For most people, product packaging just means “the stuff you throw away.” It’s disposable, inert, and unimportant. At most, you might notice the branding or check an ingredients list—but it’s just a distraction on the way to the product itself.
Connected packaging has changed the game.
Instead of being disposable, smart packaging can link to online content that lasts forever. Instead of being inert, it can help track supply chains. And instead of being unimportant, it’s a seamless way to share information, guides, inspiration, and interaction.
In this blog post, we’ll see how connected packaging solutions are transforming consumer packaged goods (CPG) businesses, from the start of the supply chain all the way through to customer reviews.
How does connected packaging work?
Connected packaging means packaging with built-in digital features. Those features usually aim to manage supply chains or improve the consumer experience.
Some common types of intelligent packaging include:
- Digital sensors to monitor temperature, pressure, or freshness
- RFID tags to track and locate individual products
- Near-field communication (NFC) tags, which work like short-range RFID, to manage inventory and verify authenticity
- QR Codes on product packaging to identify inventory and share information with consumers
Why is connected packaging important for businesses?
Retail and ecommerce brands have notoriously tight margins. Intelligent packaging is just one of the ways that businesses can streamline their operations—increasing efficiency, protecting their market share, and increasing consumer engagement.
Supply chains and logistics
Real-time tracking through RFID and NFC tags helps to optimize supply chains. Products are less likely to get lost, and you can spot patterns or bottlenecks in delivery routes. As your supply chain and logistics become more efficient, you’ll also see an improvement in sustainability, with fewer product miles.
Similarly, smart sensors can trim costs by alerting you whenever a product is damaged or delivered past its best. If you detect a pattern—for example, products on a certain delivery route are likely to get crushed—then you can take steps to fix it.
QR Codes and short links have a role to play here too. They can carry huge amounts of information, from logistics data to performance reports. Best of all, you only need a smartphone to use them.
According to research from Accenture, only 16% of brands use the data from smart packaging to the fullest—and they consistently outperform the other 84%.
Customer engagement
QR Codes make packaging instantly interactive. Now that virtually every consumer has access to a smartphone, they can enjoy connected experiences.
For example, you can use smart packaging to share:
- In-depth product information
- Nutritional information or recipe ideas on food packaging
- User manuals
- Access to brand loyalty programs
- Information about brand sustainability
- Links to social media or review sites
- Access to exclusive content and digital experiences
- AR experiences that work with the user’s surroundings
Unlike other forms of marketing, connected packaging has no physical limitations. You can share anything, anywhere—and track the consumer interactions that follow.
Brand awareness
Connected packaging can improve brand awareness in a few ways.
First off, it’s fun. Interactive elements and gamification mean that customers enjoy interacting with you.
Second, connected packaging makes for a smoother user experience. It’s easier to access product information and digital content through QR Codes and branded links, and consumers appreciate that convenience.
Last of all—and perhaps most importantly—connected packaging makes CPG marketing easier. It gives you an unlimited canvas on which to share your visual branding and values. Through digital metrics, it also gives you a trove of data on consumer behavior to improve your packaging campaign even further.
Product authenticity
Counterfeit products are a growing challenge for the CPG industry, from high-end whiskey brands to convenience store snacks.
NFC tags that link to certificates of authenticity, tamper-evident seals, 2D Barcodes, and trackable QR Codes are all important weapons in the fight against counterfeiting.
Connected packaging gives you the power to record more information about products, as well as share provenance and authenticity with buyers. That makes it easier to track real products—and protect your reputation with consumers.
How do the functionalities of connected packaging help brands?
With more efficiency, more sustainability, and better customer engagement, connected packaging has a lot to offer. But as with any other digital marketing tool, the devil is in the details.
Let’s explore a few ways that you might use connected packaging designs—and what features and functionalities you’ll need.
Transforming packaging into a personal concierge
Personalization has been a buzzword in marketing for some time now. Seventy-three percent of consumers say they expect you to understand their unique needs.
Connected packaging is one way to make that happen without blowing your budget. Smart packaging gives you a steady flow of information about the user experience: when products are delivered, how fresh the product is, and so on.
Then you can use QR Codes and short links to deliver a connected customer experience. Dynamic QR Codes enable you to update content in real time—so, for example, you could share targeted recipe suggestions depending on when a food product reaches the customer.
Getting even more customer data insights
Until recently, there were limits on how far brands could track consumer behavior. You could follow the buyer’s journey from first contact to the checkout, but your data ended there.
Connected packaging gives you data on customer behavior all the way up to delivery and beyond. Whenever someone uses interactive features, such as scanning a QR Code, you can access information about their preferences and buying habits.
That data feeds back into your marketing campaigns, helping you understand the demographics of your target audience and how to encourage customer loyalty. You can even see fine-grained data, such as what time of day customers are most likely to interact with your content.
If we revisit our example of sending personalized recipe recommendations, you could refine your strategy even further by sharing dinner recipes if people are more likely to scan in the early evening. With a little creative thinking, you could see even more customer activation and positive feedback.
Building brand advocacy through transparent practices
Every marketer knows that consumer decisions are increasingly driven by social and moral values such as sustainability. Connected packaging can help you share vital information with your customers.
By scanning a QR Code, they can see proof of product origin, learn about your ethical sourcing practices, or see how you’re offsetting the environmental impact of your business.
You can also make that information interactive to encourage brand advocacy. The same short link on product packaging could encourage customers to find you on social media, post about their purchase, or leave a review.
Making marketing campaigns stronger with storytelling
Connected packaging means that your branding doesn’t have to stop when customers receive their products. You can keep the interaction going through interactive content, exclusive digital access, or even augmented reality experiences using QR Code technology.
To get the best results, every stage of the experience should be branded, from customized short links to the style and tone of online content. The longer you can keep customers inside the brand experience, the better their recall and awareness will be.
3 connected packaging best practices to know
Connected packaging is a relatively new concept, even though some of the technology (like QR Codes) has been around for decades. Here are three best practices to make sure it works with your existing marketing strategy.
1. Align functionality with business goals
Look at all the options for smart packaging and choose the technology that fits your business objectives. There’s no point in adding NFC tags to every product in your inventory if you’re not going to use them.
Connected packaging should improve your internal processes and the consumer experience. If it’s not making life easier for someone, it’s not worth it.
2. Integrate with existing systems
Choose connected packaging tech that works with the hardware and software that you already have.
For example, if you plan to use RFID, check that it will be compatible with and useful for your existing supply chain. If you plan to use QR Codes with a tracking element, set up a plan for how to collect, monitor, and analyze that data.
3. Consider data security and privacy
Adding digital elements to your packaging means taking responsibility for digital security. Connected packaging can protect your brand from physical counterfeiting or theft, but don’t forget that smart tech can be hacked, too—unless you have adequate security measures in place.
For most brands, the key concern is protecting customers’ data. If you collect information about your customers through interactive content, you’ll need a plan to store and use that data securely. As with any other source of personal data, you may be subject to privacy laws such as the GDPR.
Discover what connected packaging could do for you with Bitly’s insights
CPG brands are waking up to the power of connected packaging to streamline their supply chains, reduce environmental impact, and improve the customer experience. Smart, space-saving tech, such as tiny RFID tags and QR Codes, make it possible to collect and share data efficiently. You can measure customer behavior and create connected experiences with one scan from a smartphone.
Retail and ecommerce brands are already using branded short links, 2D Barcodes, and QR Codes from Bitly to understand their customers and suppliers better. With these tools plus Bitly Analytics, businesses can gain valuable insights into how consumers are interacting with their products, helping you refine your future packaging strategies.
