It’s all about boxes with more information, safety, convenience and influence
At its core, packaging serves to preserve, protect, and provide information about its contents. However, packaging must contend with the pressures of commerce: limited shelf space, finite design area, accessibility and environmental considerations, consumer experience, and other factors that play a role in whether the package is both functional and effective as a marketing vehicle. This is where smart packaging has an impact.
While members of our industry have an understanding of what falls under the umbrella of smart packaging, our grasp of its potential, customer readiness and how to sell it are where the conversation tends to stagnate. The danger is that one can fall into the trap of seeing its novelty appeal and not the scope of its capabilities.
Although smart packaging can include using different substrates, inks, and finishes it also means “thinking outside the box” and turning the package into an interactive platform. James Lee, director of technology and innovation at Jones Packaging in London, ON, and the council co-chair of intelliPACK, a collaboration between intelliFLEX and PAC (Packaging Consortium) explained, “the idea is that active packaging does more. It actively tries to do more than the standard, preserve, protect, and provide information that packaging offers…whereas intelligent packaging for us is where we’re integrating some level of electronic or digital type of interactivity into a package.” Interactivity can be used for marketing purposes so that products on the store shelf can communicate with consumers, for promotion, brand protection and to fight product tampering, counterfeiting, and theft. These applications can affect players from all corners of the packaging value chain.
High-end market segments lead adoption
According to Peter Kallai, president and CEO of intelliFLEX, a not-for-profit industry alliance that promotes the growth of the flexible and hybrid electronics sector, the four main categories where smart packaging is growing are: the pharmaceutical industry, the wine, spirits, and liquor industry, the cosmetic industry, and luxury product packaging. These high-end market segments have shown an interest in using a combination of intelligent packaging technologies, not merely for differentiation as a marketing tactic to impress customers, but also for the knowledge they can impart to customers, and the information they can record and share with every member of the supply chain.
First, the way a product is packaged (from the first advert, to the packaging on the shelf, to how society perceives it), affects whether or not the shopper gravitates towards a product. Lee and Kallai both share the sentiment that “if we can get people to actively interact with packages they tend to buy them.” In an increasingly competitive sales arena, interactivity is one way to instigate that conversion.
Lee pointed out one of the key ways to differentiate a package is to provide information. “We’re also finding now that more and more products are requiring education to consume and intelligent packaging virtually expands the real estate of a package.” Luminer, a leader in US packaging and converting, found in in a study last year that 60% of shoppers were unlikely to buy a product when the label doesn’t provide enough information. As Kallai added, “the consumer is asking for information. Many shoppers wish to check against public opinion on the internet. And that takes an awful lot of steps if done themselves. And within that search the actual brand owner doesn’t feature into the conversation.” Omnichannel connectivity allows brands to speak directly to customers in order to generate excitement and awareness; plus, they can measure these interactions and gain valuable consumer insights.
Second, the integration of electronics, such as NFC, into intelligent packaging not only allows a package to be tracked and monitored but it also adds the consumer to the supply chain. Kallai explained that when products are produced and put in stores, brand owners have no way of knowing the customer’s interaction with the product at the point of purchase – they only know if it sold, not why.
The buying cycle doesn’t have to end when the customer leaves the store. After purchase, smart packaging can continue to share valuable information. Lee and Kallai both said that pharmaceutical companies, in particular, are seeing the benefit of intelligent packaging from a compliance perspective; where the package can notify friends or family whether a patient has taken their medication. For Lee, this type of packaging proves he is not just filling a landfill but making a meaningful impact. There is a real return on investment when a package can tell a global organization how the consumer interacted with it; the object stops being just a vessel and becomes an asset to both the brand and customer.
Consumers’ tech savviness paves the way
From the print perspective, there are many technologies that are finally mature enough to scale. Printable conductive inks and flexible LCD displays, to name a few, have reached the point where they can begin to be economically introduced into production lines. But while these technologies may be ready, it will all be for naught if consumers are not prepared to interact with the package.
When QR codes and augmented reality (AR) were first introduced, both innovations seemed to peak then decline. Lee pointed out that many people didn’t understand how these technologies worked. It’s only recently that a shift has occurred where people actually know—and want to know—what certain innovations do. Coincidently, with the proliferation of smartphones information is literally at any consumer’s fingertips. According to Statistics Canada, 76% of Canadians owned a smartphone in 2016. Most telling was that 59% of Canadians aged 15 and older reported life was better as a result of their technology use in 2016. Marketing teams now have the opportunity to reintroduce these intelligent packaging innovations to an audience with hindsight, planning, and customers that understand and can access these technologies and are better equipped to answer calls to action.
Sustainability demands on the rise
In an era of socially conscious customers, there is a growing scrutiny of packaging’s design and substrate choices. When asked about the possible growth in accessible design, given new laws such as the Accessibility for Ontarians with Disabilities Act, Kallai and Lee both admitted not much had changed in regard to packaging. Kallai said, “I don’t think they understand the benefits…none of the regulators are coming to our meetings to explore it,” while for Lee he admits there is a lot of potential. “Imagine if one could tap on an NFC and get video or audio about the package and its contents.” This is an untapped area of smart packaging that needs to be explored.
However, both have noticed there is a drive to make packaging sustainable. Kallai pointed out brands are being pressured to be socially and environmentally responsible, but when they reconcile those responsibilities with smart packaging it changes how they consider its benefits. For example, the viability of integrating electronics into packaging as those components can be difficult to recycle. The need to be green is an ongoing concern for intelliPACK. Their subcommittee, of multiple members of the packaging value chain, are trying to, as Lee put it, “figure out how…we do this stuff without hurting the environment. But right now, there are a lot of question marks in the industry.” Either way, Kallai emphasizes that this work and its contributions are putting Canada on the map.
For printers, focus on adding value
There are many ways to incorporate smart packaging into a product; in some cases when you have the right customer the sky is the limit. The trap you want to avoid is short-term or one-off campaigns for the sake of being flashy. Kallai suggests the best implementation of smart packaging is a sustainable program because it takes effort to get consumers to buy into a program and understand a technology. With a short-term campaign, a company could spend a lot of money to learn something but move on before the audience makes a contribution. “I like when there is a more sustained commitment from an organization…They want to find new ways of connecting with the consumer. And it’s not just a one time for the brand, but they have a long-term commitment to figure out how to do this and do it right.”
Another pitfall is not looking at the whole spectrum of innovations. It’s easy to suggest the latest and greatest technologies, but smart packaging choices should be made based on the project’s scope. “Your journey on the technology or smart packaging side could start from different places…and then you can add more and more features as you learn more and more about it,” Kallai advised. “When you show a customer their technology options you can show the old technology, you can show the new technology, and then you can show what insights you can get and the return on investment. But they need to be ready to try new things.” Additionally, a printer hoping to upsell smart packaging needs to stop focusing on the expense of these innovations. Lee proposed that you need to explain to customers the “added value when you start looking at all the other things that can happen when you integrate technology into packaging. Now you’re talking about multiple cross-functional departments within an organization that could benefit…It changes the value proposition very quickly.”
Lee concluded that none of this can be done in isolation. “We’re now changing something from a product into a solution and we need to have multiple parties involved because as a packaging converter I don’t have the core capabilities to actually put this all together by myself.” These internal and external partnerships will become incredibly important as printers plan solutions or anticipate problems by relying on others to help meet customer needs.
Lee summed up the importance of smart packaging best. “What we are trying to do with intelligent packaging is add more. Do more with it. To influence buying. To potentially learn more about our consumers. To provide levels of safety. To add convenience to our lives. We’re trying to make packaging do more than the original thoughts of what packaging actually does.” Expanding the purpose of smart packaging to benefit everyone in the value chain is the true innovation.