Packaging's Increasing Intelligence

ShelfAware utilizes RFID technology to create automated inventory platforms. | Credit: ShelfAware

The 21st century consumer base craves new and exciting products, but shoppers also desire information that enables them to make informed choices or become captivated by a particular narrative. That’s why active and intelligent packaging is becoming an increasingly intriguing option for brands that want to stand out among the competition.

This desire has given rise to smart technology such as augmented reality, NFC tags, RFID, QR codes, image recognition, embedded barcodes, and blockchain.

Eef de Ferrante, managing director of the Active & Intelligent Packaging Industry Association, notes that brands are seeking intelligent packaging solutions to help them differentiate themselves and gain a toehold in the market.

“All the consumer engagement campaigns using augmented reality for example, show a hugely positive outcome for the brands and with more and more smartphone users globally, this can only be seen as a major opportunity,” he says. “We look to ensure [active and intelligent packaging] developers and practitioners are able to work together to build up a complete solution so brands can see a strong ROI from these solutions.”

Scott Fletcher, president and CEO of Atlanta-based LocatorX, which specializes in the development of technology for location tracking, says intelligent packaging is often defined by the ability to have external or internal indicators that provide information on the package or quality of the contents.

“Consumers are becoming more aware of the real problem of counterfeit goods,” he says. “Because of this, packaging is evolving to include more advanced labels that are more difficult to reproduce such as holographic images. In addition, there is a growing adoption of digital verification of products with QR codes or label scanning.”

Andrew Johnson, CEO of ShelfAware LLC, a Lenexa, Kan.-based company that leverages RFID technology, the internet, and the power of data to create an automated inventory platform, says intelligent packaging can be used to provide suppliers with real time data on the consumption of their products, which allows them to supply their customers in the most efficient manner, keeping the supply chain lean, responsive, and efficient.

“Now that everyone has a powerful computer in their pockets — their smartphone — companies can add data collectors and transmitters to their packaging to better engage the consumer, drive automation, or collect data to be used somewhere else in the value stream,” he says.

David Rogers, marketing manager for Blue Bite, a New York-based company that helps brands develop smart packaging via NFC technology, says these solutions provide the most frictionless opportunity for brands to speak directly with consumers and end users in a personalized and contextually relevant way.

“You can finally measure the effectiveness and consumer engagement of printed efforts,” he says. “This eliminates the need for endless Google searches, social media advertising wars, or overcoming crowded email inboxes. It’s the greatest opportunity to stay top-of-mind after the sale in an omnichannel way.”

The Digimarc Barcode serves as an imperceptible barcode that extends throughout the entirety of a package, providing an added level of security. | Credit: Digimarc

The Evolution of Smart Packaging

From a consumer engagement standpoint, some of the initial intelligent packaging offerings were limited, simply providing the ability for shoppers to scan packages with an enabled app to learn more about the product.

However, Jay Sperry, platform evangelist for Beaverton, Ore.-based Digimarc, which specializes in the implementation of imperceptible barcodes on packaging, says today’s intelligent or connected packages can deliver both operational and consumer value benefits up and down the supply chain.

The Digimarc Barcode for example, provides barcode information throughout the entire package, rather than just in a single location, and is largely imperceptible to most viewers.

“A smart code on a package can help with improved parts-matching in manufacturing, track and trace operations with a serialized smart barcode, as well as improve inventory management and planogram compliance in the aisles,” he says.

Allen Adamson, co-founder of Metaforce, which provides marketing solutions to a variety of companies, says the challenge on the intelligent packaging front is to determine when and how to use this new technology in a way that will be impactful within a brand’s overall marketing mix.

“Given that smart phones are close to becoming a shopper’s sixth sense, marketers are moving to integrate intelligent packaging to deliver a differentiated consumer experience,” he says. “From helping shoppers find products, to sharing more information in real time, to helping them make buying choices to helping them recycle after use, intelligent packaging is opening up a completely new front in the value that can now be delivered through this marketing touchpoint.”

Jones Packaging, a London, Ontario-based package printer, has found that while there’s been a rise in brands utilizing intelligent packaging, it’s still not as prevalent as many believe.

“While brands are aware of smart packaging options, often they are having difficulty understanding what they can do with it,” says James Lee, director of the company’s innovation solutions group. “We’ve definitely seen somewhat of a challenge when it comes to adoption.”

Still, he adds, intelligent packaging is allowing a package to be part of data collection and also expanding the information being provided to a consumer purchasing a product, which is a huge help.

In a rising number of cases, companies utilizing supply chain data are finding success.

“It’s starting to change from just being a gimmicky thing, because the Gen Z and millennial generations are concerned with traceability and the supply chain, and intelligent packaging can ease any concerns,” Lee says. “For example, Dutch retailer Albert Heijn printed a QR code on its private label orange juice carton and the packaging allowed consumers to scan and see the entire traceability of the orange juice, such as when it arrived at the store, where it was processed, and even where the orange grove was where the fruit was harvested.”

Some brands are using QR codes to offer recipes, coupons, or similar supply chain information. 

“These brands are starting to realize the power for increasing their sales by doing this,” Lee says. “They can start seeing consumer trends and have the data work in their favor.”

19 Crimes wine has emerged as a pioneer in image recognition technology with interactive labels.

Smart Solutions

While smart packaging is often associated with consumer engagement initiatives that further connect the user of a product with a brand, Sperry explains that it can also be a highly-beneficial money-saving tool for retailers.

“The profit margins in retail are thin,” Sperry says. “The key to staying competitive is operational efficiencies and maintaining shopper loyalty. Digimarc Barcode on packaging — because it is repeated imperceptibly across the package — improves [items scanned per minute] at checkout, reducing long lines and improving the shopping experience through quick-scanning by cashiers and at self-service kiosks.”

Calloway Cook, founder of Illuminate Labs, a dietary supplements company, has been looking into intelligent packaging solutions as the company grows its product line to include more heat-sensitive SKUs.

“As internet-of-things hardware costs decrease, intelligent packaging will be a realistic option for more retailers,” he says. “Technology which monitors package temperature can be extremely valuable for supplement manufacturers, because certain products degrade in higher temperatures. For manufacturers of such products, investing in intelligent packaging may prevent them from a huge loss in the future by allowing them to improve and optimize their shipping supply chain with data from the packages.”

de Ferrante says Near Field Communication (NFC) readers work at a maximum range of about 4˝, and allow customers to use their smartphones to learn information about a product, and it’s becoming something more brands are experimenting with.

“These are different from QR codes, because nothing needs to be scanned,” he says. “A consumer can simply hold their mobile device near the product to activate.”

Lee notes that Jones Packaging has seen a sharp increase in brands using NFC, with companies adding product tutorials for complicated products, rebate coupons and ways to reorder so one doesn’t even have to go back to the store.

“Every time someone taps, we have a means to identify the consumer, and with consent, we can find out who they are, but even without consent, we can see if they have been re-engaging with the brand on a regular basis,” he says. “We also can see when and where the product is being used through the IP address or GPS settings. All of that data is extremely valuable to the brand.”

Barbadillo, a leading wine producer in Spain, utilized NFC technology from Thinfilm for a consumer engagement campaign. | Credit: Thinfilm

The Role of the Printers

Package printers and their graphic production partners are a critical part of the value chain by supporting the growth of brands, and ultimately driving more sales and customers.

Sperry says that printers who are properly educated on Digimarc Barcode — including the impact to their graphic output and important QC workflows — can proactively deliver high-quality printed packaging to their customers.

“Printers will find a multitude of multi-media resources on the Digimarc website or can speak to their premedia partners and find out if they offer Digimarc Barcode for their retail and consumer brands customers,” he says.

Just a few years ago, companies needed to purchase intelligent packaging (such as labels with embedded RFID tags) from the label manufacturer with the data already encoded on the tag. This left systems inflexible and made implementations more complex.

Now, with a $3,000 RFID-capable label printer, one can print and encode these tags on the fly with some very robust, cheap, out-of-the-box label generation software.

“This combination means very little needs to be done to start making your own intelligent packaging,” Johnson says. “We use a Zebra ZT410 to print a nice readable label while simultaneously encoding a passive RFID tag embedded underneath the label. We’ve had a lot of success because the RFID intelligent labels are cheap, efficient, and highly effective.”

Fletcher says companies can use their current printers to add certified QR codes (CQR) to their products to ensure authenticity and prevent theft and diversion through tracking capabilities.

“Most label printers can easily add a small CQR to their existing process,” he says. “The uniqueness of the CQR is what provides a location stamp to every scan, therefore reducing diversion.”

Rogers notes QR codes can be added to products during the printing process. However, QR codes can provide a lot more value than many are accustomed to. For example, one QR code can now deliver multiple, custom experiences — alleviating the need to slow down the printing process with serialized QR codes.

“Leveraging technology platforms like Blue Bite, the same QR code can deliver customized, contextual (product-, location-, user-, behavior-specific) mobile experiences to the end user,” he says. “With wider QR awareness, printers today can offer customized QR codes that include brand colors and even logos.”

de Ferrante noted the current range of digital printers are more than capable of printing QR and other embedded codes and are increasingly being utilized to deliver smart packaging codes.

“In addition, the smart packaging sector is looking at ways to incorporate their solutions into existing print technologies,” he says. “This can be done by the use of special inks (such as conductive or thermochromics) to deliver effects or functionalities.”

Additionally, printed electronics is constantly evolving to enable existing machines to do some of the work or produce more cost-effective and faster methods of production on specialist equipment.

“A range of smart packaging technologies in the printing sector will be showcased at drupa next year on the TouchPoint Packaging stand, partly coordinated by AIPIA,” de Ferrante says.