Connected Packaging is Changing the Business World

With the digital age, packaging has gone beyond protecting and preserving perishable goods, health and beauty items, household commodities, and so many other products. By harnessing various forms of technologies, businesses today are starting to engage and develop their own smart packaging measures as well as enhance consumer experience and engagement. Businesses are starting to recognize the importance of connected packaging in today’s world. In fact, its global market share is projected to reach $59 million in 2025, based on industry estimates. How exactly does connected packaging change the way business processes are done? Let’s count the ways.

How can businesses use connected packaging?

Interactive packaging is streamlining business processes and provides manufacturers with additional channels to exchange information with its consumers. These are the most common ways in which businesses today are using connected packaging: Real-time tracking of goods. With interactive packaging, it’s now possible to trace a product’s location in real-time. In some systems, commodity tracking can start in the production, instead of the traditional distribution process. Businesses can use connected packaging services to track an item, no matter at which stage the product is within the supply chain. More efficient inventory management: Businesses can now get rid of paper filing and delayed information access and exchange by using tools like smartphones, tablets, scanners, and other similar technology. By setting up a smart warehouse, supply chain and inventory management are automated, making the processes more efficient and less prone to human errors. In a smart warehouse, everything is interconnected, from the special scanners that read the codes on the product packaging, to the machines that assist humans in making everything work flawlessly. This allows for faster processing of goods from the time they were received, tagged, sorted, organized, and prepared for shipment. This also allows for easier tracking of inventory, where items that need to be replenished are identified at the earliest possible time. Issuing proof of authenticity. By adding unique codes on a product’s packaging, some designer brands can now assure their clients of purchasing only authentic products. The end-user can use the code to validate product authenticity and, in some cases, the manufacturer’s location, on the brand’s website, or from a downloadable app. Maintaining product integrity. Individual codes from the product likewise indicate that the item was not subjected to tampering, theft, unauthorized access, distribution, or use, among other anomalous transactions. Aside from end-users, stores and authorized distributors can check that the product is not counterfeit, protecting the brand’s reputation. Enhancing customer engagement. With connected packaging, customers can also access custom-made product-related content such as video tutorials, how-to blogs, and other types of useful content. This means businesses can communicate with their buyers in a more personal manner by providing information that’s meant to instruct, entertain, or address consumers’ pain points. This enhances the brand’s digital presence and allows it to reach a higher number of potential consumers. Some gaming companies use interactive packaging to level up the user experience by transforming traditional cards into digital games. By integrating technology in the cards themselves, companies can offer buyers to unlock new characters, upgrade their character’s superpowers, and access to more game boards. Promoting customer retention. Connected packaging can promote customer loyalty by integrating product collection offers in digital product inserts. To activate, a buyer runs the code through the site or an app that they need to download. Once the buyer purchases an item, businesses can offer another type of product that may interest the buyer. Improving customer service. Businesses can also use interactive packaging to make online (re) ordering and requests for repair and replacement easier for clients. Manufacturers can also make the product easier to use by offering online tutorials or show them the sites available for packaging disposal. Attracting new clients. With connected packaging, companies can now share digital content to customers, including free offers or giveaways that can be claimed when the buyer refers a friend to purchase a certain product. Interactive packaging makes it possible for buyers to upload their experiences with a certain product online, or tag their friends to increase brand awareness or as a form of ‘word of mouth.’ Offering digital promotions. Just like how digital marketing works in engaging potential users, manufacturers can use connected packaging to offer rewards to customers upon purchase of one product and (potentially) other products included in the whole product line. Providing exclusive content. Manufacturers can use connected packaging to relay exclusive content to their buyers that are not available for public consumption. This enhances customer experience and rewards the buyers with better content, making them come back for more. A known beauty brand included makeup tutorials exclusively for their customers in product inserts, increasing the time users spend on their website from an average of 30 seconds to seven minutes. Understanding consumer behaviour. By getting data for every consumers’ transaction, businesses can gain a better understanding of customer behaviour—where they shop, how often the buyer needs replenishment, which other products the consumer is interested in, and other similar information. This allows manufacturers to know in which stores their specific products are selling high, so they’re able to supply these stores with their best-selling items regularly. Helping the environment. With less paper produced and needed, connected packaging helps reduce the overall environmental footprint. In some instances, connected packaging items are easy to dispose of and can be reused or recycled.

What makes connected packaging work?

Connected packaging operates within the ecosystem of the internet of things (IoT). This technological buzzword refers to the consolidation of real-time analytics, systems, sensors, and other types of interactive tools to track, monitor, and collect data, as well as control, tangible objects. All these objects are capable of collecting and gathering information, allowing for two-way information exchange through the internet or other networks. An IoT device is connected to the internet through an IP network either through Ethernet—wireless or wired—or Bluetooth. Aside from artificial intelligence robots like Siri and Alexa, smartphones, smart cars, and smart homes are part of the IoT ecosystem, too. Interactive packaging uses a mechanism that is embedded in the packaging itself that initiates information gathering and transmission. There are many ways in which information exchange may be initiated. It can be activated by the user, such as when a consumer scans QR codes, taps their smartphone, or downloads and registers on an application. It can also be automatically activated depending on the manufacturers’ preference. For example, it can activate when a special scanner is used or when a consumer opens the package. The most common tools used to transmit wireless information include:

Radio Frequency Identification (RFID): Connected packaging embedded with RFID tags allows consumers to connect to cloud-based applications. Upon activation or scanning, consumers are directed to a cloud service that offers interesting information and content related to the product.

Near-Field Communication (NFC): The majority of smartphones can read and scan NFC tags, which in turn initiate mobile transactions.

Printed Codes: Printed patterns, such as bar codes, QR codes, and images are the most classic of these options. Manufacturers can integrate various functionalities into QR codes, in particular, making them useful in interactive packaging.