Connected Packaging/Labels, UIDs & Digital Transformation

Today, connected packaging/labels related digital transformation is typically seeing double digit annual growth across:
• Multiple vertical markets
• Multiple functionalities & business processes (creating ever more compelling business cases & ROIs for brand owners).

The new Vandagraf report looks deep into the complexities of this new reality by analysing this very fast evolving landscape. By identifying new high-growth opportunities & future trends, the findings of this report can support readers in navigating this multi-facetted & changing world of connected packaging & digital transformation. Our research has resulted in the identification of numerous very significant business opportunities (as well as some threats) across a number of industries - both at scale & niche for:
• brand owners
• retailers
• healthcare
• Other…..

New opportunities are being fuelled by the commercialisation of multiple exponentially more powerful technologies that can be linked & leveraged with connected packaging & digital transformation. Leading to corresponding opportunities for solution providers of several distinct types:
• suppliers of UID Devices - Wireless electronic and/or optical printed
• packaging/labels converters (primary item level / secondary, tertiary levels) – Carriers of Unique Identification (UID) codes
• developers of data management, analytics software, dedicated digital platform software
• developers of Artificial Intelligence (AI) & Machine Learning (ML) solutions
• developers of AR (Augmented Reality) solutions.
• other…….

Numerous companies (brand owners, retailers, healthcare, packaging/labels converters) have already gotten involved with innovative connected packaging/labels solutions – And these activities are described in detail in the Vandagraf report – Case Studies.

To link connected packaging/labels to the outside world, there exist several families of mature data carrier communication technology options:
• wireless electronic (e.g. RFID RAIN, NFC, Dual frequency, BLE, printed electronics
• printed, optically read codes (QR / 2D / linear barcodes / digital watermarks) – Overt or covert.

As well as some other approaches, for example: Touch Activated digitalised packaging/labels. Incorporating such devices into packaging/labels enables connectivity to the digital world via a smartphone (*) or dedicated reader. (*) The ubiquity of smartphones today means that consumers are able to capture UIDs on packaging/labels according to individual smartphone capabilities.

Mass consumer empowerment was historically not an option because consumers did not carry personal readers (i.e. smartphones) in their pockets or handbags. Smartphones have enabled consumer identification of UID codes while also offering high levels of security, with reliability & robustness. An on-packaging/label carrier of the UID can be verified either by texting it via SMS. It is generally easier to justify higher value wireless devices on premium products that have a higher unit cost, such as, luxury products, alcoholic drinks, personal care products & the like, as well as healthcare products.

• Specialty products – RAIN RFID / NFC - Higher unit cost - shorter production runs – can meet requirements for special features / functionalities
• Commodity products – Optical printed solutions (incl QR codes & digital watermarking) - Lower unit cost - longer production runs - More basic connectivity / less functionality

Although much higher cost than printable codes, wireless / electronic devices offer significantly greater functionality and interactivity, together with other advantages. Optical printed solutions in general are better placed to meet price-sensitive connected packaging/labels applications criteria for lower price point (commodity) branded products. The trend to low-cost optical solutions has been accelerated by dramatic growth in the usage of QR codes globally. Optical solutions are popular particularly for limited performance requirement consumer engagement applications, such as loyalty programmes, coupons, special offers and the like. The middle ground – ‘grey areas’ - between specialty & commodity product categories are likely to see the fiercest competition between electronic / wireless, optical & other technologies.