Connected packaging can streamline your business, reduce costs, and help you connect with customers. But with so many packaging solutions on the market, it can be hard to know where to start.
Connected packaging can take a variety of forms, from RFID tags to temperature sensors, smart labels, and interactive experiences. They’re all designed to take something inert—packaging—and turn it into a valuable source of information.
Your packaging choices will depend on what your consumer packaged goods (CPG) business needs. In this blog post, we’ll look at the different problems that connected packaging can solve—and how to choose a solution.
Clear benefits of connected packaging solutions
Connected packaging is one of the biggest CPG trends, and it shows no signs of stopping.
Eighty-two percent of CPG brands surveyed have used connected packaging in the past 12 months as a way to collect data, educate the public, and engage with their customers. The value of the connected packaging market is expected to almost double within a decade.
That kind of sustained success comes from more than just hype. Retail and ecommerce businesses are all in on connected packaging because it works. It brings real benefits to brand supply chains and the consumer experience.
Improved supply chain visibility
Connected packaging, like NFC tags and RFID chips, illuminates the supply chain. You can track each product in real time as it passes along the supply chain toward the customer.
That traceability is useful in multiple ways. It reduces the risk of lost or bottlenecked products. It also helps make supply chains more efficient, as companies can see patterns in how their products move around.
Better product security and brand protection
Connected packaging can also protect your brand and reputation. While counterfeiters might be able to imitate your products and even packaging, it’s much harder for them to fake data.
Product security still includes physical aspects of packaging design, like tamper-evident seals. Now it can also take the form of trackable verification codes and digital certificates of provenance or authenticity.
Increased customer engagement
Packaging innovation can also create more exciting customer experiences. You can use intelligent packaging to share product information, exclusive content, and interactive experiences such as augmented reality tools.
Increased customer engagement has knock-on positive effects. When consumers feel more connected to your brand, you could also see a rise in customer loyalty and advocacy.
Common challenges that connected packaging solutions can solve
Some forward-thinking brands are motivated by the ways that connected packaging can upgrade their user experience.
But others turn to connected packaging to solve problems. If any of the following issues sound familiar, then connected packaging could help you get things back on track.
Inventory management issues
Inventory problems such as overstocking, stockouts, inaccurate stock levels, and missing or damaged products all have an impact on your bottom line.
Connected packaging makes it easier to track stock accurately—reducing the chances of a mistake. The data it provides also enables automation, such as automatically reordering stock when necessary.
Counterfeiting concerns
Counterfeiting, substitution, and tampering are all growing concerns in the CPG industry. They threaten your profits and your reputation. First, and most obviously, consumers don’t trust counterfeited brands. But there’s also the risk that counterfeit products under your brand name could fund crime.
Connected packaging makes it harder to fake or adulterate products. For example, tamper-evident seals on food packaging mean that consumers can trust the contents of a product. Businesses can use NFC tags on any products to provide certificates of provenance or authority.
Lack of customer insights
Digital marketing strategies are built on data. If you don’t understand your customers, you can’t engage their interest, offer connected experiences that work for them, or foster brand loyalty effectively.
Connected packaging gives you insights that lead to more effective consumer engagement.
For example, when someone scans a QR Code on product packaging, you can see tracking data about when they scanned it, what mobile device they used, and even their location. You can feed that information back into future content so that it’s an even closer match for your customers’ preferences.
Inefficient product logistics
In the past few years, brick-and-mortar and ecommerce retailers alike have struggled with slower supply chains. Inaccurate routing and product mishandling can make things even worse, as last-mile deliveries are delayed and packages get returned.
Connected packaging can help in two ways. First, smart identifiers like RFID, NFC, and QR Codes help you track the progress of individual packages. Packaging sensors that monitor temperature and pressure can flag any damage or mishandling right away. Over time, you can use both types of data to optimize delivery routes and pinpoint problems.
Limited brand-consumer interactions
Marketers are great at understanding the buyer’s journey—but their knowledge and interaction often stop at checkout. Connected packaging means that you can stay connected with customers after that first purchase.
You can use Bitly Codes to link to virtually any type of interactive content: web pages, instruction manuals, social media, review sites, loyalty programs, and even augmented reality experiences.
Examples of different types of connected packaging solutions
So far, so good: Connected packaging can solve common problems and upgrade the customer experience overall. Now let’s go beyond the theory and look at the practical details of how connected packaging works.
Sensor-based packaging
Sensor-based packaging has been a game-changer for CPG brands, especially for more fragile products, such as food and pharmaceuticals.
Built-in sensors can monitor things like:
- Temperature
- Pressure
- Freshness
If the sensor picks up on a spike in the metrics—or, for example, a slight but sustained increase in temperature that could spoil food—you’ll receive a central alert. In the short term, this means that you can spot and divert damaged packages. In the longer term, you’ll be able to recognize patterns and problem points in your supply chain and logistics.
Track and trace solutions
Radio-frequency identification (RFID) and near-field communication (NFC) tags are the two most popular types of connected packaging for managing inventory. They’re part of the Internet of Things (IoT), making everyday objects visible in your data systems.
RFID tags enable you to track unique items with a range of hundreds of meters so that you can see packages moving through a warehouse or delivery process. NFC tags have a shorter range, but they’re extremely effective for validating products and sharing data.
Interactive packaging
Connected packaging can, quite literally, connect your customers with digital content. That content can take almost any form you can imagine.
For example, QR Codes can link to instruction manuals, product information, sustainability certifications, videos, websites, feedback forms, review sites, social media profiles, or members-only loyalty programs via URL.
Some brands use QR Codes for AR experiences, where customers can see products and branded experiences projected into their own space. Marketing campaigns have ranged from interactive virtual catalogs to exclusive musical performances—and this technology is just getting started.
Smart labels and displays
Smart labels include things like 2D Barcodes that contain more information than you’d expect from a conventional barcode. They don’t just contain inventory data for retailers to use; they can also be helpful and informative for customers.
Smart displays go a step further by showing up-to-the-minute information. They can display product information, expiration dates, and even customized marketing messages. For example, smart display labels on fresh food could show how close it is to expiration, counting down in real time.
How to choose the right connected packaging solution
You’ve experienced the problems and you’ve read about the solutions. Now it’s time to decide which connected packaging solutions will work for your brand.
Every business is different, so this isn’t a quick decision. You’ll need to consider specific factors, such as:
- What problems are you trying to solve? Do you need to track inventory, monitor delivery routes, check product status, or something else?
- What are your business objectives? For example, you might be focused on reducing costs or carbon emissions.
- How much can you afford to spend on connected packaging? Each option comes with a different price point: For example, QR Codes might be cheaper to set up than smart labels.
- What’s your target audience? If you want the public to interact with connected packaging, it’s a good idea to choose something readable by smartphones, such as a QR Code.
- What kind of products do you sell? Different products need different types of monitoring.
- What types of packaging do you use? The materials that you choose will impact which connected packaging solutions are most accessible.
- What hardware and software do you already use for logistics and marketing? Whether you use barcodes, RFID, or QR Codes, they’ll need to integrate seamlessly with your system.
- Do you need a rapidly scalable solution? Look for options—and providers—which can accommodate it. Bitly offers an automated API for scaling up 2D barcodes.
- How does the solution work with your data security policies? Just as connected packaging has to integrate with your logistics, it also has to be secure.
If you’re choosing between RFID or NFC tags, you’ll have to weigh up the fact that RFID tags carry more data, but are more expensive. Both smart labels and QR Codes can show real-time information about a product—but which option are your customers most likely to use, and which option is easier to include on your product packaging?
There’s a decision to be made here that balances cost, usefulness, and integration with existing packaging materials and technologies.
Some of the options on offer are so efficient that you could even use them in the process of making your decision. You can share short, trackable links to different connected packaging options with your colleagues—then use Bitly Analytics to assess their responses.
Check out connected packaging solutions and beyond with Bitly
Connected packaging can help refine your marketing campaigns, speed up supply chains, and improve your logistics and delivery systems.
Connected packaging solutions are designed to make life easier for consumers and CPG brands. You only need a smartphone to connect each package to a world of digital information.
With Bitly, you can create branded links and QR Codes and track how your customers use them. Give them an unforgettable experience, then use the data you gather to create even better experiences in the future.
Get started with Bitly today to leverage QR Codes, Analytics, and more for powerful, effective connected packaging solutions!
