What Is Connected Packaging? Everything You Need to Know

noissue Recyclable Custom Die-Cut Sticker Roll with Tapkit custom QR code by @shopsaikah

Brand marketing today is an ever-evolving field. It's always innovating and ever influenced by the latest technology to boost impact. And it's helping brands stay ahead of the curve and engage more meaningfully with consumers.

As with every other part of our life, technology has been the driver of that change. Through the internet of things (IoT), the staple of brand marketing — packaging — has taken on digital qualities. It's a critical part of the product delivery system — a way to reach consumers on their terms, delivering an entirely new brand experience.

In a study by Accenture, 77% of chief experience officers stated their intentions to "fundamentally change" how they interact and engage with their target audience. Packaging is one way they see a possibility to differentiate themselves in the customer experience.

That's where connected packaging comes in.

What is connected packaging?

In an increasingly digital world, connected packaging provides a way for brands to connect with consumers more meaningfully. By incorporating functionality such as NFC tags, QR codes, RFID chips, or image recognition, connected packaging allows consumers to access digital content that enhances the brand value and product experience.

The applications of these are really only limited by imagination. Some obvious examples include product information, nutritional data, how-to guides, and even interactive games. But this can extend much further.

In the same report by Accenture, they found some stand-out case studies. A multi-national winemaker used augmented reality (AR) to animate bottle labels. This boosted sales by 77%. A cereal producer introduced QR codes that gave visually impaired customers access to product and nutrition information via their smartphone camera — saving the torture of trying to read tiny product information labels.

These examples go above and beyond, but even simple connected packaging applications, like further information, create a big consumer impact. They help to build rapport. Customers want to make better decisions, and access to further information lets them do that.

The technology behind these solutions are:

QR codes

A QR code is a two-dimensional barcode that can be scanned with a smartphone to access digital experiences. QR codes can be used to provide links to websites, videos, or other digital content. They are a convenient way for brands to offer additional content to their consumers without taking up valuable space on the product packaging.

NFC tags

NFC tags are small chips that can be embedded in product packaging. NFC-enabled smartphones can be used to read the information stored on the tag. This allows brands to provide consumers access to digital content such as websites, videos, or coupons.

RFID chips

RFID chips are tiny chips that can be embedded in product packaging. They store information that an RFID reader can read. Brands can use this to provide consumers with information or track products through the supply chain.

What are the benefits of connected packaging?

There are many benefits of connected packaging for both brands and consumers.

For brands, connected packaging provides a way to track products throughout the supply chain and collect data about how consumers interact with the products. This data can be used to improve the product and packaging and inform marketing strategy.

It also impacts sales. Remember the Accenture report referencing the winemaker that animated its bottles with an augmented reality experience and boosted sales by 77%? Unique customer experiences drive sales.

On the consumer side, as mentioned above, connected packaging provides a way to get more product information, which can help them make better purchasing decisions. This enhances the customer experience by providing additional content that adds value to the product.

Customers want more personalized, relevant experiences from the brands they interact with. By tracking customer data (including purchase history, geolocation, and other personal information), businesses can create targeted marketing campaigns tailored specifically to those who love the product.

Connected packaging vs. smart packaging

While these two concepts are often discussed together, they are quite different. They are both innovative, tech-enhanced packaging solutions, but they are not the same.

Smart packaging

Smart packaging refers to packaging designed to extend a product's shelf-life or improve its safety. This can be done in a number of ways, such as using sensors to monitor environmental conditions or adding time-temperature indicators (TTIs) that change color to indicate whether a product has been exposed to conditions that would make it unsafe to consume.

Smart packaging applies best to CPG brands, for e.g., food and beverage products, where shelf-life and food safety are of the utmost importance.

Under the smart packaging umbrella is intelligent packaging, which also applies to more practical solutions. Not digital (connected) applications.

Connected packaging

Connected packaging, on the other hand, is all about providing a better experience for consumers. It incorporates technology like NFC tags, QR codes, or RFID chips to provide consumers with additional content or experiences. As mentioned above, this can be anything from product information to interactive games.

Connected packaging applies best to consumer products, focusing on providing a better customer experience. Coca-Cola, for example, uses connected packaging to tap into new consumer demographics and track products through its supply chain.

While smart packaging and connected packaging have different applications, they can be and often are used together. For example, a food product might use smart packaging to extend its shelf-life and connected packaging to provide additional information to consumers.

6 ways to use connected packaging

Now that we've covered what connected packaging is and its benefits, let's take a look at some of the ways brands can use it.

1. Provide product information

One of the simplest and most common ways to use connected packaging is to provide additional information about the product. This can be done using a QR code or NFC tag that, when scanned, takes the consumer to a landing page with more information. As this landing page is online, brands can update product information in real-time — no need to update the packaging design.

This is a great way to provide consumers with additional content that they might not be able to get from the packaging itself. For example, a food brand might use this method to provide nutritional or allergen information. Or, a beauty brand might use it to provide a tutorial on how to use the product.

2. Enhance the customer experience

Another common way to use connected packaging is to enhance the customer experience. This can be done in many ways, such as providing access to exclusive content, discounts, or loyalty programs. One way may be to lead consumers to an eCommerce site to claim a product or discount.

For example, L'Oreal uses connected packaging for several solutions. QR codes are used to offer consumers in-depth product information to help them make more informed purchasing decisions.

They use serialized QR codes to track each product's movements. But the most interesting experience-enhancing applications are the exclusive tutorials and virtual tests, accessible to customers with just a quick QR code scan. Post-pandemic, virtual experiences provide a safe way for consumers to access solutions they love, without the risk.

3. Increase brand engagement

Connected packaging can also be used to increase brand engagement. This is often done by incorporating interactive elements, such as games or quizzes. It could also drive consumers to the brand's social media pages, where they can engage.

Tetra Pak is an excellent example of incorporating gamification into the connected experience to help drive and track its sustainability. Using QR codes, they introduced customers to engaging games that subtly served to inform players about their sustainability initiatives. They could then track how many people played and clicked through to their website to learn more.

Another way to increase consumer engagement with the brand is to use connected packaging to introduce augmented reality (AR) experiences. This can be done using a QR code or NFC tag that, when scanned, triggers an AR experience.

There are many fun sales-focused AR examples, but one environmentally-conscious initiative came from haircare brand Herbal Essence. Wanting to educate and influence consumer behavior regarding plastic waste, Herbal Essence made an AR experience that brought to life an interactive beachscape. Within the AR experience was an informative video that educated consumers about plastic waste and how to combat it.

4. Track products through the supply chain

Connected packaging can also be used to track products through the supply chain. This is done using RFID chips or QR codes that are scanned at each stage of the journey, from production to distribution to retail.

This type of tracking is often used for food and beverage products, where it's important to be able to track the product in case of a recall. But it can also be used for other products, such as electronics or clothing.

5. Collect data about consumers

Finally, connected experiences can be used to collect data about consumers. This is done by tracking how often the QR code or NFC tag is scanned and where and when it's being scanned.

This data can be used to understand consumer behavior and preferences, as well as to tailor marketing campaigns. The more data gathered, the more tailored these customer experiences can be.

6. Reduce counterfeiting

By incorporating unique identifiers in the QR codes or NFC tags, brands can reduce counterfeiting. Users will be able to scan the packaging to verify its authenticity, and brands can track the product.

This is particularly important for luxury brands, where counterfeiting is a big problem. But it's also important for any brand that wants to protect its customers from fake products.

Dos and don'ts of connected packaging

While we strongly advocate that all brands consider connected packaging, it's always important to ensure you know how to implement these solutions well. Consumers see through attempts to simply add new marketing tactics for the gain of the brand.

Do use connected packaging to:

• Improve the customer experience. Make the customer experience more informative, engaging, and convenient.
• Increase brand engagement. Make your brand more interactive, fun, and engaging.
• Track products through the supply chain. Making sure your products are safe and of the highest quality.
• Collect data about consumers. Improve your marketing efforts and customer experience.

Don't use connected packaging to:

• Force consumers to download a new app. Make sure you're providing value for the consumer and not just adding another app for them to download and forget.
• Interrupt the customer experience. Make sure your connected packaging doesn't interfere with how the consumer normally uses your product.
• Collect data without providing value. If you're going to collect data, make sure you're using it to improve the user experience in some way.

🎁 Wrapping it up

Connected packaging is a powerful tool that can be used to improve the customer experience, increase brand awareness and engagement, track products through the supply chain, and collect data about consumers. All of these lead to better brand loyalty and sales.

When used correctly, connected packaging can provide a wealth of benefits for both brands and consumers. But it's important to make sure that you're using it in a way that provides value for the consumer and doesn't interrupt their experience. Connected packaging is a value add, not a means to take.

If you're considering connected packaging for your brand, check out noissue’s customizable, QR code-compatible, and sustainable packaging solutions for customer experiences that wow.