Rob Hollands, MD, SharpEnd outlines the opportunities and watchouts for brands looking to engage consumers through connected packaging.

Effective packaging

This article is part of a series of articles from the WARC Guide to effective packaging.

We have reached a pivotal moment in the history of connected packaging. We’ve experienced a rapid increase in awareness and adoption of QR and NFC technology by consumers. This has been driven through improved technology integration by the smartphone manufacturers (nearly all Apple and Android devices natively scan both) as well as increased use during the pandemic. Additionally, across our connected packaging programs, for brands such as Malibu, PepsiCo and LYFT, we’ve seen an average engagement rate (scan/tap rate) of 15% with users showing a high propensity to share first-party data (average 25%).

Indeed, a large European, NFC-enabled connected packaging campaign, running this summer in lockdown in the CPG industry, saw an engagement rate of 15.1% (unique product scans) with 21% of those consumers completing a full registration – 42.8% tapped twice or more and each spent an average of 2 minutes 59 seconds on the experience.

And marketers are waking up to the opportunity. In Europe, the food industry alone produces over 1.13 trillion pieces of packaging each year, making it the biggest owned media channel in a brand’s marketing toolbox.

Critically in a world where brands increasingly compete with big data organisations like Amazon, connected packaging provides marketers with a vital strategic tool – consumer data – empowering them to understand who buys and uses their products.

A way to deepen consumer engagement

Savvy brands are using connected packaging to deepen consumer engagement in rapidly changing markets. Böen Wines, keen to engage US consumers as more people shift to purchasing wine for 'at home consumption', launched a connected packaging programme that could be unlocked through an app-less experience on their smartphones. Wine drinkers can tap the cap to discover more about the wine, provenance and food pairings. During lockdown, there was a 29.7% increase in NFC 'taps' with engagement increasing from 58 seconds in February to 1 minute 53 seconds in March.

Similarly, LYFT, Scandinavia's leading brand of nicotine products, (a new tobacco-free, smoke-free way of consuming nicotine) used limited edition connected packs for its 'tap the can' campaign. Consumers could unlock rewards and receive personalised music mixes through the NFC-enabled packaging.

Pic caption: LYFT is creating interest and engagement around a new market with connected packaging

Meanwhile, a partnership between fashion brands Ganni and Levi's on a rental-only capsule collection used a connected back-patch so renters could unlock the history of each garment and access storytelling including campaign shoots, style inspiration, and content from the #GANNIGirls who rented it before them.

Pic caption: LEVI's and Ganni's rental-only capsule collection uses NFC tags to deepen consumer engagement

Six watchouts for brands

1. Packaging is not an island

Don't treat connected packaging as an isolated channel. Success lies in supporting connected packaging campaigns with other media. For example, Levi’s and Ganni used brand influencers on Instagram to demonstrate the experience of renting their new capsule collection, which led to increased engagement. The industry is still maturing, and consumers need to be educated.

2. Be agile

Don't overthink getting something out to market. It doesn't need to be deeply integrated into the supply chain immediately. Instead, take an agile approach – pilot quickly, get it out to market, test and learn, and scale up from there.

3. Use call to action

A call to action on the packaging is essential. Brands need to tell a consumer there's something to do and explain how to do it.

4. Measure objectives

From the outset, brands should set KPI’s and objectives. Setting media benchmarks compared to another media channel can be helpful. Equate a scan to a banner click, what's the comparable rate? Then you can set a value to it...

5. Data has a value exchange

Offer consumers a relevant, valuable experience for engaging with packaging and sharing their data. It has to be something they wouldn't get through other channels. For example, don't send consumers through to something they can reach easily anyway like an Instagram page.

6. Reassure consumers

As this is still an emerging industry, brands must allay any fears and reassure consumers about privacy. For example, scanning a QR code doesn't mean a brand can track consumers.