Through the development of media and information technology and distribution, marketing has become an increasingly complex and critical component to engaging clients in the sale process at a more personal level. Social media and web-based advertisements have increasingly focused on integrating entertainment, engagement, and accessibility in the process of marketing to their targeted audiences.

This has changed the world of marketing as we know it, shifting from a primary focus of simply getting advertisements in front of any potential customers, to customized marketing campaigns for specific individuals on account of the many nuanced life-factors that make each individual customer taste and preference unique.

Since advertisements play such a large role in everyday consumer engagements with media, their devices, and their access to content, an oversaturation of the advertisement space has called upon businesses to re-imagine marketing, more specifically in context to consumer packaged goods.

With consumers increasingly demanding that the products they purchase are easy to research on-demand, and customizable to their individual preferences and needs, smart packaging offers innovative solutions to a general population with shortened attention spans and longer lists of requirements for the products that they are seeking to buy. Smart packaging is not only about putting quality products in front of consumers but better-integrating consumers in the process of the sale, and establishing a more detailed relationship between them and the businesses that they love.

how does smart packaging work

What is Smart Packaging?

Smart packaging is paving the way for the future of marketing, further integrating the consumer and their smart device with the sale processes. By allowing consumers to scan QR or NFC smart labels on products, they are afforded the ease and convenience of finding out more about the product they are considering purchasing, without doing much more than taking out their smart device. ⅔ of shoppers say they prefer to receive product information through their phone as opposed to asking a sales associate. Smart packaging aims to bring the consumer a more personalized shopping experience.

By allowing consumers to better interact with the products they’re interested in, marketers can better understand the products a specific consumer is looking for, in addition to offering a number of customizable solutions to their sales process. Smart packaging is expected to reach $40 Billion in market share by the end of 2020, and north of $46 Billion by the end of 2025. There’s no doubt that integrating smart packaging technologies will be an essential part of keeping company marketing initiatives relevant in the expansive competition for market share and customer retention in the future.

How Smart Packaging is Changing CPG Marketing  

Consumers are no longer shopping for products or services as they see them on the shelf. Consumers are demanding engagement with the comprehensive sale processes including the ease of accessing detailed information on their products, in addition to the ability to better include their personal considerations and preferences as they work through the sale process. We’ve put together a list of 5 ways the marketing of consumer packaged goods has been transformed by smart packaging, in order to better demonstrate how impactful developments in this marketing space could be for your business.

1. Direct Connection With the Consumer

Traditional consumer packaged goods marketing techniques have largely left the consumer out of the equation as it relates to keeping their customer base informed. With increased pressure put on businesses and corporations to play their part in contributing to sustainable environmental initiatives, and limit the use of labor or materials from specific global regions, it is often difficult to effectively communicate sourcing information and product details to impact-conscious consumers. The general public has never been as interested or demanding of the information behind the journey products have taken before they end up on the shelf. Smart packaging can be utilized to paint a better picture of your company’s part in the larger global/societal picture. Further, establishing a brand rapport of credibility, consciousness, and impact.

By linking information such as the product’s journey, the location the product was sourced or created, as well as the materials and individuals involved in the production of the product, you can keep your customers better informed. Increased consumer trust and brand recognition are thereby a huge developmental aspect of smart package integration. Additional capabilities can allow your business to retain better information on consumers who have purchased your product, affording companies the opportunity to communicate with customers in the case that specific product issues or recalls become apparent. Not only can consumers find more information about the products themselves, but smart packaging is an incredible catalyst for immersive brand storytelling.

When product and company information is communicated through consumer’s smart devices, companies successfully establish a direct connection with potential customers. Smart devices are an important part of most daily functioning, so engaging with the consumer on a platform they are familiar with using in most other areas of their life, makes a more personal connection with your business and the consumer. An increasing amount of sales are taking place away from brick and mortar locations, whether through e-commerce sale or on-the-go purchasing. The Covid-19 global health crisis has largely exacerbated this reality for consumers around the globe.

When consumers receive their purchased product in the mail, for example, they are not afforded the same opportunity to ask questions as they would be able to in-store, or better understand products within the context of their part in a brand or industry’s larger picture. Allowing customers the ability to easily access more information about the product and company behind the product from the comfort of their own home, directly links consumers to the seller.

2. Delivering Additional Services Around the Product

Customer sales are the goal of any consumer goods product manufacturer and distributor. However, business rapport, brand recognition, and company growth are often reliant upon repeated sales, customer retention, and increased service capabilities to make customers’ experience the best experience possible. You want your customers to keep coming back to you, and when they do, they should be able to do so with ease. Not only do you want their repeat business, but you want them to talk to their friends about your company. References continue to be one of the most important leads for companies looking to increase their customer base and market share.

Through the integration of smart product packaging, your business can better integrate foot-in-the-door tactics to ensure customers are able to easily engage with your company should they need customer support for particular product issues or questions. Traditional packaging solutions may involve less than intuitive platforms for easily connecting customers with companies at times when needs or questions arise.

Some products may last longer than others when considering the use-life and replacement turnaround time of specific products. For those products you may be selling on a repetitive or ongoing basis, smart packaging integration can better prepare customers for times when they are ready to purchase product replacements. The more intuitive your platform is for supplying customers with the resources and information they need to efficiently and effectively access product information when they need it, the better chance you have of establishing an ongoing relationship with your customer.

Digitized access to product information can additionally provide the opportunity for customers to better browse additional purchase options, alternatives, and product compliments. Unless the consumer makes the decision to extensively research your company and product offerings, smart packaging can do this work for them, offering a selection of other products they’re likely to consider purchasing, based on their past purchase and browsing information.

A wonderful way to get customers to buy more is to put more in front of them that they’re likely to buy. For complimentary sales, smart packaging allows the consumer to be directed to related products that can make their complete shopping experience more comprehensive, and take less time.

3. Shoppertainment Integration

As previously mentioned, consumers now have relatively high expectations for their engagement with marketing content. An oversaturation of the retail space with flashy marketing content in addition to shorter attention spans as a result of the high-rates of device engagement has transformed the way marketing campaigns must cater to their targeted audiences. Traditional packaging solutions lack the ability to adequately or successfully educate consumers on products and their companies, related to the static nature of print packaging. Digitizing the education process makes products more intriguing, thereby also allowing product and company information to be updated on an ongoing basis, rather than information becoming stagnant or irrelevant as the product ages over time.

One of the most fascinating, engaging, and useful components of smart packaging is the ability for augmented reality features to make prospective product purchases seem more tactile and attractive to consumers. Generally, a business that provides highly standardized product options with consumer options to customize, sees the most success.

Consumers are seeking ways to put their personal signature on the items that they purchase, and ultimately are much more likely to make purchases when they can alter the product in some way to fit their specific circumstances and tastes. Customization can include a wide variety of product variables depending on the specific product, including the selection option of different colors, patterns, sizes, and fits for individuals of all backgrounds.

This can be taken a step further with the use of smart devices, allowing consumers to “try-on” or “try-out” products in their space, before they even make the purchase. Whether purchasing new makeup or a new shirt, smart device camera capabilities can help customers to find, customize, and try out products from the comfort of their home. For items such as furniture, home goods, and art, augmented reality capabilities can place objects in the room right before your consumers’ eyes, without having to buy the item first. For items such as makeup or clothing, individuals are able to see what they look like with a specific shade of lipstick, what they might look like in a particular shirt size. All of these help to ensure that customers make the right purchase the first time, without the need, hassle, and frustration of returning products after purchase. This could lead to efficiency gains for all parties involved in the process.

Not only will these augmented reality capabilities help consumers to make better purchasing decisions, but they’ll be able to browse a wider selection of products, with the potential to upsell, or sell multiple products than they may have initially thought they needed. These intuitive features allow customers to have a more personal relationship with the products they’re considering buying, without needing to travel to brick and mortar locations to physically try on, or visualize products before ultimately making the decision to purchase them. This is especially an added benefit in the current state of shopping experiences as a result of the Covid-19 health crisis, and the increased desire for consumers to make purchases from the safety of their homes.

4.First-Party Data On Consumer Purchases and Interactions

Smart packaging doesn’t only revolutionize the marketing experience for the consumer. The companies utilizing smart packaging technologies are just as easily able to benefit from the increased capabilities of tying consumers to products and companies through smart devices. Consumer and product trends are immense sources of data for companies looking to optimize their sales processes. Traceability components allow companies to follow the journey of a product from a manufacturer, all the way to the point the product reaches the hand of the consumer.

Previous packaging solutions rendered product tracing virtually impossible. With smart packaging, businesses are given a much fuller picture of the product journey. For example, once products reach the retail space after being sold, it can be extremely difficult to collect information on product sales: who is purchasing the products? Which products are selling more successfully than others? At what point are consumers more likely to make purchases of certain items as opposed to others? What other products are certain target markets more likely to purchase in complement with other products? The questions that smart packaging can help you to answer are about as endless as the data you are able to process and understand throughout the product’s entire life cycle.

Not only will you find better insight into the behavior of your customers, but you’ll be able to use this information to provide the most enjoyable and customizable experience possible for them. In the same way that social media marketing is able to target specific market audiences at times and places when they’re most likely to make purchases, smart-packaging can be used to better align client tastes with the content and products they’re digitally engaging with and likely to make purchases from.

5. Upselling and Cross-Selling

As any business knows, well-oiled marketing initiatives go further than selling single products. Successful business plans are based on finding additional opportunities to solve consumer wants, expectations, or problems. Why should a customer only be purchasing a pair of shoes from you, when they are looking to buy a new coat and a pair of pants as well? Why should a customer buy a plain pair of shoes when they can customize them with the laces, colors, and finishes that make the product a more attractive buy for them?

Smart packaging isn’t just about providing more information to the consumer about a specific product, but it’s about providing them with an easy-to-use platform that helps them to understand all the options that are available to them. Customers need to be convinced that paying more for additional features with an alternative product will be worth it. They also need to be convinced that additional purchases will help to make their buying experience easier, as a one-stop-shop for all their needs at one time. Smart packaging gives companies the ability to better put themselves in the head of consumers, understanding their needs, and offering solutions to those needs as they become apparent.

Smart Packaging is the Future

The future of marketing and packaging will continue to shift and develop, and smart-packaging is taking up a large part of the developing marketing space. With Covid-19 exacerbating already present trends toward increased technological and remote engagement with business processes and consumer interactions, smart packaging has revolutionized the way consumers relate to the products they are buying every day.

Whether by providing easy consumer access to company and product information, increasing service opportunities available to consumers, better engaging them with an entertaining and experiential sales process, collecting more detailed information on consumer behavior and trends, or expanding the products consumers will consider to buy through their shopping experience, smart packaging will continue to re-imagine the relationship that consumers maintain with the products and companies that they know and love.