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How smart packaging will change the retail industry

Every industry is currently undergoing a shift with the roll-out of 5G networks and smart technologies. The retail and packaging industries are no exception; smart solutions are changing the way products are packaged, transported and displayed on shelves. Smart packaging is starting to revolutionise the retail sector, which holds many benefits for brands and consumers.

Smart technologies have really taken off during the last decade. Smartphones, internet access, interconnectivity and augmented reality have taken a firm hold in modern society. Even watches have become smart devices that can access the internet and many other applications. In a similar fashion, the role of packaging is no longer just about product protection and brand differentiation. Smart packaging is more customisable, traceable, sustainable and secure.

Two categories of smart packaging

Smart packaging falls into two categories; active and intelligent. Active smart packaging has the ability to interact with the contents within. This can improve shelf-life and the quality of the product during storage and display. Materials such as light filters, oxygen absorbers, antimicrobial coatings and moisture regulators can be incorporated into the packaging or inserted along with the product inside.

Intelligent smart packaging is able to communicate with other digital devices and the internet. This is achieved through various sensors, indicators and microchips within the packaging. This enables brands to access information and activate marketing promotions remotely. Scannable QR codes, LED lights, augmented reality (AR), near-field communication (NFC), digital screen and audio speakers can also be implemented on intelligent packaging.

These intelligent systems allow the consumer to engage with the product in remarkable new ways. AR is being used as a way to create virtual tours of the manufacturing facility, brewery or distillery. Virtual representations of the product in different environments can be viewed on the consumer’s smartphone. Instruction guides and tutorial videos can be accessed by scanning QR codes on the packaging.

Smart packaging has four functions

Smart packaging allows large amounts of data to be collected and transferred from across the supply chain. It enables better security, protection, product quality and sales use. There are four major functions of smart packaging, which explain why it is in high demand by brands and retailers around the world. 

1. Smart packaging improves protection and security

Some brands have started to use smart packaging for improved security of their products. Electronic sensors can transmit a signal when the package is opened before reaching its intended destination. In addition, GPS transmitters can allow the brand to track batches of their products around the globe during shipment. These solutions prevent unauthorised tampering during delivery and transport.

2. Smart packaging improves interaction

The interaction between the consumer and a brand is vital for trust and loyalty to be established. Smart packaging facilitates this interaction in an easier way and allows the consumer to access online tutorials, infographics, product information and design features. This brings consumers closer to the product and can encourage personal interaction on social media platforms.

3. Smart packaging makes products easier to use

Packaging can now play an integral role in the use of the products contained within. Smart packaging enables a user-friendly guide to product use and can deliver better customer feedback for a brand. Digital instructions can be accessed when a photo of the packaging is taken on a smartphone camera. By understanding a product better, the consumer will be happier with the purchase and more likely to support the brand in the future.

4. Smart packaging improves agility

These solutions can also optimise supply chain processes and improve the agility of brands in the next digital era. Smart packaging can facilitate improved project planning and inventory management for retailers, brands and warehouses. The product and packaging journey throughout the entire supply chain, from design and production to shipment and delivery, can be tracked by a brand. Improvements to the processes can be made upon reviewing the data.

Consumers will soon demand smart packaging

As with many technological breakthroughs, such as the mobile phone, smart packaging will soon become commonplace and highly sought-after by consumers. AR and NFC are already being used in the packaging industry, but other smart technologies will begin to feature on packaging. Consumers will realise the benefits that these technologies have for their use of a product or its quality.

Industry experts are in agreement that the need for information will not slow down. Packaging that enables access to more information will be well-received by consumers and this communication capability will change the way products are distributed, stored and sold. Modern consumers will certainly be willing to make use of smart packaging, as long as the process remains simple and fast.

Smart technologies will change the packaging and retail industries, there is no question about it. This means that packaging is no longer solely focussed on protection and brand differentiation; it now serves to enable several other functions for brands, transport companies, retailers and consumers.

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Written by Joshua Oates

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