Smart packaging is value added packaging where the packaging creates a ‘digital bridge function’: Consumers, social media channels, retailers, and manufacturers are connected. Not only does smart packaging enhance supply chain visibility but paves the way for various new functions in the packaging. A personal touch that is individualized can be added to the packaging with such solutions. Such an approach enables better digital engagement.
Smart packaging is part of a holistic approach by contemporary brands where connectivity is being built into nearly everything that they make. Presently, there are two types of smart packaging that are active and intelligent packaging. Active packaging is about adding specific components in the packaging to enhance the product’s shelf life and quality. Whereas, packaging that can perform specific intelligent functions like sense an attribute of the product or immediate environment is called intelligent packaging . An example of this is packaging that can sense temperature and communicate it to the user. Whereas connected packaging is a popular type of intelligent packaging.
As per Zion Market Research, by 2024, the smart packaging global market is estimated to reach $48 billion in volumes. Based on insights, let’s delve into how the smart packaging market with connected technologies is set to change in 2021.
Building better experiences
Many brands today are exploring the idea of connecting products with the packaging. The end goal of such products is to create delightful experiences that transcend the value proposition offered the by product itself. As per an article, manufacturers like Tetra Pak are using this as an opportunity to weave cutting-edge customer experiences where packaging acts as a full-fledged digital tool and data carrier.
As per Forbes, PepsiCo is leveraging smart packaging to enhance the user experiences of their products. A code from specially market PepCoin bottles can be entered by consumers to avail packages of Frito-Lay snacks on their phones. Sometimes, a cash reward can be triggered by the code which is redeemed via popular payment gateways like Venmo or Paypal. Ergo, PepsiCo is using smart packaging to surprise, intrigue, and delight its customers.
Avon’s packaging solution is another great example. The company has a popular skincare product range called the Anew Reversalist Infinite Effects Night Treatment Cream. There are two different creams in this product that consumers have to switch to ever week. Such an approach prevents the skin from adapting to the cream and let’s consumers garner the maximum benefits. By adding connectivity to its smart packaging, users get a reminder about switching the cream at the right intervals. Such a personalized approach enables better customer retention for the brand, in the long-run.
Advent of connected packaging
The shelf life of consumables is limited and many brands therefore choose to connect the packaging instead of the product. As per Research and Markets, in 2020, the smart packaging market was valued at 38.16 billion. The market is expected to grow at a CAGR of 4.15 and is expected to reach USD 48.72 billion over a 7-year forecast period. Apart from the connectivity on offer, the ability top carve personalized experiences for consumers is a big driver towards the adoption of smart packaging. Smartphones shall enable users to leverage the personalized data gathered by a smart solution to unlock value added benefits like coupons, personalized rewards, and loyalty points. A whole new dimension is added via an effective connected packaging solution to end-user experiences.
Smart packaging shall be especially useful in the healthcare sector where precision inhalers, smart medical sprays, and smart pills will lead to a sea change in healthcare outcomes. Even beauty products and herbal products can use connectivity for value added function such as reminders or for the purpose of tracking. The possibilities for creative smart packaging are endless and we have just hit the tip of the proverbial iceberg.
The changing lifestyle and expectation of consumers in current times is a major driver for smart packaging solutions. With more players having a stronger digital presence, there is increased scope for leveraging smart packaging solutions to enthral new markets. Despite these strong growth drivers, the increased capital and R&D investment coupled with a lack of widespread consumer awareness can act as barriers to growth.