Active, Intelligent, Connected, & Otherwise 'Smart' Packaging Hits its Stride

Biggest hurdles: data management and consumer education

“Some of the things we’ve heard over the last year that are top of mind now at this event include educating consumers on how to use smart packaging, and also educating brands and retailers on how to manage and put to use the data they’re getting via smart packaging. If we’re honest, we feel the development of some areas of smart packaging is being held back by that lack of [brand and retailer] education and a lack of ability to share data. Instead of not having enough, they have loads too much that they often don’t know what to do with, or can’t share it with people who would know what to do with it,” Manly observed, referring to a type of data paralysis that brands experience when their outgoing communications suddenly start generating feedback loops of valuable, actionable, but overwhelming consumer behavior data.

“But that’s silly, the know-how is there,” he said, pointing to a presentation by Jenny Stanly of Appetite Creative, a company devoted to creating consumer experiences and gamification via connected packaging, such as brand owner Schweppes’ Jus de Fruits Caraibes campaign that PW covered last year. The Appetite model collects a wealth of data on consumer behavior via their interactions with the package and feeds that data back to brands in a feedback loop. According to Stanly, it’s true that brands don’t use that data as much or as well as they should, but she notices that it’s improving.

“According to Jenny, they’re going to have to use that data, partly because they’re being pushed by legislation to do so, and partly because the culture in the companies is changing as this new era of data and data management comes online. It’s breaking down the silos that house this data, and more easily sharing it, that’s going to be the hardest part.”

Notably, legislative pressures on packaging-borne data use and ownership are more advanced in Europe than in the U.S. Consider our Drug Supply Chain Security Act (DSCSA), which originally had a series of phased milestones—some of which were delayed—leading up to the 2023 deadline for full compliance. That enforcement deadline has been extended again, another year, into 2024.Reacting to recent French regulations, McDonald’s and its tech/tableware suppliers are making strides in the management of reusable foodservice packaging materials. U.S.-based Checkpoint Systems revealed a practical application of RFID technology in tracking and managing reusable tableware for the major fast-food chain. The company remained unnamed during the presentation on-stage for confidentiality reasons, but it’s widely known the chain is McDonald’s.

Still, legislative drivers in Europe will impact packaging-derived data sharing practices the U.S. market. That will be sooner than later for multinational brand owners like Nestlé, P&G, Unilever, and Mondele-z since a singular approach to data management is simpler and more economical than a piecemeal-by-market system of approaches.

Successful data management by brands and retailers may unlock the potential for not only smart packaging, but an entire smart retail ecosystem with smart shelves populated by smart packaging. Consider automated and autonomous grocery stores (smart stores) based on NFC or RFID, with NFC-based AIPIA presenter ST Microelectronics and retail pioneer Blockstore Group at the leading, bleeding edge. There’s a consumer engagement element since the NFC can communicate with smartphones, but there’s also a strong inventory management and replenishment element for the brands and retailers. The automated payment potential with consumers’ connected smartphones may further reduce retailers’ reliance on trained human workforce.

“You’ve got Walmart [in the U.S.], who seems quite wedded to RFID and traceability elements of smart packaging, but it’s not yet translating through to consumer engagement and the full integration of a smart store. Meanwhile, such retailers are always under pressure from lack of trained personnel and workforce scarcity, so a smart store with smart packaging on smart shelves is a logical outgrowth that I’m sure we’ll see.”

Platform interoperability is an issue for brands

An aggravatingly persistent attribute of smart packaging is the fractured nature of its technologies and technology suppliers. Brands and retailers seek turn-key smart packaging solutions but find themselves instead having to erect their own layered stacks of technology to create one-off, bespoke, and proprietary smart packaging solutions and data streams. And when a combination of solutions is necessary to provide a total answer, data sharing can be tricky between layered and sometimes competing technologies.

“I just heard on the show floor that sometimes simple is best,” Manly said. “Don’t overengineer something that you don’t need, or find too confusing, or find too costly to implement. You can go step by step and scale a smart packaging solution as you become more sophisticated along with it. You can add elements as you go, and as you become able to cope with them.”(l. to r.) Caspar, Thykier of Zappar, Mark Hewitt of Connected Experience Consulting (CEC), Marc Powell of the Royal National Institutes of the Blind, and Sarah Masters of Unilever revealed accessible packaging to the visually impaired community through the use of QR code technology. Unilever’s Masters emphasized the scale of the issue, noting that “there are 39 million people around the world that are blind and many, many more, hundreds of millions, that are partially sighted.” Unilever and its partners are making packaging more accessible via the (once) humble QR code. The enhanced QR code, developed in collaboration with Zappar, features a distinctive pattern around its edges, enabling it to be detected and scanned more easily, and at a greater distance, by visually impaired users. The application then reads the product information aloud and presents it on a smartphone screen in large font. Read more at pwgo.to/8226.

From the technology suppliers’ point of view, the brands and retailers are themselves fragmented—each brand owner has a different product with different marketing and supply chain aims, so each is looking for a different suite of smart packaging technologies. A provider can’t exist to solve a problem that only one brand faces. Standardization by the likes of GS1 and its Digital Link, alongside market consolidation, are both working to align technologies and terms in smart packaging and reduce fragmentation. Events like AIPIA, where the disparate techs connect under one roof, also serve as standardizing steering bodies.

“Ultimately, we’re making progress in smart packaging. There are more implementations, there’s more QR, there are more chips out there and their prices are getting lower. There are just more mass rollouts of some smart packaging technology than ever before,” Manly summarized of the state of the smart packaging landscape. “But those mass rollouts are not enough. A company like Coca-Cola has done countless smart packaging campaigns, but each one is its own, compartmentalized, self-contained effort that has a beginning and an end date. The benefits of smart packaging are fully realized when it’s a sustained effort, not just singular campaigns. If we can get a retailer to implement that, then it would really get that momentum rolling. Walmart has done this for some of its SKUs, but I don’t see any supermarket or grocery chains who have done this, other than in the apparel sector where RFID is now almost universal for inventory management, shrinkage control, and warehousing. But apparel isn’t CPG or FMCG, and that’s where we need to get some sustained, mass-market traction. AIPIA exists to try to keep on plowing through, jointly facing headwinds, keeping people connected to make [smart packaging] happen.” PW