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The COVID-19 pandemic has brought enormous challenges to the consumer industry in unprecedented ways, and for consumer brands it has raised two particularly profound issues: first, in a world of e-commerce and on-demand experiences, the need to connect with consumers more directly has become critical, while lockdowns and retail closures have made attracting and holding shoppers' attention more competitive than ever. Second, consumer and regulatory demands for transparency about products, provenance and ingredients have become more urgent and more complex.

FMCG brands are increasingly adopting one solution to gain more control over their relationships with consumers: connected packaging, which allows shoppers to interact with products by pointing a smartphone at a code printed on the packaging. The code provides access to information, personalized digital experiences and e-commerce information, and enables consumers to interact with products both in store at the point of purchase and after purchase once the goods have been delivered.

Because brands themselves usually control product packaging and labels, interactive codes - typically QR codes used in conjunction with a product cloud platform to control experiences and collect data - establish a first-party connection between brands and consumers that is independent of retail channels, giving brands the ability to collect data directly from consumers and to influence and initiate transactions.

In the United States and Canada, more than 60 FMCG companies, including Colgate-Palmolive, Nestlé, Procter & Gamble and Unilever, now give shoppers access to product information through a digital tool called SmartLabel. Launched in 2015 by a trading-partner alliance created by the Consumer Brands Association and the Food Marketing Institute, the tool gives consumers easy, instant access to detailed information on the food and beverage, household, pet care and personal care products of hundreds of participating brands.

This early mover in the use of QR codes on packaging seems likely to merge with the GS1 Digital Link standard first introduced in 2018. GS1 is an upgrade to the traditional one-dimensional barcode standard used at the point of sale, and relies on QR codes to enable consumer smartphones and point-of-sale systems to interact with packaging.

The Consumer Goods Forum, a powerful pre-competitive platform whose members include Nestlé, Procter & Gamble, Unilever and many other top consumer brands, confirmed at its annual global summit last month its intention to apply product digitization to end-to-end traceability and to improve consumer access to information and brand connection.

British consumer goods company Reckitt Benckiser is a UK-headquartered global consumer brand owner with a 200-year history and some of the most trusted consumer health, hygiene and nutrition brands, including Wizard, Calgon, Durex, Mead Johnson, Lysol and Woolite. The company is rolling out connected packaging as "always-on" media across its portfolio. Recently, its global head of brand experience and design, Jos Harrison, shared how Reckitt plans to use the packaging.

Reckitt is in the middle of a shift in user experience models. When interacting with brands, consumers are more eager than ever for more detailed information and more personalized experiences. The FMCG industry is no exception, and Reckitt sees a huge opportunity to serve its customers better by providing on-demand information and services through connected packaging. Reckitt currently uses it for its Wizard and Lysol brands and is extending the program to other brands.

Connected packaging has a wide variety of use cases, from simply providing information to facilitating customized services. The packaging itself is present from the consumer's first in-store encounter with a product throughout its use cycle, and as long as the mechanism is simple and the value exchange is clear, it becomes a perfect entry point for users to connect with a brand or product, relevant to the individual shopper.

In hygiene and home care, Reckitt brands are the first choice for many people, especially now, when consumers want product information that both helps them make purchasing decisions and ensures they can use products correctly to give themselves and their families as much protection as possible. To date, Reckitt's focus has been on providing consumers with relevant and actionable information. The key is to understand users' needs well enough to give them a compelling reason to connect - and then to make sure the promise of relevance and value is delivered.

FMCG brands have already seen varying degrees of shopper engagement with connected packaging. Some product categories that might previously have been considered "low engagement", such as cleaning, laundry and home care products, have recently seen a significant increase in the number of users engaging with packaging. As people become more aware of the way they clean and disinfect their homes, they show a greater desire to know about the ingredients of the cleaning products they use. As a result, Reckitt has seen increased interaction with packaging not only among tech-savvy millennials and Gen Z, who might be expected to be more willing to adopt new ways of engaging with technology, but also among older shoppers, and the trend is not even limited to developed markets.

Over the next few years, Reckitt plans to implement connected packaging across all of its global brands, delivering richer, more context-driven digital experiences throughout a product's entire use cycle. Ultimately, this should create a platform for our brands to help more people in more ways, providing increasingly personalized experiences that go beyond the product into multi-touchpoint solutions that meet their everyday needs.

Reckitt's move into connected packaging is helping the company build consumer relationships and connectivity, which in turn further influences shopper behavior. Unilever has likewise begun deploying connected packaging. While some brands are using it to add traffic to their own e-commerce platforms, others are using the connection with consumers to route products directly to local or regional retail or e-commerce partners.

These efforts may help such companies avoid an outcome similar to what private consumer brand owner Mars experienced a few years ago when it sought to expand its pet care e-commerce subscription business. The group, reported to own nearly 50 pet health and nutrition brands, was developing pet product subscription programs and was involved with Amazon's subscription service.

Amazon began rolling out its own subscription pet care business in 2018 and launched Wag, its own private-label dog food, exclusively for Prime members. The end result was that Amazon essentially took over Mars Petcare and used its own scale and pricing power to further expand its category share. A survey by market research firm Packaged Facts found that in the first quarter of 2018 Amazon accounted for 55% of online pet product traffic, followed by Chewy at 26%, PetSmart at 19%, Petco at 17% and Walmart Sam's Club at 14%.

The COVID-19 pandemic has driven enormous innovation in the retail experience, from click-and-collect to in-store ordering for home delivery, and connected packaging is helping brands enhance these offerings and manage their retail channel mix. For example, Puma is now using connected packaging to let shoppers in its US stores interact with products for richer content experiences and to interact with products after purchase in order to reorder and buy refills. By creating tools that play a role in initiating and directing transactions to e-commerce or logistics partners, brands can reduce risk and lower customer acquisition costs.

Another impact of the global health crisis on retail is increased consumer and regulatory demand for transparency. For example, consumer awareness of and concern about food safety and sustainability in the supply chain have risen sharply. A recent survey of 14,000 consumers in 18 countries by taste and nutrition company Kerry Group found that, following the pandemic, more than 60% of consumers are more concerned about food safety and 49% now consider sustainability when buying food and beverages.

Amid these concerns, the US FDA recently announced that it is working to "create a safer, more digital, traceable food system", with the ultimate goal of reducing foodborne illness. The FDA's "New Era of Smarter Food Safety" blueprint for the next 10 years foreshadows an environment in which US consumers can directly access trusted information about the origins of their food.

Meanwhile, in Europe, retail giant Carrefour is using product engagement to provide consumers with recycling information, and the EU is exploring a "digital product passport" to improve data sharing between manufacturers and recyclers for circular programs such as packaging and bottle returns.

Advances in digital printing speed and cost efficiency mean that even mass-market items can now carry digital engagement codes. For example, SABMiller uses interactive codes on beer cans in consumer loyalty programs in sub-Saharan Africa.

——This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-378152.html