Digital Packaging: Providing New Opportunities for Growth

As many of us are all too aware, major brands are reporting slow, to no growth. Over a 12-month period, 62 of the top 100 brands reported a decline of 4.4%, while 90 of the top 100 brands lost market share within their category overall.

With slow growth, there’s consolidation, as we’ve seen with the downsizing of staff at various CPGs. Also with increased acquisitions, there is a focus on cost cutting as apposed to growth.

In the meantime, we’re in a revolution in terms of smartphone usage. For millennials in particular, the smartphone is the remote for their lives, bringing them any information they desire. What’s that music? Shazam it. Need a ride to the airport? Uber. But how are consumers using their smartphone in the retail space?

In a recent BrandSquare webinar, Digimarc’s CMO, Larry Logan presented on how to win customer loyalty through digitally empowered packaging.

“There’s billions wasted in media advertising,” says Logan, “to which we would add, all the more reason for packaging to win at the shelf, and provide new opportunities for growth.”

Watch the entire webinar here: Winning Consumer Loyalty Through Digitally Empowered Packaging  

97% of the Gen Y generation uses a smartphone while shopping in-store, and with phones handy, it’s not surprising that 73% of them are willing to scan products to help them with their shopping choices. In the past, that would have meant scanning for pricing, but now what we’re seeing is a year-over-year shift of 30% toward seeking out inspiration and ideas.

In a survey Digimarc conducted with the Harris Poll of 2,000 shoppers over the age of 18, 85% of U.S. adults say reading a product package in store helps them make a purchase decision.

The average consumer seeks upwards to 15 separate items related to health and wellness on a package. 75% of consumers are more likely to research and purchase items online if they do not get that information. So, there’s a risk of interrupting the sale. Having consumers go online, they might choose a different retailer, but they might also choose a different product. Today’s mobilizers want more information, but there are a few challenges with delivering the content they crave.

Quite simply, packaging real estate is becoming exhausted. Much of the space is reserved for regulatory or legal disclaimers, and not what consumers necessarily desire. Consumers are now looking far beyond taste, and instead looking into how and where products are grown, the social impact, and how it will affect their health and safety.

Theses trends span all ages, incomes, geography, gender, and product categories. In certain categories, consumers are seeking smaller packages for convenience and for on-the-go situations. This presents a challenge for packagers, as they are still required to include all necessary information on a much smaller space.

With European discount chains entering the U.S., domestic growers will be under increasing pressure to match them with operational efficiency. This is packaging for one of those chains, 6 barcodes, one for each side:

With more barcodes, packaging moves faster at checkout, delivering more items per minute. This is a huge benefit to the retailer, where “items per minute scanned” is a key metric. But obviously, the UPC symbology is huge and is eating into the real estate. If you’re a brand manager or a designer, you should be worried as this trend continues, and what compromises it will mean for your designs.

A digital link from the package to richer content can satisfy this consumer quest for more information. The most common two approaches are UPC codes and QR codes. When scanning a UPC code with a shopper app, consumers presume this information comes from the brand, but the information could just as likely be crowd sourced and out of date, or totally inaccurate. It’s not necessarily authenticated by the brand.

QR codes are functional, although millennials have a mixed response. And that’s because when seen on airport posters and everywhere else, they associate a QR code with being sold something. But the biggest issue for brands is the precious real estate and most designers loathe incorporating additional visual symbologies into their designs.

In any event these codes are artifacts from an earlier time, 40 years ago, when machine devices required visual codes. With today’s smartphones and scanners, that is no longer the case.

With the Digimarc Barcode, the same information is taken from the UPC code and replicated hundreds of times, over a surface of a package. In essence, the graphics of the package is the signal, without the need for special inks.

The image on the left is merely for illustration purposes. The density of codes is actually greater than shown here and the code has no discernible features such as these zebra stripes. When the artwork package is enhanced, the designer will note a subtle difference, as they know their packaging so well. However, to the consumer, the effect is imperceptible as shown on the right.

What this means for retailers, is the package doesn’t have to be rotated to try to align the UPC code to the scanner. The package can now scan at any angle, delivering faster checkout and easier self-checkout for consumers. When consumers point their phones at the same package, they can access brand-authenticated content such as health programs, how-to videos, SmartLabel content, and coupons or promotions. The content can be updated in minutes, offering a dynamic and flexible consumer experience.

READ: The Connected Package: The Next Generation in Brand Efficiency, Interaction and Appeal  

The digital, Connected Package is a smart way to future-proof your packaging. It’s always on, always network enabled, working 24/7. The linked content can be dynamically updated, instantly accommodating a change in campaigns or providing new content without the cost of new packaging. With all the benefits of the Connected Package, a modern package design is not complete without it. For more information on the Digimarc Barcode, visit: https://www.digimarc.com