Everything to Know About Smart Packaging: Definition, Examples, and Tips
Smart packaging is a type of product packaging that uses interactive technology to improve the customer experience. Here's everything you need to know.
By Francesca Nicasio — 24 August, 2022
When it comes to product packaging, there is a lot to consider beyond just the aesthetics. Branding is but one crucial feature of packaging design.
Beyond it, packaging serves to protect the product and improve the customer experience. As technology has enhanced every aspect of our lives, it has also boosted packaging efficiency and functionality.
Smart packaging solutions are on the rise. Already in 2020, this industry was worth $38.16 billion. By 2026, it is expected to grow 4.15% to reach $48.72 billion. Thanks to the pandemic, parcel deliveries are the preference, and innovation here is certain to expand.
For businesses across varied sectors, the packaging market has huge benefits. This guide will explore everything you need to know about smart packaging including examples of how it is being used today, and tips on how your business can make the most of this innovative technology.
What is smart packaging?
Smart packaging is a type of product packaging that uses interactive technology to improve the customer experience and also often the efficiency of the supply chain. It offers more than just basic protection and branding.
What is intelligent packaging?
When researching smart packaging, the term "intelligent packaging" comes up a lot. Sometimes smart packaging and intelligent packaging are used interchangeably, but this could be misleading.
Smart packaging is the overall term for any packaging that uses interactive technology for the purposes mentioned above. Intelligent packaging is a type of smart packaging to further focus on a specific application. All smart packaging fits under two subcategories:
- Intelligent packaging
- Active packaging.
Intelligent packaging is a type of smart packaging that uses information and communication technologies (ICTs) to monitor the condition of a product. This can include internet of things (IoT) technologies. However, it does not actively interact with the product or environment.
This data can be used for several purposes, such as:
- To verify the authenticity of a product
- To track the location of a product
- To monitor the condition of a product
- To provide information to consumers.
Active packaging, alternatively, is a type of smart packaging that uses interactive technology to actively affect the product or environment. It may or may not be used for data collection purposes.
This can take many forms, such as:
- Controlling moisture levels
- Regulating oxygen and carbon dioxide levels with oxygen absorbers
- Controlling the temperature
- Killing bacteria with antimicrobial packaging
- Extending a product's shelf life.
Some active packaging examples include:
- Modified atmosphere packaging (MAP)
- Controlled atmosphere packaging (CAP)
- Active film packaging
- Intelligent skin packaging
- Time-temperature indicator labels (TTIs)
- Reversible indicator labels (RILs).
To recap, smart packaging is the umbrella term encompassing all types of tech-enhanced packaging. Active and intelligent packaging are subcategories explaining the type of smart packaging.
7 common packaging applications
Going deeper, we have further subcategories that refer to the various applications of these types of packaging. The most common include:
1. Freshness packaging
The freshness packaging system extends the shelf life of food and beverages. It does this by using materials that absorb ethylene gas, a ripening agent. This helps to keep fruits and vegetables fresh for longer periods.
Smart packaging type: active.
2. Reusable packaging
This type of smart packaging is for customers who want to be more sustainable. It can be used multiple times as it's made from recycled materials. It may track the environmental impact of that packaging by monitoring where it ends up and encouraging that it goes back to be reused.
Smart packaging type: intelligent.
3. Connected packaging
Connected packaging uses technology to connect the product to the internet. This allows for things like NFC tags, QR codes, or barcodes to connect the product to digital content. This might include a link to a website, social media profile, review site, or augmented reality campaign. It can also be used for things like inventory tracking and product authentication.
Smart packaging type: intelligent.
4. Security packaging
Security packaging protects consumer goods from tampering or counterfeiting. It often includes features like tamper-evident seals or RFID tags.
Smart packaging type: intelligent.
5. Shelf-Life extension packaging
Shelf-life extension packaging is designed to prolong the shelf life of a product. It does this by using materials that can absorb or release moisture, oxygen, or other gases. This type of packaging can also be used in healthcare to transport products that require controlled atmospheric environments.
Smart packaging type: active.
6. Smart labels
A smart label is a type of label that uses technology to provide more information about the product. This can include things like QR codes or NFC tags.
Smart packaging type: intelligent.
7. Tracking and tracing packaging
This type of packaging uses RFID tags or other tracking devices to track the movement of a product through the supply chain. This information can be used to improve the efficiency of the supply chain or to prevent theft.
Smart packaging type: intelligent.
The benefits of smart packaging
Looking at the uses, it's easy to identify some of the benefits, but it's worth reiterating them to emphasize what's really to gain by adopting new smart packaging techniques.
1. Reducing product spoilage and waste
By using time-temperature indicators, businesses can control food safety by tracking whether a product has been exposed to conditions that may make it unsafe. This is often used in the food and beverage industry but has applications for other sectors, too, such as pharmaceuticals and cosmetics.
2. Quality control
Using track and trace packaging, businesses can monitor the movement of their products through the supply chain. This helps to ensure that products are not tampered with and that they arrive at their destination in good condition.
3. Product authentication
Smart labels can be used to authenticate products. This is often done using RFID tags or QR codes that can be scanned to verify that the product is genuine.
4. Increasing sales
Using RFID tags, businesses can track products as they move through the supply chain. This data can then be used to improve stock management and forecast future demand. As a result, businesses can reduce the number of out-of-stock items, to improve and increase sales.
Initiatives with QR codes can also help to increase sales by providing customers with additional product information, such as recipes (for food products), how-to videos, or even special offers and discount codes.
5. Improving the customer experience
Methods like QR codes and NFC tags can be used to provide customers with product information, such as nutrition facts, product origins, or even how to recycle the packaging. This helps to improve the customer's digital experience by making it easier for them to make informed choices and purchase products that they feel good about.
6. Reducing packaging costs
One of the most obvious benefits of smart packaging is its ability to reduce packaging costs. Using RFID tags, for example, businesses can track inventory levels in real-time. This information can then be used to minimize overstocking and reduce the number of packaging materials needed.
Examples of smart packaging in use
Now that we've gone over the different types and applications of smart packaging let's take a look at some examples of it in use.
1. Coca-Cola
Coca-Cola is an innovative company always looking to increase profits and engage new audiences through smarter packaging techniques. In-house they use tech to track their products through the supply chain. On the consumer-facing side, they have embraced QR codes to onboard new demographics. The latest initiative by the soda giant uses QR codes to encourage new consumers in the gaming demographic to buy Coke. Their incentive is to scan the QR code for the chance to win prizes such as Xbox Game Passes and gaming headsets.
2. Nestle
Nestle has invested greatly in reusable packaging, leveraging smart packaging practices to track the life cycle of their product packaging and ensure that they are recycled properly. The specifics are yet to be made public, but innovation in smart packaging is essential to reach the company's goals.
3. Amazon
Using Jabil Packaging Solutions, Amazon is leading packaging innovation with a progressive, auto-replenish software solution. Using sensor technology, wireless communication, and the tried and true Amazon supply chain superiority, they are using smart packaging to enable automatic rendering to their third-party providers through a program called Dash.
4. Hungry Jack's
In Australia, Burger King's equivalent, Hungry Jack's has launched a second smart packaging initiative with the card game UNO, with great success. In a cross-brand collaboration, the fast food brand used QR codes and app innovation in their food packaging. Consumers scan and enter to win prizes from UNO, and both brands benefit from amplified consumer engagement.
Tips for adopting smart packaging
Although the case studies above relate to multinational corporations, there are many ways small to medium businesses can go about implementing smart packaging into their business model.
Active packaging may not be a high priority for most SMEs, but customer engagement, tracking, and traceability are all extremely valuable initiatives to help boost sales and improve internal efficiencies.
1. Use QR codes
One of the simplest ways to get started with smart packaging is to use QR codes on your products. You can use them to provide information about your product or as a way to enter customers into competitions. With QR codes, customers not only engage more with the brand. They give you a way to gather data, learn more about your audience and use that to improve your offering. Learn more about the uses of QR codes for marketing campaigns here.
2. Use NFC tags
NFC tags are a newer technology that offers a lot of potential for smart packaging. It works with the same near-field communication technology as your bank card or mobile wallet. Customers can tap their smartphone to the NFC tag to get more information about your product. So far, the applications for NFC tags are very similar to QR codes but lesser known by consumers.
3. Use recyclable packaging
Recyclable packaging and parcel coatings can reduce your environmental impact and save on packaging costs. You can also use recycled materials to create new packaging, which can be used to promote your brand. Recyclable packaging could go back to your business for reuse, it could be simply recyclable, or the packaging design could be such that consumers can reuse it.
4. Use sustainable packaging
Sustainable packaging is good for the environment and can help you reduce your carbon footprint. Sustainable packaging options include using recycled materials, biodegradable materials, or compostable materials.
5. Use data analytics
No matter what kind of smart packaging technology you're using, if consumers are scanning or you're tracking, use the data you collect. Smart packaging enables you to capture so much information. With this, you can improve your marketing, communications, engagement, and supply chain.
6. Implement a trial
If you're on the fence about smart packaging or aren't sure if it's going to benefit your business, the best approach is to give it a trial. We recommend:
- Setting up a strategy to execute over a three-month period
- Apply it to just a small segment of your operation
- Work out how you will track the results
- Set up a framework to get feedback from your stakeholders and customers
- Review the results
- Iron out any kinks
- Roll out across the business once you know what works for your business.
7. Follow the latest trends
Smart packaging, like all technological innovations, is an ever-evolving field. If you want to be relevant to your market, you need to keep up with the latest trends. The applications for QR codes are getting more exciting by the day. The materials used in sustainable or recyclable packaging are getting cheaper and more practical all the time. It pays to keep your eyes on the packaging industry and how smart packaging is being used by businesses big and small.
Wrapping it up
noissue and tapkit are all that you need to get started with smart packaging that is sustainable, recyclable, beautiful, and engaging. We specialize in customized packaging solutions that impress customers and make everyone feel good about their minimal environmental impact.
To learn how you can amplify your brand and sales with smart packaging, check out noissue's QR code compatible packaging today.