Connected Packaging 101

Jenny Stanley, MD at Appetive Creative, offers an exhaustive guide to connected packaging. 

From checking into venues, and ordering food and drink in restaurants, to logging into online accounts, scanning QR codes has become second nature to consumers. Already utilised by brands on packaging, from wine and soft drinks to milk and yoghurt, the humble QR code has become a stalwart tool for marketers.

Packaging is extremely targeted marketing. It’s a direct gateway to a customer who has already bought the product or is in the store aisle about to buy something similar. Most consumables are never decanted, so the packaging it’s bought in becomes part of the consumer’s ongoing engagement and experience with the product and the brand. It’s marketing that keeps on communicating throughout the duration of the product use. Making the packing ‘smart’ or ‘connected’ utilising a QR code gives it a much longer shelf-life versus other media channels.

Why it matters
Market Research Future (MRFR) estimates the Smart Packaging Market to be worth $61.91bn by 2027. The market was valued at $39.82bn in 2020. Importantly, connected packaging drives sales and high consumer engagement. Tetra Pak claims that connected experiences deliver a 20 per cent increase in sales. Connected packaging campaigns regularly generate a 14 per cent scan rate/clickthrough rate (CTR), much higher than a digital advertising campaign (usually around 0.01 per cent CTR). It’s not only impactful, but also cost effective. The average cost per digital advertising click is £1.50, whereas a ‘click’ or scan on packaging is technically ‘free’, giving brands a compelling reason to use connected packaging. 

How does a QR code on packaging work?
For many consumers, the packaging is the first touchpoint of buying or using a product. Connected packaging leverages unique QR codes, NFC chips, barcodes found on the packaging.

By scanning the code using a smartphone camera, users are taken to a browser-based app, offering product information, discount codes, competitions and interactive games or augmented reality (AR) experiences. 

From interactive games and fun competitions, vouchers and prizes, data collection and information sharing, connected packaging encourages customer loyalty and repeat visits, and delivers a direct interactive relationship between brands and its customers.

Why connected packaging?
The different layers of data connected packaging can deliver, from age, gender, and location to product preferences, can help brands build a unique and in-depth picture of consumer behaviours. This insight can be invaluable, assisting brands to better understand their target audiences, but also reach them more efficiently, building engagement. Whether that is younger, mobile-first audiences, or vertical-specific product fans, this data and analysis can guide both product and marketing strategies, harnessed through smart product packaging.

Connected packaging is a great way to share key product information, or inspiration in the form of product recipes and how to videos. It can be used to track supply chain information for imported food or food safety details for food-facing safety concerns. Marketing campaigns can also be carried out via connected packaging to inform new product development or help improve an advertising campaign. The content can also be updated easily. It can be used as a loyalty card and to collect and redeem sampling vouchers. It’s an incredibly versatile media channel – as well as being agile, responsive, and able to deliver customer data in real-time.

How should a connected experience look?
Connected packaging works best as part of a wider marketing campaign to drive customers to the web-based app experience for more information or benefits, for example vouchers or prizes.

Connected packaging can be used to engage, entertain and incentivise consumers to purchase

Our work often utilises competitions, which can be very sticky and encourage customer loyalty and repeat visits, but there are so many other opportunities. These include tutorials or virtual product testing for beauty products, market research using questions and polls targeted directly at customers and sharing product instructions, for example how to take a medicine or how to use personal care products such as teeth whitening strips or face masks. We have also been helping brands communicate their sustainability goals or programs through connected packaging, educating, and involving the consumer in the sustainability-focused campaign.

The benefit of connected packaging is that it’s accessible in any language, any nation, at any time – all you need is a mobile device. There’s no need to download an app or any software.

It’s incredibly important to adapt connected experiences to the culture and customers in each market. We work closely with the client leads in those markets to ensure our content and copy is aligned to cultural norms and taps into popular local market trends.

 Why it matters
1. Its Customer-centric
Connected packaging is all about customers. Nowadays, netizens are becoming increasingly privacy-wary, major browsers have restricted third-party cookies and intermediaries like supermarkets sitting between consumer brands and their consumers. Connected packaging has introduced a new way for brands to engage directly with customers through the digital experiences directly offered by brands. It also enables brands to collect data during the process to help them understand and communicate better, and build better relationships with customers.

Customer-centric advertising has been made possible. Allowing brands to have a deeper understanding about their customers means marketing messages can be optimised, targeted and tailored. Brands can find out exactly what their customers want, and track a range of data including how and when they’re using the product and where they’re buying it. With the target audience easily accessible, it’s also a valuable tool for market research and production innovation too.

2. It removes all barriers to entry
Connected packaging? Gamification? You are probably thinking about app-based experiences that are not affordable or too complicated. In fact, regardless of how time-consuming and expensive it is to develop an app, customers are less willing to download a brand app, which requires data to download and takes up space on their phone.

But don’t worry, connected packaging is for everyone. Digital experiences can be as simple as creating a series of QR codes and hosting a virtual experience on a browser, depending on what you are looking to achieve. No time-consuming downloads needed.

3. Education and brand awareness
Connected packaging creates experiences that educate customers about the brands and the products, which results in a brand awareness boost.

For example, Appetite Creative works with Tetra Pak, the multinational food packaging and processing company. From QR codes on the packaging to an eco-themed mobile quiz, the activity educates customers on Tetra Pak’s environmental impact and its sustainability work. Not only do customers understand Tetra Pak’s approach to sustainability and the environment, but the campaign also allows the company to collect customer data including the location of QR codes scanned, time, day, size of the package purchased, even the store itself.

Additionally, we are able to link together pieces of data and understand which brands are more recycling conscious, which regions of the country or countries as a whole are more educated around sustainability.  Not only do these experiences help educate the audience, but also the brands in how to position their messaging.

4. Boost engagement and brand loyalty
Through connected packaging, customers are engaged in the entertaining and rewarding connected experiences, from games and quizzes, to videos and recipes, sometimes even pledges. They are rewarded through discount codes for future purchases. The engagement leads to a deeper connection between customers and brands, as customers appreciate being involved and understood, and come back for more. In fact, according to a study in 2018, customer brand engagement does have a positive influence on brand loyalty.

5. Drive revenue
The digital experiences, whether it’s a quiz or a game, usually involve vouchers as prizes. Customers are incentivised to spend more with coupons or discount codes, which in turn ramps up revenues for companies.

Bacardi, the spirits brand well-known for its white rum, was looking for some extra help to make a lasting impression on customers. In response to Bacardi’s challenge, Appetite Creative created a gorgeous-looking rum shack experience in conjunction with Shazam. The app included a host of engaging activities, offering a chance to win a bottle of Bacardi or a voucher to redeem for a mojito in participating bars. As a result, 12 bottles of rum and over 900 mojitos were given away. Users were immersed in the Bacardi brand throughout the customer journey, online and offline. While having free drinks, people consumed other Bacardi products and built brand loyalty along the way, revenue was driven up as an unsurprising “side effect”.

6. Data
Serialised or unique codes on connected packaging open up bigger opportunities for brands to understand consumers and their behaviour at scale.

Serialised codes also offer the opportunity to be able to identify logistics and distributor information. Brand logistics teams have the ability to understand the entire product journey, from the time of packing the product, to the amount of time it takes to end up in a consumers hand.

Loyalty programs are not a new marketing tool but they are very effective in collecting purchase information. By utilising connected packaging, instead of relying on data from retailers, over a relatively short period of time brands will not only be able to understand consumer profiles and purchase behaviour from a historical point of view, but also use that data to predict trends, consumer behaviour and patterns across purchase cycles. This will allow them to anticipate and better serve the needs of their customers. QR codes are a powerful marketing tool often left lying dormant in the marketers toolbox.

The essentials – how to make the most out of connected packaging

1. Link to the right audience with the right gamification strategy
Different target audiences are attracted to different connected experiences. Brands need to be clear about their demographics, psychographics, and behavioural segmentations of customers, to ensure they choose the right strategy for the target group.

Starbucks for example, ran a campaign targeting consumers between the age of 18-35, who tend to use their mobile single-handed when drinking coffees. Appetite Creative developed the cup flip game, particularly appealing to millennial consumers, in which a user could, with one hand, attempt the tricky task of flipping an instantly recognisable Starbucks cup.

The campaign turned out to be successful, with an average 30-second dwell time. On top of the dwell time, we also saw 90 per cent engagement rate and an average of 60 seconds engagement time per user. Voucher download targets were smashed by over 110 per cent.

2. Use the right technology to deliver your message
When it comes to mobile use, older people are probably not the first audience that comes to mind, but roughly one-third (32 per cent) of seniors own a tablet computer in the US, according to a recent study by Pew Research Center.

That is to say, when brands decide which audience to target, they also have to take the technology and the users of that technology into account, including which screen size to target, mobile, tablet, etc.

3. Set clear objectives
The data that can be collected during a digital campaign can vary from personal information about consumers such as age and gender, to dwell time, including location, peak hour and duration of the engagement, to product-related information, such as favourite products and or flavour, and even social media preferences.

However, brands need to be sure about what data they would like to collect from consumers at the outset, which involves having clear objectives. Belated changes might involve difficult trade-offs once the digital experience has been created and implemented.

4. Ensure you use supporting social media
Another critical point before kicking off a campaign, is that customers need to be aware of the existence of digital campaigns, and they should know how to use them. This is where social media can help. Social media posts shared by the brand, which could be short educational videos for example, can demonstrate how connected packaging works, how to scan a product and start the digital experience. Customers will be able to take the first step into the digital campaign and start to have conversations with friends about it too. 

Brands need to enable the social media sharing feature and make sure that customers are incentivised to use social media to support the campaign. Activating rewards such as coupon or discount codes after sharing always helps, as customers will be encouraged to share it with their friends and family to give the campaign another push.

Connected packaging watchouts

  • Target the right audience with the right gamification strategy and technology. The crucial first step is to be clear about the objectives and target audience, then use the technology and develop the gamification strategy aligned to these needs.

  • Dont fall into the trap of thinking connected packaging means app-based experiences – it can be simple and affordable.

  • Be crystal clear about what you would like to know about your customers and make sure you have everything agreed before the digital campaign goes live. Once it does, there is no going back.

  • Take full advantage of social media. While it functions as a communication channel where brands can educate consumers, the prevalence of the digital campaign also requires thousands of shares on social media, neither of these can be overlooked

Case Study
At Appetite Creative, we’ve certainly seen a significant increase in the adoption of connected packaging. The combination of QR code popularity and rising recognition of its value has, in my view, created a tipping point for connected packaging. In fact, in the summer we had our most successful connected packaging campaign ever with a popular dairy food and beverages brand.

The campaign looked to raise awareness of a milk and fruit drink range as families returned to school and offices in September. Reconnecting with customers, the game aimed to encourage them to make the healthy and wholesome range of drinks a lunchbox staple.

The interactive connected experience included fun games the whole family could enjoy. A 2D ‘School Run’ racing game which had to be completed before then accessing a 3D augmented reality (AR) three level jump game ‘What’s in my Lunchbox?’ with shareable AR selfie filters and a leader board so players could get competitive.

The web-based app tracks real-time interaction, such as flavour scanned, average engagement time, location, scan rate, number of visitors, return visitors and social media shares, to enable the brand to optimise marketing. 

The results were outstanding – with over 97,000 scans and 9,900 Registrations. Over 8,500 people took selfies, with 3,200 sharing them on social media. WhatsApp was the most popular place to share, with a 67 per cent share rate. The average time spent was over two and half minutes, showing that customers enjoyed the experience, with less than 1 per cent bounce rate (usually over 30 per cent). This showed that most users engaged with the app, and it achieved a 70 per cent engagement rate. The number of users doubled from September to October as word about the games spread. In fact, the link to the connected experience app was shared over 3,200 times, showing incredible word of mouth and the positive impact of a supporting social media campaign.

So, what did we learn from this campaign, why was it successful, and what could we have done better?

Takeaways
In my view, there are five key takeaways for this connected experience campaign.

1. Locking the AR game encouraged longer dwell time on the app – and gave an  incentive to complete the first game and get to the next one. We discovered that users found this a little frustrating and as the AR game offered special features. If it had been unlocked from the outset so users could pick which game to play, the completion rate of both games would have been higher and the AR selfie shares too.

2. In my experience, prizes still offer a very compelling incentive for people to click on a link and play a game or access a connected experience. In fact, they triple scan rates and quadruple rescan rates. In this instance, no prizes were used so engagement, while good, could have been significantly improved.

3. The campaign was widely supported on social and in-store, which made a huge difference to the number of users and shareability. In this instance, the brand used impactful in-store promotion to educate customers about the connected experience and how to access it – and then reiterated the messages widely via social media. 

Too often connected experiences are used in silo but when they’re included as one media channel of many within a wider media campaign, the results show a demonstrable step-change with long lasting value.

4. Real time data collected gave the brand the opportunity to see which products were most or less popular – and which ones needed an extra push on social media. The insights gave the brand a never-before-accessed opportunity to adapt and optimise its advertising and in-store campaign in real-time across all channels aligned to customer behaviour and preferences.

5. We discovered that the race game had the lowest completion rate, indicating that it’s important to keep the games short. In my view, one long game and two short games offer the best experience to keep customers engaged, but not fatigued, with the experience.

Consumers now see QR codes as a normal way to access branded content, games, and experiences – and they’re happy to share their personal data in exchange for this value add. Combined with the rise of connected packaging experiences, brands are increasing their investment in this supercharged media channel like never before, and the results are impressive. Don’t get left behind – try out connected packaging today…

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