It started tentatively in 2016, when brands such as Malibu and Kraft enabled consumers to scan bottles of rum and packets of cheese with their smartphones to access free online content including recipes, coupons and games offering prizes. But it’s taken the Covid crisis – which has prompted the unexpected resurgence of the QR code – for connected packaging to take off in a big way.
Technological advances have made the process of accessing online content – via QR codes, near-field communication (NFC) tags or even augmented-reality filters – more straightforward for users. As consumers try out the tech in greater numbers, it’s encouraging brands to offer richer material to engage them, build customer loyalty and obtain useful marketing data.
Such factors have led packaging consultancy Experience is Everything to forecast that the global market for connected packaging will be worth $20bn by 2025.
Smart packaging and brand value
Research published by McKinsey in April 2020 suggests that consumers are seeking more personalised interactions with the brands they buy.
Its findings are no surprise to Ian Kelly, who leads Reckitt’s work on connected packaging and has been helping to introduce QR codes on several of the company’s household brands, starting with Air Wick. He believes that its customers want to understand more about the products they buy and are eager for more dynamic engagement experiences.
“An always-on, mobile-friendly content approach is where they want their products to be,” Kelly says.
The Covid lockdowns have accelerated the digital transformation that was already occurring in the UK before the pandemic. For instance, many people have become accustomed to scanning QR codes when using the NHS Covid-19 contact-tracing app to enter a range of venues under lockdown restrictions.
The pandemic has also put a premium on trustworthiness. For instance, a consumer survey by retail software provider Brightpearl in February found that 24% of respondents had been “let down” by an online order since the start of the Covid crisis, leading many to have a “crisis of confidence” in the retailers responsible.
“In times of crisis, customers want to go to places that they know and trust,” Kelly says. “For brands, connected packaging is a way of both garnering and demonstrating trust through the scan experience. This is about transparency, enabling consumers to find things out about you.”
Kelly believes that brands that don’t adopt connected packaging could eventually come to be seen by consumers as overly secretive. “I think we’ll get to a point where a product will potentially be treated with suspicion if it lacks smart packaging,” he predicts.
Smart packaging and sustainability
Research published in May by the Institute of Customer Service found that environmental sustainability has become the main factor influencing the purchasing choices of 18% of UK consumers. The study predicts that this could rise to 55% in the next five years.
It’s no wonder, then, that brands are using smart packaging to demonstrate their ethical credentials to eco-conscious consumers seeking information about the total carbon footprint created by products’ supply chains. Napolina, for instance, has worked with specialist software provider Provenance to enable customers to scan a QR code on its tomato tins to track how the food has found its way into their hands from Italy.
I think we’ll get to a point where a product will potentially be treated with suspicion if it lacks smart packaging
Paul Williams is head of ethical trading and human rights at Princes Group, which owns Napolina. He believes that this facility, showing the environmental “impact and journey of our tinned tomatoes, from farming cooperatives to supermarket shelves”, will help to increase trust in the brand among consumers.
Connected packaging is also finding greater use in medicine, where it can contribute to improved patient outcomes and even reduce healthcare costs.
The Jones Healthcare Group, a Canadian packaging company serving a range of health and wellness brands, started offering them NFC-based smart solutions in October 2020. The firm’s manager of marketing development, Andrew Wong, says that patients on prescribed medication can use the facility to keep track of their consumption.
“Combining this information with medication schedules, we can send reminders to the patients if they forget a dose,” he says. “The pharmacist can also view a patient’s adherence history and proactively work with that individual to improve outcomes.”
Given that Google has announced plans to stop supporting third-party tracking cookies on its Chrome web browser by 2022 (following similar decisions by Apple and Mozilla on Safari and Firefox respectively), interacting directly with customers via smart packaging tech will soon be the only sure way to obtain insights from them, according to Kelly.
But consumers are becoming more guarded about sharing information with businesses, according to research by McKinsey. Data acquisition is therefore something that brands need to treat sensitively to retain their customers’ confidence.
Napolina is treating its smart packaging initiative as an exercise in demonstrating transparency to consumers, rather than gathering data from them, according to Williams. “We haven’t looked at this project on an ROI basis,” he stresses. “It’s all about building further consumer trust in the brand.”
The future for smart additions to packaging
Although its applications have expanded significantly since it made its debut, smart packaging seems to have a way to go before it matures as a technology. But some experts believe that it could have a limited shelf life.
Iina-Maija Ikonen is a researcher and lecturer in marketing, business and society at the University of Bath. She believes that there’s a danger that brands will use smart packaging for unsuitable purposes and so risk alienating a proportion of their customers.
“It should always be done so that it fits the brand well,” she warns.
But perhaps the biggest weakness with connected packaging is that most consumers simply don’t have the time to bother interacting this way, especially in the case of food and drink brands, Ikonen suggests.
“The difficulty is that there’s a lot of information on the package that people just don’t look at,” she explains. “When we buy food, most of us spend just a few minutes on that process. Working with a QR code or NFC chip, even though these are easy to use, is still an extra step for consumers to take.”
Despite these caveats, connected packaging – if used judiciously – has the potential to bring brands and consumers closer together. In an era when transparency and trust are at a premium, such engagement will surely benefit both parties.
