While not necessarily a new technology, QR codes continue to change the way consumer packaged goods companies approach their marketing. With the newly added complications of the Covid-19 pandemic in the retail space, it’s never been more advantageous for marketing teams to take advantage of QR code packaging. QR codes have allowed for contactless deliveries and exchanges of products purchased by consumers, which is incredibly invaluable in the current public health climate. Not only is it beneficial for the customer, but companies are able to better track specific analytics and indicators such as demographic information of their customers.
So how have QR codes evolved over the years, and what new capabilities do they present to CPG marketers?
The Evolution of QR Codes
As is expected, QR codes evolved out of the introduction of barcode technology in the second half of the twentieth century, as a result of the cumbersome process of cashiers individually typing in numbers as guests made purchases. While developments in the POS processes made sales processes more efficient, one of the main problems was presented by the limiting capabilities of allowing only 20 alphanumeric characters to be conveyed through barcodes. Thus, the development of the QR code allowed for the communication of more in-depth information since codes became 2-dimensional rather than 1-dimensional barcodes. Developments lead to the capability of including 7,000 numerals instead of 20, and was additionally much faster to scan and process than traditional barcodes.
Abbreviated for its “quick response,” the QR code was officially released in 1994 after many years of development, trial, and error. QR codes were officially developed by Masahiro Hara for the Japanese company Denso Wave. The technology was quickly picked up by many industries including the auto industry and was quick to integrate transparency and tracking technologies for consumers who were becoming increasingly critical of where products and materials were sourced, especially with food, beverage, and drug products. With the original market stemming from Japan, the technology was quick to expand throughout the Asian Pacific, including countries such as China and South Korea. The decision was made for the use of QR code technology to be freely available for public use, which also led to its explosive use in the coming years in the Asian Pacific region.
Global Expansion and Use Today
QR codes have been used globally since the early 2000s, and have since developed to integrate accommodations for a number of technological features including micro QR codes for small packaging, FrameQR which allowed the integration of illustrations into QR code packaging, and native phone camera QR code scanning capabilities making the use of these codes largely accessible to the everyday consumer. Since the initial introduction of the technology stemmed from the Asian Pacific, it is these areas that have seen the most integration of the codes overall, with Western nations just recently beginning to adopt the extensive features of what QR codes can afford their users. For example, the Chinese multi-purpose messaging, social media, and mobile payment app WeChat has led to the explosive use of the technology, amounting to $1.65 Trillion in Chinese transactions in 2016 alone.
Ultimately, developments have helped to make the code useful in ways customizable to each individual company. From 2020 to 2024, the smart packaging and QR code industry is expected to grow by $20 Billion. From 2018 to 2019 alone, QR code interactions grew by 44%, which was before Covid-19 led to a much larger push for the integration of a contactless purchase process. 2020 has already seen over a 50% increase in the use of QR codes with direct mail products as compared to 2019. In the current economic climate, QR code can be applied to a number of new marketing solutions that have revolutionized the packaging industry as we have seen it in recent years.
Marketing Applications for QR Codes
Marketing has been transformed through the integration of QR codes into smart packaging in a number of ways. With or without the challenges presented by Covid-19, consumers continue to demand more seamless and accessible information from the companies and products they engage with. The field of marketing has undergone a number of significant changes that allow them to form more individualized and personalized relationships with their customers, which in turn provides them with much more information about their consumers and the transaction process.
By providing their customers with a wider wealth of information and easier access to this information through the use of QR codes, CPG companies are able to develop more personal relationships with their customers. With a societal transition of increased pressure put on businesses to disclose information as to the source of product materials and labor, having relationships with consumers based on trust has never been more critical. Consumers are extremely conscious of the environmental impact that products and companies have on the world around them, just as they are conscious of the economic implications of exploiting periphery nations’ wealth of cheap labor and supplies in our continually globalized economy.
Consumer trust is just as important in the era of Covid-19, where limited information is known by the general public as to the ability of the virus to transmit on various surfaces, as well as the potential Covid implications of products consumers are purchasing from large packaging or manufacturing facilities. Many markets and manufacturers have needed to shut down as a result of safety concerns or virus outbreaks which are all of viable and critical concern to the general public who is consuming the products stemming from these facilities. QR codes grant consumers the transparency and trust to make purchases without fear that the purchase could be detrimental to their own health, or the health of those involved in the process of bringing said products into their hands.
QR technology has also started to revolutionize the way consumers think about authentication. Gone are the days where we need to remember countless password and email combinations to gain access to our accounts. By simply scanning a QR code with an account user’s camera phone, consumers are able to access their accounts without hassle, thereby also leading to increased account security. Codes have also opened the door to a wide range of possibilities in coupon coding, allowing consumers the ability to easily access coupons, while still ensuring the integrity of one-time redeemable coupons for the businesses issuing them.
Creating a Brand Narrative
Rather than letting the store environment that the consumer buys the product from be the determining factor of the brand message that consumers receive, QR codes give a hands-on approach to the brand story that is conveyed. Ultimately, the information that is conveyed through traditional product packaging is relatively uniform, and unlikely to be a point of excitement or focus for easily distractible and overly stimulated every-day consumers. QR codes are customizable in shape, size, and color which can be aligned with company branding to reflect any number of tones and messages ranging from formal, funky, simple, or extravagant.
The importance of phones in the lives of everyday consumers can not be understated, which is an important tactic in the use and implementation of QR codes. Having the ability to scan a code with a phone camera (without the need to download a 3rd party app), has ultimately made the technology a savvy and modern way to catch the attention of generations now akin to the capabilities and ease of smartphones and devices. In China, the technology has been taken to the next level, with 50% of smartphone users scanning QR codes multiple times per week.When customers are taken to an engaging webpage or video after scanning their QR code, you are able to more successfully communicate advertising information and entertainment without the consumer feel that they are being barraged by advertisements in order to gain access to online videos, music, or other digital content (which is now relatively standard).
Leaving a Breadcrumb Trail
The ability of QR codes to bridge your customers with your company and information is limited only by the capabilities you are able to imagine. Since consumers are able to connect their personal smart devices and cameras with QR codes, if you are able to get consumers to scan your product, there’s any number of digital pathways you can launch them down to strengthen your communication and relationship with them.
One of the more popularly used functions is simply directing the consumer to your company website, however, this is just one of many functions that you could take advantage of. Since the QR code is linked to the consumer’s phone, you also have the ability to let the code scan lead them to platforms to call, text, or email your business. QR codes can also be used to direct consumers to a company app, your company’s location, company social media pages, or any current or relevant discounts or codes. No matter how you choose to integrate your consumer with your company through QR codes, all will be helpful in establishing a personal relationship with the consumer, conveying the brand story that your company specifically chooses.
Real-Time Campaign Tracking
Tracking is one of the most important aspects of marketing for understanding and improving campaign success. Tracking allows you to see what you’re doing right and what you’re doing wrong with a specific campaign in order to make changes that will benefit its efficiency. Since consumers are automatically linking their information from their smart device to the product when the QR code is scanned, this is able to provide your company with a wealth of new information that wasn’t traditionally available with the sale of products through traditional barcode and POS systems.
When customers scan the codes on their products, you have access to more specific information on the consumer including where they are located, when the most scans take place, as well as what devices scans take place from. This data can help to reveal trends on where future marketing initiatives should take place, more specific details on who your demographic market is, and ways to improve smart product packaging so that customers are more likely to engage with the product and brand.
For many years, QR codes presented a specific challenge with relation to the fact that once the QR code was printed, the information that could be communicated through the code was quite static. The development of dynamic QR codes has changed this reality, allowing companies to customize, tweak, or altogether change the information or link that a QR code brings their customers to. This is a wonderful development for companies that seek the opportunity to provide and present relevant ongoing and updatable information to their customers, thereby establishing a more effective and dynamic relationship with the consumer.
Examples of QR Code Marketing Integration
We’ve gone through some general descriptions of the developing implications QR codes have for CPG marketing, but what are some more concrete examples of applications of this technology in the marketing processes of companies today? Luckily, the capabilities are quite extensive, and can be customized to the exact vision and strategy of your marketing initiatives. In 2020 alone, more than 26 Million smartphone users will scan a QR code in Southeast Asia and India alone. Following are a list of a few more concrete examples of the ways QR codes have been leveraged to reinvent a more simple and comprehensive process for the ways by which consumers engage with the product sale process, which doesn’t always involve placing QR codes directly on product packaging.
App Downloads and Redirects
The makeup company L’Oreal recently teamed up with the company Glamour to place QR code advertisements in taxis that directed customers to videos and content relating to product use. The code also directed consumers to the company website, which in turn helped to increase the download of the company app by 80%.
Many other companies have joined the trend of integrating QR codes into their apps for more efficient and effective transaction processes. Starbucks has integrated the use of QR codes into their app as an alternative to traditional payment, which allows customers to purchase their beverages without physical contact (an invaluable service in the Covid-19 era). Starbucks has also integrated the use of QR codes into print and outdoor advertisements, all of which have increased the company’s sales since the initial integration of the technology. PayPal is another company that has integrated the use of QR codes into its business platform, allowing users to more easily send and receive payments to one another through contactless scanning. What many of these QR code integrations have in common is the increased ease of user interface, which ultimately makes it more convenient and less of a hassle for the user to spend money on products or services.
Speeding Things Up
Several companies have integrated QR code technology to improve sales process efficiency and accessibility for consumers facing increasingly stringent time constraints with personal and professional commitments. By the end of 2020, Vietnam is scheduled to make the switch to almost entirely virtual payments, much of which is being powered by the integration of QR code technologies. British Airways and many other airlines have begun printing QR codes on flight tickets for priority check-in systems which has made the timeline for flight check-in much shorter in a space that’s infamous for long lines and waiting periods.
Ikea has also utilized QR code technologies to speed up the customer checkout process. The use of QR codes on product packaging has been paired with the home furnishing company’s app, which allows customers to scan the products they are purchasing as they go rather than at a register at the end. Customers are then able to pay for the scanned items through the app, which limits waiting times to virtually none.
Bridging Web Access to Augmented Reality
QR codes continue to expand their capabilities on a virtually yearly basis. Most recently accessing augmented reality (AR) technology was only capable through the download of company apps. With the simple scan of a QR code with their phones, consumers are launched into a whole new world of capabilities, bringing digital environments to life in front of their eyes through the use of their camera lense.
Some of these capabilities might include the ability for consumers to “try on” or “try out” clothing, makeup, or furniture on themselves or in their home. Others might include the ability to travel to another place or space, bringing career fairs, corporate events, and quite literally immersive events into the hands and eyes of phone users. Still, others may hope to use AR to bring a simple business card, brochure, or other marketing material to life, allowing users to view moving photos, personalized video messages, and interactive buttons directing them to any number of company related sites or content.
Some consumer goods companies haven’t yet taken the leap into including modern methods of QR Code implementation because they think it is either complex or expensive to do so. That’s where CSCONNECT comes in. We made QR Codes easily accessible to CPG companies through an intuitive software built for CPG brands. Schedule a demo today to learn more!