The Truth About “Smart Packaging” For CPG Brands.

Few consider smart packaging a dumb idea, but that doesn’t mean it isn’t a foolish strategy for your packaging design.

While CPG in web 3.0 makes smart packaging seem necessary, not every brand can (nor should they) invest in a smart packaging system digitized to enhance the experience. 

Across many CPG categories, brand owners and managers fall victim to shiny object syndrome, slapping a big fat QR code on the front of the package. 

Do you want to know who should (and shouldn’t) invest in smart packaging and the best ways to leverage intelligent packaging to increase purchase intent and improve the brand experience? 

This article will help you better understand these packaging technologies while providing insights and strategies to help your brand find an immediate and long-term ROI. 

What is Smart Packaging?

Regarding CPG marketing, smart packaging is a means of tying in your product packaging with a digital experience. Smart packages leverage connected technologies giving consumers a deeper look into the product than traditional packaging space permits. 

The packaging industry extends the definition of smart packaging to include active and intelligent packaging. 

• Active packaging is an innovation that allows the packaging material to interact with the product, helping to improve shelf stability. 
• Intelligent packaging uses packaging sensors that provide information to the retailer and brand owner about the current health of the product. Food packaging may include shelf life metrics such as temperature, storage time, freshness, and other means of maintaining product quality.

In this article, we will focus on smart packaging as a part of a CPG marketing strategy. 

Connected Packaging: From Shelf To Where?

Examples of how brands can connect their packaging include; sending them to a social media channel, downloadable file, or coupon page. We highly recommend sending consumers to a trackable landing page, regardless of your smart packaging objectives. Not doing so eliminates much of the reporting and future marketing benefits that make smart packaging such an intelligent decision. 

The Risks of Smart Packaging

We hate to be a downer and lead with the risks of smart packaging, but glossing over the downsides is easy when the excitement of an opportunity gets the best of you. 

How can there be a downside to connected packaging? 

Good question, and since it is their objective to sell one of these technologies, not one you ask people in the smart packaging market. As a packaging design agency that performs extensive consumer testing across all client projects, we find that most CPG and FMCG brands are not ready for this technology or need preparation time to integrate them correctly. 

Here’s why.

Loss of Marketing Space

Every inch of your package is essential. The packaging design moves the consumer from product awareness to product interest. Inherently there is a trade-off to using a scannable code on your package. Including it may cost you a high-converting purchase driver.

Supply Chain Issues

Operationally, smart packaging solutions limit how nimble your brand can be when changing the label or packaging manufacturer. Conventional packaging is easier to produce than smart packaging because of longer set-up times, increased error rates, and limitations in manufacturing capabilities. 

Operational Resources

Someone has to maintain and quantify the smart packaging strategy. While the cost of a landing page may be small, management time is required to ensure:

• The package to promotion runs smoothly.
• Audience segmentation occurs across all channels.
• Create reporting that is accurate and organized to provide key insights.

The Benefits of Smart Packaging

There are very few limiting factors to the benefits smart packaging offers. 

1. The number of customers scanning your products 
2. The available effort for your ongoing marketing strategy 

These limitations impact your strategy but are also reasons to be excited about how these technologies can help your brand. 

Here’s a look at smart packaging benefits that can increase customer loyalty, satisfaction, and company revenues.

Retailer Integration

Omnichannel is the reality of today’s CPG market, and brands must tie these numerous channels together to create future messaging that supports each channel exclusively and all channels collectively. Whether your product is on Walmart shelves or TikTok’s warehouses, connected packaging can put pre-purchase consumers and new customers into the same (and different) funnel for future direct marketing purposes.

Consumer Insights

Correct use of smart packaging delivers consumer insights that help you succeed on store shelves. Understanding the demographics, time of day when consumers interact with your products, and other metrics create better conversations with your retail partners. 

Types of Smart Packaging Technology

Stepping back a bit, here’s a quick look at the smart packaging technologies assisting both the brand and the retailer. 

NFC tag

RFID stands for Radio Frequency Identification, a contactless one-way communication method at varying distances. An NFC tag is a small, passive chip we can embed in objects (such as packaging) or stickers. It enables one-way communication between devices and is readable by smartphones and other NFC-enabled devices. 

Brands use NFC tags for inventory management and asset control. 

QR code

A QR code is a two-dimensional barcode that can store up to 4,296 alphanumeric characters. Common QR code uses include storing website addresses, product information, and contact details. Smartphones and other NFC-enabled devices can quickly scan QR codes to access the information they contain. 

Brands use QR codes as the primary means of converting a package into a digital experience. 

RFID tag

RFID tags are small, passive chips that we can in objects or stickers. They enable two-way communication between devices and are readable by smartphones and other NFC-enabled devices. Brands use RFID for retailer communication to track where products are and how they sell your products. 

Smart Packaging Strategies

There is a right and wrong way to create a smart packaging strategy. With the correct strategy, you will be overly satisfied with your investment. With a poor strategy, you will exhaust resources and disappoint retailers. Here’s how we suggest you think through your smart packaging strategy. 

External Packaging: Keep it Quick

A consumer first reviews your external packaging at the point of buyer consideration, which means when they have pulled your product off the shelf. It is at the point where they bring the package near enough that all components and fonts become visible to the naked eye. 

Many brands incorrectly use this space to develop consumer interest beyond the point of purchase. Instead, using a QR code on the external panels of your packaging should be for brief (but more extended than the package provides) interactions. 

Promotions

Create a lead gen form that takes consumers to a squeeze page where you capture a name and email so they can access the latest coupons or promotions. 

Bringing the Product To Life

Create a 10-second video snapshot, giving consumers a look into the product development process or ingredient quality.

Internal Packaging: Strengthen the Relationship

Except for retail thievery, unboxing occurs once consumers return home from shopping. The time to use smart packaging to further customer engagement is at this point of unboxing. Careful, though, consumers still have limited attention spans; this is not the time for a 45-minute video about why buying your product is the right decision. 

Now is the time to strengthen the brand’s and shopper’s bond through a unique consumer engagement strategy. 

Further Your Brand Story 

More than ever, consumers find their identity in the brands they buy. Every purchase is a statement, and you can use the internal components of your smart package to reiterate to buyers why they should believe in your brand. 

You can accomplish this by showing off your work environment with team member testimonials. Or go for a more personalized impact, such as your brand commitment to preserving the environment. 

Enhance The Consumer Experience

Interactive packaging is more than what happens from the package to the smartphone. Interactive becomes imaginative when, after seeing the digital presentation, the brand stimulates the consumer’s mind with more impressions about their product. Using a food product as an example, a smart package leading consumers to a recipe ebook can create a sensory response that enhances the package experience. 

Capture Feedback To Improve CX

Master marketer Seth Godin suggests that customer service is perhaps the brand’s most powerful marketing means. Unfortunately, most brands hear this and reserve it for their consumer-facing CX (customer experience) team. CPG brands can capture additional feedback by proactively connecting with customers through smart packaging. 

We Guarantee Retail Store Performance 

Want a packaging design that increases consumer interest and satisfies retailers? At SmashBrand, we develop and rigorously test product packaging for CPG and FMCG brands. We can help you determine if a smart packaging solution is right for your brand and, if so, how to implement it in your packaging design strategy.