with the product will be extended which will also build more brand loyalty and expand sales opportunities.
The changing way consumers interact with the product opens the doors to micro-target your audience. Imagine you would want to micro-target a mom, looking for breakfast for her family. Thanks to data you know that she needs to feed a family of four, has specific allergy restriction, and has two small children. Your product could then show that it fulfills all her demands. In addition, adding gamification would make the children excited for breakfast and could give that extra convincing push. You could then retarget the same family by reminding them they’re almost out of stock, or sending them easy-to-make recipes and exclusive content. The packaging will be seen as part of the overall product and not just a wasteful necessity. In addition, the smart package-generated big data will also give you, as a brand, more detailed insights in your your customers’ buying and consumption trends. This allows you to micro-target more effectively, to increase engagement and to drive repeat sales.
4. Track and trace
Track and Trace has existed for years, but smart packaging changes the rules of the game. Instead of a product being scanned at each checkpoint, the packaging becomes the source of the data. Enabling you to access real-time data at anytime, from any place and reducing any risk of losing the product “off-track”.
It is an intelligent development that both consumer and producer benefit from. Equipping the packaging with smart solutions provides consumer and producer with real time information about the products location, delivery routes and the products state. Numerous studies have shown that consumers are seeking more detailed information about the product; where it comes from and where it’s been, so they can be reassured the product is up to their standard. Plus, by empowering your customers with the ability to verify the authenticity of the product, you send out a strong message and protect yourself from counterfeiters.
5. Added value consumer
When deciding whether or not smart packaging is worth investing in, it is important to consider whether it would create an added value that lets consumers save time, save money, or provides support by making things easier. For example, a personalised in-store navigation that takes in account allergies and coupons or bonus points would play in to all three central requirements. Personalised tutorials would provide support, making sure the product is used to its fullest and automated re-orders would make life easier for the consumer while giving you a regular customer.
In addition to added value, you could play into trends. For example, rising health consciousness amongst consumers will be one of the most important sales factors during the forecast period from 2017 to 2025. Smart packaging could be a handy to build trust by using it as a tool to provide information about the use of the product, manufacturing details and the freshness or authenticity of the product. Although, smart packaging would make the product more expensive. Multiple studies show that consumers seem willing to pay an additional price for a packaging solution that adds value, especially in the food and beverage industries and pharmaceutical sectors.
6. Added value producer
With smart packaging a whole array of benefits also emerges for the producer. Intelligent applications can extend shelf life, improve safety and optimize communication. Simplified inspections, for example, with a NFC data logger that monitors temperature and freshness during transport, can increase the product quality, reduce waste and improve safety allowing producers to save tremendous time and costs. Additionally, intelligent packaging could communicate up-to-date information about the product, from expiration dates to dynamic repricing, which will result in less waste.
Moreover, by providing consumers with more information, you build trust, boost the brands image and reduce risks and costs associated with new product development. This will cut down lawsuit costs resulting from unsave, expired or counterfeit products.
When considering new developments, sustainability should also come into play. Meaning is the added intelligence reusable or recyclable? Is it easy to seperate the chip from the packaging and does it stop the packaging from being easily recyclable? Since the more basic and usually cheaper QR codes are printed on paper, it makes them easily recyclable. The more sophisticated products are often re-usable however, it is still a struggle to get these back once they reached the home of consumers. Moreover, they are often made out of a different material which can actually make it hard for the product or packaging to be recycled.
While brands do not have to jump at every new smart technology that comes out of the pipeline, when well applied, smart packaging can add unprecedented value. Therefore, they are wise to keep up with the evolving technology and be on the lookout for elements that make sense for their brand and product lines. The key is to analyze the data and insights smart technology provides and use it to optimize processes, products and packaging.