What is smart packaging? It can take a couple of forms, but both kinds interact with the contents of the packaging and with the customer. The construction of the packaging can include certain barriers that extend the life of the products or indicate spoilage or warn consumers when a product is close to its sell-past date. Smart packaging also allows customers to interact with the products, using various technologies that a customer can use to find out more about ingredients in perishable goods or advice on how to best use the products, such as recipes or beauty tips. Smart packaging also helps with brand differentiation.
The Growth Stages of Smart Packaging
Smart packaging has been used in pharmaceuticals to help prevent accidental overdose and monitor the schedule of the medications. The spoilage prevention used for foodstuffs can also help with the freshness of medication. While smart packaging is still in the growth stages, the pharmaceutical and alcoholic beverage markets have been growing strong.
In the cases of certain alcohol brands, such as Johnnie Walker Scotch and Absolut Vodka, a scannable RFID code verifies the authenticity of the brand, preventing fraudulent production and reassuring buyers that these brands protect the quality of their product. This boosts customer trust in the brand and adds to brand differentiation in a large market. The increased engagement between consumer and brand build a brand’s relationship and encourages brand loyalty.
Customers have even more options when it comes to buying consumer goods, and brands need to elevate their strategy to build engagement and encourage customers to interact with the brand. Many do this through social media, but with smart packaging, taking the initiative for engaging with the brand is from the customer, not the brand.
Why should CPG brands adopt smart packaging?
The benefits for Consumer Package Goods (CPG) brands to make the switch to smart packaging are numerous, and, when the packaging dovetails with the overall brand differentiation for the item, can increase repeat customers and encourage new buyers.
Greater Customer Engagement
Smart packaging communicates with the customer, providing additional informational content, entertains and evokes emotional engagement, and instructs and informs the customer about the brand’s origins, the ingredients for food or beverages, or other interesting facts about the brand. Building engagement between brands and customers increases the affinity that customers have about the brand, and learning more “fun facts” about the brand may encourage customers to share information about the brand, becoming a de facto brand ambassador.
Some brands, such as Kellog’s, LEGO, Cadbury, and Nestle, use Augmented Reality to build engagement. Augmented reality allows a customer to sample the product – virtually – before committing to purchase. Competition between brands is becoming tighter and the ease with which customers can find alternatives is increasing. Making it easier for customers to purchase by overcoming objections about whether or not they’ll like it, whether the item of clothing or make up will look good on them, or by providing additional information to encourage a purchase, is a strong benefit geared to increase customer satisfaction with their purchase.
Revealing Product Usage
Smart packaging connects to the cloud, sharing product usage data with manufacturers. This includes when the package was opened for the first time, when it’s opened and closed subsequently, where and how often it’s used, and more. Many brands don’t have real-time access to usage data. Understanding how customers use the product is a real game changer for CPG brands. It can help them add additional features to the existing product line or develop new products that enhance the customers’ lives.
Smoother User Experience
Smart packaging makes the product easier to use, with clear instructions and even allows users access to an online chat option, for specific questions. The instructions that customers can access can be more comprehensive than what can be printed on the package, and, again, customers willingly engage with the brand, versus the passive interaction that a printed message on the packaging has. The process of using the product from delivery to preparation and down to disposal is transparent.
Smart packaging can also help customers with regular replenishment, cutting down on the need to manually create a list and shop for commonly, frequently used items. Amazon Dash Replenishment Service is a good example of this. Using this service, Amazon subscribers have certain supplies automatically refilled as supplies run low.
Smart packaging is still in the nascent state, although it has unlimited potential. Creative and innovative brands have the opportunity to tap a ripe market and leverage all the benefits of brand marketing. Exploring the best use of smart packaging enables companies to increase brand loyalty, increase sales, build brand reputation, and differentiate their brand from the competition.