Packaging is a crucial element in elevating brands and connecting with consumers, as it serves not only to protect the product but also to communicate the brand’s identity and quality (think of Coca Cola’s iconic glass bottle with the red label and the distinctive fonts).  It creates meaningful connections with consumers by evoking positive emotions and trust in both the product and the brand.  

Interactive packaging, often referred to as intelligent or smart packaging, incorporates technologies such as QR codes, RFID and e-paper displays to build trust in the quality of the product and to create an engaging experience that goes beyond traditional packaging. Although there are longer term innovations around incorporating technologies into the packaging material, the most direct, immediate strategy is through smart labels, as they allow for a smoother transition – they are an add-on that can be more easily integrated into the secondary of primary package.

Smart Labels offer a range of benefits for consumers, brand owners and retailers.

Benefits for Consumers

On-product smart labels can be a good alternative for keeping people informed, for example, about expiration dates, by combining labels with smart sensors that detect when food or medicine is unsafe to consume. Overall, there are multiple ways consumers may benefit from smart labels, as they can potentially provide:

• Information Access: Interactive packaging provide consumers with detailed information about the product, in real time, including ingredients, usage instructions, origin, and sustainability practices, helping them make informed decisions.

• Safety and Quality Assurance: Features like time temperature indicators (TTIs) or e-paper displays can assure consumers that the product has been stored and handled properly throughout the value chain, enhancing trust in the product’s safety and quality.

• Convenience: Easy access to information and interactive features can streamline the shopping and usage experience.

• Personalized Experience: Augmented reality and NFC tags can offer personalized content, such as tailored recipes, usage tips, or exclusive promotions, strengthening the consumer’s connection with the brand.

Benefits for Brand Owners

For brands, using smart labels brings benefits across the entire supply chain of the product. By being able to track the entire journey of a product, monitor temperature and exposure to shocks, or confirm if products have passed all quality control stages on the production line, smart labels offer brand owners the possibility to significantly optimize their production and shipping processes, potentially reducing costs, waste and carbon footprint.

Other benefits for brand owners include:

• Brand Differentiation: Interactive packaging can set a brand apart from competitors by offering a unique and engaging consumer experience.

• Consumer Engagement: By providing interactive and personalized content, brands can foster deeper connections with consumers, leading to increased brand loyalty and repeat purchase.

• Data Collection: Technologies like NFC and QR codes can collect data on consumer interactions, providing valuable insights into consumer behavior and preferences.

• Marketing Opportunities: Interactive packaging can serve as a direct marketing tool, delivering promotions, new product announcements, and other marketing content, directly to consumers.

• Authenticity and Brand Value Protection: smart labels that include unique authenticity and anti-counterfeit features provide strengthen consumer trust and continue to be a driver for brands to invest in smarter packaging.

Benefits for Retailers

In a world where online shopping has seen a boom, retailers active in the offline environment – that sell through stores – need all the extra-value adding support they can get to stand out and keep loyal and engaged customers. By shifting to smart labels, retailers benefit from a wide range of benefits related to:

• Inventory Management: RFID tags enable real-time tracking of products, improving inventory accuracy (reducing the risk of stockouts or overstocking).

• Shrinkage: Enhanced tracking capabilities can help reduce losses due to theft, spoilage, or misplacement.

• Customer Experience: Providing consumers with interactive and informative packaging can enhance the shopping experience, increase sales and customer satisfaction and loyalty.

• Supply Chain: Interactive packaging can improve supply chain visibility and efficiency, reducing delays and improving overall logistics.

The case of smart expiration date labels for food makes a perfect example for how retailers can provide their customers with a new, improved product experience, while also reducing waste-related costs. By combining smart labels with intelligent sensors, the labels or the packaging of the product can inform both retailers and consumers about the actual status of the food, in-real-time, eliminating misleading terms like “best by” and minimizing the waste of perfectly safe to consume food products.  

Enabling Technologies for Smart Labels

A wide range of technologies can be used, alone or combined, to make smart labels a reality. From simple QR (Quick-Response) codes to more complex labels that may integrate sensors, chips, RFID (Radio Frequency Identification) and e-paper displays, there is a wide range of technologies enabling smart labels.

QR Codes, Augmented Reality and NFC (Near Field Communication) are three examples of on-product technologies that can connect the consumer to websites or apps, allowing access to additional product information, loyalty programs or promotional content. But having to download an app or take out the smartphone for each product interaction is an increasingly significant barrier for consumers to engage with such solutions.  

What stands out as a potentially transformative set of enabling technologies for the advancement of smart labels are Flexible and Printed Electronics. Printed components such as sensors, power sources, printed circuits, antennas, logic, and e-paper displays lay the groundwork for a new generation of smart labels that operate independently of smartphones. This is important because of the increasing smartphone fatigue and app saturation users can experience. Digital displays that provide a more natural, intuitive visual interface to physical products, may enhance consumer interaction with the product, while ensuring real-time information is being delivered to the consumer. The integration of on-product interactivity and functionalities through printed electronics has the potential to transform traditional labels into intelligent interfaces, offering real-time data and improved user experiences.  

Two important examples that already use printed electronics technologies, combined with traditional electronics, are RFID labels, which enable real-time tracking of products throughout the supply chain and provide inventory management solutions, and TTIs (Time Temperature Indicators), which show whether a product has been exposed to undesirable temperatures, thereby ensuring product safety and quality.

Conclusion

Smart labels are indeed a significant trend in the packaging industry. Additional functionalities beyond RFID (like sensors and displays) are required to take products and packaging to the next level, benefitting all players in the value chain. For consumers, it offers enhanced information, safety, and a personalized experience. Brand owners gain differentiation, increased engagement, data collection, and new marketing opportunities. Retailers benefit from improved inventory management, reduced shrinkage, enhanced customer experience, and a more efficient supply chain.

To date, the main challenge to adoption of smart packaging solutions is the cost of the added technology per unit of product. With rapid advancement of printed electronics and information technology (i.e. internet and smartphones) the physical to digital bridge is within reach.    

In addition, the sustainability and compatibility with the circular economy of products are becoming more and more important, and have been receiving increased attention. The electronics industry alone generates more than 50 million tons of e-waste globally per year. Again, printed electronics offers significant advantages with regards to sustainability, as compared to traditional electronics, which will be a key factor in bringing smart packaging solutions to the market.  

Overall, we see the shift to smart packaging solutions as the future of the packaging industry, where sustainability and access to data will make brands stand out in front of their customers. Printed electronics may play a leading role as a set of key enabling technologies to realize the future of smart packaging, as printing allows for cost-effective, low power, thin and flexible, easy to integrate, sustainable and highly scalable solutions.