How Packaging Becomes an Unlikely Ally in the Digital Marketing World
Deeper, digital experiences are expected along the path to purchase. Brands are getting very clever with applying connected packaging technology with their marketing strategy.
Most simply, connected pack is the connection between a physical package and a digital experience. With a phone in-hand, connected packaging offers more information, or information that can be structured and searchable in a way that cannot be achieved with the limited space on-pack.
Connected packaging offers unique flexibility that is new to the market. It allows connection to many different experiences that might leverage user screens and augmented reality, or geo-fencing to offer location-based experiences.
Now brands can offer new, and better content to an audience that is guaranteed to be qualified. Insights to be gained through this technology include: how, when, and where consumers are using products.
What is SmartLabel’s role in connecting the physical pack to the digital marketing world?
With over 38,000 pages, SmartLabel is one of the largest connected package initiatives to date. At the ground level, SmartLabel is a website for each FMCG product that gives consumers a standardized structure on both desktop and mobile to find key product information.
This includes the information on the pack and much more, including:
- Ingredients statement
- Other information (sustainability statement, disclosures, etc.)
- Company/brand messages
The website can be created and owned by the CPGs, while retailers can create their own for private label offerings. In order to license the use of the platform and the SmartLabel brand mark, the Grocery Manufacturers Association (GMA) has established a set of standards and rules to guide the creation of the content. That way, the structure of the page is consistent regardless of company, industry, or product.
At an initiative level, SmartLabel is a transparency platform — meant to be a trustworthy source for product information. These webpages can be accessed in several ways: mobile search, CPG/retail websites, directed by a code on-package using barcodes and QR Codes or other code options like Digimarc’s watermark.
This is not the industry’s first attempt at aligning on transparency method, but it probably the first large-scale connected pack instance. That’s in part because 30 percent of SmartLabel pages have an actual code on pack to connect to. Connected pack transparency programs solve for two concerns: variant management and accessibility.
As it relates to variant management, there are several variants of a particular product in the market that have the same UPC code, but the products themselves require different information. When there is an actual code on-pack, bringing customers directly to the content allows for greater transparency.
On the topic of accessibility; navigating content is much easier by navigating a direct link from the package to a webpage. This is an intuitive and instantaneous customer experience.
Connected packaging is an important innovation for brand owners to consider. Don’t be left behind — agile marketing demands connected packaging! Are you ready to take your consumer experience to the next level?
4 Ways Connected Packaging Provides Operational and Shopper Benefits
The traditional package journey is quite complex, with many stops from manufacturing to the supply chain, in-store displays to consumer’s home, and recycling. Connected packaging is the new frontier where design and technology come together to improve consumer experiences and store operations.
Here are a few types of valuable content connected packaging can provide customers both in-store and at home:
- Brand-authenticated content
- Product recommendations / re-ordering
- Inspiration and how-to videos
- Product transparency information (SmartLabel or GMO disclosure)
- Social networks
- Corporate responsibility
Here is how connected packaging is broken down:
Active Packaging: allows consumers or computing devices to discover and engage with products for product content, inventory management, retail operations, and more.
EX: Image recognition, QR codes
Interactive Packaging: includes specialty substrates and technologically advanced materials that are capable of communicating information.
EX: temperature sensors, conductive inks
Intelligent Packaging: send and receive information for dynamic interaction with sensors across the supply chain.
EX: RFID, NFC
All three of these types can be characterized as the Internet of Things (IoT), with always on, 24/7 network capability.
Here are four ways connected packaging can provide operational and shopper benefits:
Improve supply chain.
During manufacturing, there might be three labels coming together on a product. How does the manufacturer ensure they are the right labels? Machine-vision cameras examine these components as they come together — scanning for what may be a single, small, data matrix code on the artwork. When the item cannot be scanned, the product may be kicked off the line to be destroyed, for which the manufacturer pays a disposal fee, or is moved to an area that requires manual handling.
For a large brand with many SKUs and components, the waste can run upwards to tens of millions of dollars or more. 79% of CPGs report negative consequences or inadequately label or mislabel products resulting to stopped shipments and loss of business. Every manufacturer knows its cost and waste and can determine the ROI of improved packaging accuracy fairly quickly. Improved supply chain is so compelling, it is a main driver of connected packaging.
What about blockchain?
Another type of supply chain is blockchain, which is a digital ledger tracking potentially every touchpoint of the product from source to sale. How do we validate the physical goods with a digital ledger? In a proactive approach, now is the ideal time for manufacturers to begin to look at how a connected package that is efficient and reliable can add more robustness to their supply chain implementations. By sharing the data, manufacturers also have insights about inventory and compliance.
Streamline retailer efficiency.
To perform an in-store inventory, retailers must remove the package from the shelf, scan the UPC code and replace the package on-shelf. Connected packaging can mitigate the speed of handling, and when applied to every product, every day, this adds up — reducing the cost of labor.
The number of items per minute scanned at checkout is a few retailer metrics for operational efficiency. Scanning more items per minute could result in less check-out lanes, which opens up more selling space for the store merchants and puts prime selling space at the front of the store.
In an attempt to gain scanning efficiency, some retailers are forcing brands to cover their packages with more UPC codes, which means brands are losing precious packaging real estate for their brand trust and marketing claims. However, when brands and retailers work together with more connected packaging solutions, these visual intrusions on packaging are not necessarily needed.
Communicate brand messages.
Through the shopper’s smartphone, connected packaging becomes a digital narrator for the brand — linking the shopper to all the brand messages in-aisle with minimal limitations or restraints to the packaging design. Not only in the aisle, the package can continue to communicate these messages once the product is purchased and can even deliver content based on geo-location. It’s only natural for packaging to act at the digital narrator since packaging is the most salient touchpoint between the brand and the consumer.
Connected packaging may also provide hidden ROI toward corporate initiatives, both that of manufacturers and retailers. Leading brands like Pepsico, Unilever, and P&G have publicized their high level efforts from sustainability development to health and well-being goals.
Better customer experience.
In a culture of high customer interaction, connected packaging can help alleviate time cashiers would traditionally spend stocking or scanning products, allowing more time to engage with the shopper — turning the cashiers into educators of the brand. The Net Promoter Score index shows the willingness of customers to recommend a company’s product or services to others and reflects the customer’s loyalty to the brand. When store staff create positive experiences throughout the customer journey, even through friendly greetings and product knowledge, customers are left feeling better about the brand.
In the past, customers have avoided the self-service checkout line due to a previous bad experience. Connected packaging helps to guide easy and fast checkout with minimal effort from the consumer. Long lines also contribute to lost revenue when consumers get frustrated and abandon their cart to take their business elsewhere. After walking out on a retailer, many customers won’t return.
There are marketing data gaps to be filled across the consumer experience journey — connected packaging can help answer the question of ROI.
- Drives high levels of engagement by targeting buyers/users
- Delivers a click through rate that dramatically exceeds digital category averages
- Impacts in the most time relevant way at the point of consumption
- Creates higher levels of brand engagement than other channels – at high return rates and greater depth
- Promotes increased purchase incentive engagement
- Is more creatively impactful than other channels
From inspiration and ideas for creating brand activation campaigns to increase loyalty, to delivering voluntary and mandatory product transparency content, connected packaging turns the brand into its own media network. This gives the brand greater control over the dollars spent and delivers greater efficiency in campaigns, and unified ecommerce, re-ordering, and one-to-one personalization.
The Hidden ROIs of the Connected Package
Connected packaging is the new frontier — bridging the analog world of print with digital capabilities throughout the supply chain and interconnected commerce.
Be sure to register now and tune in on Thursday, November 15, 2018 at 1 – 1:30PM ET.
Register now for: The Hidden ROIs of the Connected Package
In an era of interactivity where everyday objects communicate with us and each other, the Internet of Things (IoT) brings unprecedented automation and convenience for consumers, manufacturers and retailers.
About Larry Logan: Larry Logan enjoys more than 30 years of success in marketing and creativity, repeatedly developing brands that become industry leaders. He is currently the Chief Evangelist at Digimarc Corporation, the inventor of the imperceptible Digimarc Barcode identifier for all types of media. Larry works closely with leading CPGs and retailers on creative solutions with connected packaging, and leads the company’s efforts in demonstrating benefits of Digimarc Barcode for SmartLabel® and Bio-Engineering product transparency disclosures without the need for the imposition of additional 2D codes on packaging. He is the recipient of more than 100 Gold- and Platinum-certified records in entertainment industry marketing campaigns. The World Brand Congress recently named him among the 100 Most Influential Global Marketing Leaders.
Connected Experience Design: A Central Pillar to Transforming Your Marketing Strategy
This blog post has been contributed by Eric Schultz, VP, Business Development, SGK.
In many cases, brands have failed to deliver valuable or relevant experiences. Often, we have seen technology implemented because it was possible, rather to solve a genuine consumer or brand challenge.
There have been some false starts and over the last few years. Smart packaging has relied on QR codes and simple AR gimmicks, while consumers lacked the apps and were often not sufficiently motivated to engage.
Now, we’re seeing the transition from basic connected packs to intelligent, media-enhanced packaging.
Below, we offer three key characteristics of successful connected experience design:
Interactive. It’s key for successful brands and retailers to make their experiences engaging, interactive, and shareable. We’ve seen a clear opportunity in the beauty market with the increase in beauty video guides and subscription services.
In fact, according to a recent MindShare study, 54 percent of women would like to access cosmetic tutorials via smart packaging. While retailers like Sephora have dominated the “trial” POS model, others are still racing to catch up.
Informative. Another area of opportunity occurs in the grocery aisle — or in your household refrigerator, where more consumers express an interest in packs that send alerts when expiry is near. With the trend towards more sustainable living and less waste, consumers feel safe with the products they buy when transparency and proof are prevalent.
In kitchens, a proliferation of foodstuffs with digital packaging will create a hub of product information that can be tracked by smart fridges or scanners added to fridges/cupboards. Trust is a huge driving factor of purchases, and brands must be as clear as possible to align with consumer actions, beliefs, and morals.
Incredible. While consumers continue to crave more information than what appears on pack, connected brand experiences lead to endless options for brands. But consumers aren’t willing the blindly advocate for a brand that does not offer a feeling of pride.
Brands have started directing the shopper to interactive social pages to engage on different platforms. Consider the opportunity to leverage Snapchat filters and Instagram Stories to promote things like online recipes, line extension coupons, and giveaways.
There are billions of physical assets you control and own. Generating data and connecting directly with your consumers to deliver relevant experiences is key, but none of the effort will matter if the experience is not incredible.
Here are 9 ways to increase consumer engagement with connected experience design:
1. Make your product mobile
We’ve seen great strides in the food and beverage sector, specifically in creating structural packaging innovations to cater to the ever-growing mobility of consumers.
Products like snack bars sealed by biodegradable wrappers, drinkable yogurt with peel-off lids, and juice pouches for easy sipping offer the convenience modern lifestyles require. In a digital perspective, thinking mobile means linking the brand experience acorss all touchpoints — from social media to packaging. Consistency is crucial.
2. Embrace connected packaging technology
Imbued with sensors and connectivity through QR codes, virtual reality or augmented reality technology, connected packaging will be multifunctional and potentially offer a key product component.
These new data streams help brands cater efficiently and effectively to their consumers — allowing an unprecedented expansion of the measurement of brand and product usage across the consumer experience.
3. Encourage product upgrades
Nobody wants to experience FoMo! “Freemium” and trial offers are great ways to introduce your users to new features of a product only accessed when upgraded.
Oftentimes successful with a subscription model, this technique can be used to offer up great deals or exclusive access. Another tactic might include a credit system, which works up to a paid version, or in Spotify’s case, a version of “adless” music play. Through connected packaging technology, brands can offer upgrades directly on pack!
4. Maximize impact across categories
According to a recent Bain & Company analysis of buying habits among 100,000 shoppers across the globe, “the best way brands can grow over the long term is to grow their numbers of buyer.” This sounds pretty obvious, right?
While brands typically target well-segmented groups of shopper to become loyal brand ambassadors and avid purchasers, brands should pivot this way a thinking by increasing household penetration.
Dollar Shave Club has moved from simply providing razor blades, to adding a full range of premium grooming products — even adding oral care and haircare products to their line-up.
Oftentimes, brands make the mistake of limiting users to a narrow subset — often contained in the strict boundaries of their product sub-category. For many brands, this leaves room for a lot of untapped potential and growth.
5. Create highly personalized experiences
The old approach of packaging design — visual attraction, powerful emotion, and relevant narration — has moved more toward digital connection and personalized interaction.
Beauty subscription brand, Ipsy, allows users to create personalised profiles to indicate product preferences. While preferences change, users can update their information as they see fit — a great example of data being used in a way that directly benefits the user.
With an updated PEO (paid, earned, owned) media model, the new creative technologies of VR and AR and beyond will add stimulating new opportunities for brands to engage in a more personalized way.
6. Innovate or be left behind
By monitoring conversations around competitors’ products, brands can use data-driven insights to help develop better product features or address repeated frustrations.
By constantly innovating products, brands can provide contiuous value while avoiding the risk of bored or fatigued consumers.
7. Leverage social causes
Many brands turn to cause-related marketing to establish shared values with their consumers. While campaign types vary, committing to a social cause may be a great purchase driver for consumers.
A few campaign types outlined below:
- Point of Sale
- Portion of Purchase
- 100% of Sales
- Buy One Give One
- Matching Gifts
- Proud Supporter
For example, Soapbox Soaps operates as a “buy one, give one” model — with each purchase of a bar of their soap, one is donated to a community in need.
8. Form smart partnerships
We’ve seen many interesting partnerships in the retail space — all enhanced by the use of technology.
Amazon recently partnered with Kohl’s to use the department store as a drop-off center for consumers looking to return products bought on Amazon. The pilot program also includes retail space for Amazon’s technology products, like Alexa to increase purchases.
Retailers are experiencing great gains through these partnerships — think about the potential of connecting your packaging with a service like Shazam!
9. Use data to evolve
According to a survey conducted by YouGov, consumers are willing to share personal data (email, age, location, etc.) for tangible benefits.
“Nearly half (43 percent) of the more than 1,000 consumers surveyed agreed that they would exchange personal data with companies to save money through personalized promotions, discounts or deals, followed by 39 percent looking for speedier issue resolution.”
This value exchange is accompanied by a stronger need for personalised experiences. With more, and often times more personal data being shared with brands, there is greater pressure for brands to exceed user and consumer expectations.
With this openness to share, initiatives like the General Data Protection Regulation (GDPR) have been put in place in an effort to set a standard of how companies handle our personal data.
The new GDPR rules give users the right to access the data a given company has about them, and what it’s used for. As a consumer, you may also request to know if your data has been shared with any outside groups or lists, and in some situations, this personal data can be erased.
Still, many consumers will continue to share their personal data with brands and organizations. In fact, GDPR is just one way B2B and B2C marketers can deliver what consumers really want: tailored customer journeys.
There is cleary a unique opportunity to re-value packaging, but with so many options, where do you start? Brand pride is delivered through our I-D-E-A process — here is how it breaks down:
Inspire insight + innovation: We use strategic tools to provide insight and innovation to inform and challenge the brief.
Define brand strategy design + visualizing: This is where brand strategy, design strategy and content generation occurs. Here, there’s also room for design development and iterative prototyping.
Evaluate + validate with consumers: To ensure success of a product launch, we gather expert panels to conduct insight workshops and shop along interviews.
Activate, optimize + produce: This final step includes technical specifications and visualization to deploy the approved launch materials.
Are you ready to embrace the future of connected packaging? Visit The Internet of Packaging Group to join the conversation!
About Eric Schultz: Eric is responsible for driving business development initiatives across consumer packaged goods (CPGs), retail and healthcare sectors in the Americas to deliver strategic brand solutions designed to drive brand performance, to marketers on a global, regional and local level. With a proven track record of bringing innovations to market, Eric is uniquely experienced in bringing great design to the masses. With 18+ years experience in product development, innovation and brand building by collaborating with agencies, suppliers, converters and CPGs, his unique pedigree mixes strategic design thinking, creative discipline and tactical know-how.