Smart Packaging Has Arrived — Are You Ready?

In July 2017, 19 Crimes wine decided to let its labels do the talking … literally. Each label, featuring a depiction of one of the real convicts banished to the Australian penal colony in the 18th and 19th centuries, used image recognition to power an augmented reality experience in which the convicts would appear on consumers’ smartphone screens to share their true stories. The campaign quickly caught on, demonstrating the power of smart packaging.

Andrew Floor, VP of brand and digital marketing at Treasury Wine Estates, the winemaker and distribution company behind 19 Crimes wine, explains the primary reason to enable interactive or smart packaging is to provide consumers with content, either for education or entertainment purposes.

“It comes down to pure content,” he says. “Augmented reality is a delivery vehicle for branded content and any brand should be focused on the consumer first.”

Treasury Wine Estates has since launched the Living Wine Labels smartphone app, which features immersive augmented reality (AR) experiences for multiple brands available from the winemaker.

Floor says that interactive packaging works if the experience is relevant to the brand it complements and it can help a consumer make a purchasing decision.

“It’s about making life as easy as possible and delivering content consumers are looking for as they’re making a decision,” he says.

In fact, according to Bill Cummings, senior VP, corporate communications at Thinfilm, a provider of near field communication (NFC) mobile marketing solutions, if interactive or smart packaging technology is designed for a consumer to interact with it while shopping, the message will likely be tailored a certain way.

“If [consumers] are in store, the message or experience is more likely going to be geared toward getting the person to buy that product,” he says. “If you think about the way consumers make purchasing decisions in store, you’ve got a very large percentage of users who use their smartphones to do research while they’re on-site at a retail location.”

The Living Wine Labels app paired with emBRAZEN wine lets consumers hear the stories of women who have made a difference in history, such as Celia Cruz seen here. Image courtesy of Treasury Wine Estates.

Cummings explains that in this scenario, interactive or smart packaging can serve as an “intermediation” between the brand and the consumer. It is not a guarantee, for example, that a particular brand will come up at the top of the search results when a consumer looks for reviews on that particular type of product. However, if that brand enhances its packaging with an NFC tag, it can establish direct communication with the consumer, he says.

Interactive or smart packaging can also be used strategically to reach a desired consumer base. For example, Barbadillo, one of the top wine producers in Spain, implemented NFC tags into 126,000 neck collars placed on its top-selling white wine, Castillo de San Diego. Cummings explains that the brand determined it needed to attract a younger generation of wine consumers, while giving its branding a refresh. Barbadillo launched a “tap and win” campaign, in which it offered consumers the chance to win a cash prize. To enter, consumers tapped the bottle with their smartphone while in store. But the contest required a specific entry code, which was located on the cork inside the bottle, encouraging consumers to bring a bottle home.

“Barbadillo found that through the use of NFC, it really amplified and supported a collection of contact information within the younger demographic they were looking for,” Cummings says. “In addition to generating a ton of PR coverage about this particular campaign, they were able to fill their marketing funnel with a younger demographic of consumers they could reach out to in the future.”

While interactive and smart packaging is an effective means of increasing consumer engagement, it can also be a strong marketing tactic for specific products. For example, 19 Crimes isn’t the only image recognition success story from Treasury Wine Estates. The company has also incorporated the technology into its The Walking Dead Wines, which feature labels that bring scenes from the popular television show to life. Floor explains that the buzz generated from these brands has driven downloads of Treasury Wine Estates’ Living Wine Labels mobile app.

“One of the reasons it has continued to grab people’s attention is because it’s become virally driven,” Floor says. “We’re not doing a lot to promote this outside of our channels. What’s interesting is that consumers are talking to each other, peer to peer. There is nothing more powerful than getting recommendations from friends and family.”

Although smart and interactive packaging can be used effectively to drive sales and help initiate a purchasing decision, it can also be used to inform consumers about the state of the product within the packaging.

Antonio Williams, VP and director of novel printing technologies at PARC, a research and development company founded by Xerox, points to printed electronics as a way to add value to products throughout the supply chain.

For example, he says a brand could add a temperature tracker built using a printed battery, chip and antenna to track the temperature of a product throughout the supply chain. This could be used for anything from ice cream to a pharmaceutical that needs to maintain a stable temperature. There are also sensors that can detect certain gases released as food spoils that will communicate freshness to the store or consumer.

Williams also describes Xerox’s printed memory that can be attached to packages to make them “smart consumables.” For example, he says, it could be attached to a refrigerator water filter cartridge to authenticate and prevent counterfeits as well as keep track of how many times it has been used and how much time is left before it needs to be changed.

Williams says smart packaging could even be used to aid a store in the reordering of products. For example, he describes a situation in which a carton of bottles or a smart shelf with a sensor connected to the cloud could reorder more product automatically when it is running low.

Next Steps

As the use of interactive and smart packaging grows, package printers and converters need to work with brands to determine the best technology to use. Williams says it’s important to understand the main purpose of the various smart packaging technologies and what the brand’s goals are in using smart packaging.

“There are so many possibilities,” he says. “You need to consider the end-to-end experience.”

By using image recognition and the Living Wine Labels app, Treasury Wine Estates is able to bring its wine labels to life and increase consumer engagement. Image courtesy of Treasury Wine Estates.

In an end-to-end experience, both the technology on the package and the software and online solutions need to be considered, Williams explains. This includes how the technology will connect to relevant content or even how it will connect to the cloud.

Consumer preferences also need to be taken into consideration. Williams notes some consumers, such as older generations, may not feel comfortable interacting with a product via their smartphone. In these cases, it may make more sense to use an interactive smart label on the actual package, such as a sensor or light and sound emitting technology.

Floor explains that consumers are becoming more “empowered” to dictate their personal retail experiences, making it even more crucial to understand what they’re looking for in interactive and smart packaging.

“Consumers want to shop on their own terms — what they want, when they want, how they want it and where,” he says. “For brand owners to embrace that, they have to put the consumer first and understand what they’re looking for. Smart packaging can provide the content consumers are looking for; how do we help them have a better shopping experience or make informed decisions?”

Not only can interactive and smart packaging benefit the consumer, for printers and converters able to offer brands these solutions, it could command a higher price point and therefore more revenue, Williams says. And, as the technology proliferates, it will become more affordable to produce.

“As the price of the technology becomes more affordable, the technology will move from high value products,” Williams says. “We will see more of it in fast moving consumer goods.”

However, in order for the technology to continue to grow, there is an education component. Cummings explains there are still some changes that need to happen on the consumer side.

“We’re still relatively early in the process,” he says. “The consumer base, and also the brands, are just starting to learn about the technology and there is a certain education process that needs to happen. There is a cultural change that needs to happen too, where over time as we see more of these smart every day products on shelf, in-store, consumers will become more accustomed to tapping on them.”

A printed memory label can be attached to pharmaceutical packaging to authenticate the product and prevent counterfeits. Image courtesy of Xerox.

Consumer and brand education aside, if done correctly, smart and interactive packaging can be an effective means of connecting consumers with a brand, assisting them in making a purchasing decision or it can act as an information source about the product’s state within the packaging. Floor points out that it can be a valuable packaging solution.

“This is an opportunity for a portal to invite consumers into your world,” he says. “If you take that approach, the digitization of the label and putting the consumer first becomes incredibly powerful and everybody wins.”