A few weeks ago we attended the AIPIA (Active & Intelligent Packaging Industry Association) World Congress in Amsterdam and one of the opening remarks made was: the technology for connected packaging has been available for some time now and it’s only more recently that brands have stopped watching from the sidelines and taking the plunge into enabling connected packaging for their products.
While there have been some early adopters in the space piloting some innovative projects in the past few years, the bulk of consumer brands and manufacturing companies have preferred a watch and wait approach with various concerns about initiating their own transitions from traditional packaging and systems to connected packaging and smart data driven systems. Many of which were valid concerns given IoT smart products and active / intelligent packaging is still fairly new as a key area of technology and rapidly evolving and changing every few weeks. During our conversations with various stakeholders of the industry there, two thoughts appeared unanimous:
- Connected packaging & digitalization of products / smart products is undoubtedly the way forward for all brands that are to compete in the current digitally connected world and is here to stay.
- The question is no longer if and when brands and manufacturers will invest in connected packaging but how to go about it in a smart way so as to address the concerns they may have and do it “the right way” so it can scale without hurdles and road blocks in future as the technologies themselves, continue to evolve.
As a technology enabler that has been working on both the technology side as well as understanding the business side and requirements of CPG brands and their product lifecycles, here are some of the top factors to consider (and concerns they address) while making the right choices and getting connected packaging technology right from the get-go:
Centralization Vs Decentralized Systems for Connected Packaging Applications
Consumer transparency, product information delivery, e-labeling, traceablity, product authentication and counterfeit prevention, consumer engagement, loyalty management, waste management, consumer feedback loops, augmented reality, re-ordering & supply chain optimization…these are just some of the many application areas of connected packaging. With multiple individual technology solutions available for each one of these, the concern for brands is “how many different vendors and solutions will we have to manage?”. While each application area has its own set of requirements and merits, managing having product data fragmented across different software systems has its own set of challenges. “How will we ensure data integrity across all these?” “How can we synchronize updates to product data simultaneously on all these different systems?”. From that perspective, centralization of the product / item data makes sense long term. The way we picture it is: when a physical product is manufactured and rolls off the production line, simultaneously a digital twin / digital record for that product should also be generated and tagged to the physical product. As the product rolls off the line and journeys through its lifecycle, through the supply chain, the consumer and beyond, that product is interacted with by multiple connected devices and data about the product is constantly being updated or read via the digital twin via connected devices and the various applications. This approach allows you to first connect the product, give it a digital life alongside its physical one and then build various applications and business processes on top of it rather than a decentralized approach.
Being Immune from Technology Shifts to Activation Tags & Triggers on the Packaging.
Not very long ago, the humble UPC/EAN/GTIN 2D barcode was the only activation trigger on product packaging. You now have barcodes, datamatrix codes, QR codes, NFC tags, RFID labels, databar, invisible markers, nanoparticle markers, temperature sensors, spoilage sensors, package anti-tampering sensors and a range of different activations and triggers on the packaging. The larger concern is the rapid evolution of technologies and arrival of new ones hitting the market every few months. How do you know which one is going to stand the test of time? One of the smart moves in getting connected packaging right is to decouple the triggers or activation technologies from the product data or software system. Each of these activation tags usually have an identifier which can be used to tie it to the data. If the trigger changes in future, the flexibility to de-link it from the earlier tag and connect it to a new tag using the identifier is inherent. Whereas in a tightly bound system where the tag on the packaging and the software are linked, that flexibility to be immune to changes in tags and activation technology is lost.
Flexible Architecture That Can Keep Up with the Pace of Change
Change is inevitable and nowhere does it hold more true than the consumer products industry. Requirements within the industries, regulations, compliance rules, data systems, standards for technology all change and get updated faster than ever before. Very often, before a company finally rolls out updates to the their system, the next change has come along sending them back to square one. The software systems used for connected packaging need to factor into their architecture this constant need for updates and changes. The flexibility to update the data model, extend attributes, maintain different versions, control the flow of data, accessibility of data and address changes in business systems, regulation or the real world are essential to deploying a connected packaging solution that can keep up with change and endure.
Ease of Integration & the API Ecosystem
Often decision makers seek out a one-stop solution provider for a specific application or solution to a challenge. For example, counterfeit prevention. This may work well as an approach for a small business but a mid-sized or large organization has highly complex systems with multiple stakeholders, systems and moving parts that need to come together when it comes to product related data systems. Manufacturing IDs and data related to products may reside in SAP or an ERP system. Ingredient information about the product in a PIM software, labeling information in another location, marketing related images and content elsewhere and so on. As a result, ease of integration with other systems both internal for gathering item related data required for connected packaging applications as well as external applications is important to factor in. Any system you select should offer API connectivity to other systems to bring in data or serve data to other systems in order to integrate seamlessly with existing systems and be compatible with the API ecosystem which is really the backbone of digitization and data today.
Phasing Connected Packaging Projects & Scalability
Connected pakaging is not a single project or end goal with a limited time line. It’s an enabler for several applications, use cases and smarter more intelligent business systems as the organization moves ahead. Getting the foundations for the system in place first along with infrastructure and processes in place first allows you to phase different applications, pilot projects individually and then scale rapidly. For example, a brand can start with enabling their packaging to deliver e-labels and instructions on how to use the product to start with. As a second phase, use the packaging to enable digital warranty activation and later push out engagement via contests as a third phase. With initiatives such as the GS1 Digital Link, a single trigger on the packaging or a single QR code would soon be able to trigger multiple interactions with the product depending on who is scanning it, where they scan it from and other contexts. This would eliminate the need to print different triggers on the packaging every time a new interaction is introduced. The right connected packaging technology selection should enable an organization to deploy different interactions and applications connected to the product in a phased manner and also offer the infrastructure and ability to smart small, test and then scale across thousands of products, millions or billions of serial items as and when required.
All considered, in order to get connected packaging right and make the right decisions from the start, looking at connected packaging from a wide, holistic perspective complete with all the possibilities that will emerge in enabling it in a flexible way, will help invest time, money and effort the right way.
What was the last thing you bought online? Why didn’t you go to a store to buy it? Was it for the vast number of items you could scroll through before making a choice or the recommendations that the website or app pulled up for you, remembering your choices and interests from a previous visit, or the ease with which you paid for it with a card whose details were already stored with the website?
The online shopping experience is leaps and bounds ahead of the traditional experience in terms of using data and technology to provide unique and personalized customer experiences. While brick and mortar stores also have their own upsides, the move towards omni-channel retailing today is key.
So what does an omni-channel experience really mean? The term refers to merging of services and features of multiple channels in order to provide a seamless, integrated and consistent experience to users. It means bringing the best of online shopping to the physical store to enrich customer experiences and create new channels for revenue generation.
The reason that e-retailers are able to provide a vast number of superior and personalized features is because of access to a larger volume of data and analytics. Their algorithms are constantly monitoring your every step, from consideration to the point where a sale occurs. Traditional retailers need the same approach and connected products under Internet of Things provide a way to do exactly that. A digital transformation of store assets by connecting them to each other and the internet through means of sensors or digital tags (barcodes, QR codes, Datamatrix codes, NFC & RFID tags) working together with AI and cloud computing, will result in smart connected products at every point within a customer’s journey, collecting and analyzing data.
Many brands already have an online presence as well as applications from where one can directly buy their products. However, a true omni-channel retail experience is one where it works in tandem with, influences and enhances the in-store shopping experience.
A number of leading brands are also coming up with innovations to improve customer engagement and play to their expectations born from online buying habits regarding a seamless and hassle-free shopping experience. Here is a look at the areas within a brick and mortar store that could see incorporation of connected products to facilitate an omni-channel retail experience.
Analytics and personalized services and features go hand in hand together. Brands need to know about their customers in order to curate services for them. Data on a customer’s journey across the store, products they pick up or put back, keeping track of their past purchases and recommending more according to that, and extending coupons and offers specifically for them; feeding data of such nature into algorithms that perform analytics then deliver insights upon which personalized services can then be built.
Kroger has partnered up with Microsoft to roll out EDGE™ Shelves (Enhanced Display for Grocery Environment). Equipped with digital displays, these shelves promise to provide a unique guided customer experience. The solution will also utilize in-store sensors to identify individual shoppers and extend custom recommendations, promotions and offers as well as other personalized content.
Customer’s in-store journey:
The journey of a user buying things online is not too complex; browse, select, pay. If they are a regular customer, chances are the app already knows their delivery points and payment details. A similar journey is far more difficult to emulate inside a retail store. The popularity of Endless Aisles technology is a step in this direction. This technology is based on the observation of how some people fail to find a particular product in their size or colour. No problem! They can simply place an order with their specifications using an endless aisle in the form of an interactive kiosk within the store itself, and the product gets delivered at their doorstep in a couple of days. It’s a win-win situation; customers don’t leave the store unsatisfied and the retailer does not lose out on a sale.
Another feature gaining traction is “click and collect/return”, where customers can place orders through the brand website or mobile app and collect their items from a store at their own convenience.
Smartphones are everywhere and 71% of consumers use theirs to conduct research on products before buying them in-store. Retailers can capitalize on this medium’s ubiquitousness and familiarity to create a similar experience inside retail stores. Modern consumers are also more conscious of how their lifestyle choices, including products they buy and consume, impact the environment and society. Electronic labeling practices incorporating scannable QR codes, RFID tags or NFC stickers, let the customer pull up expanded product information instantly on their smartphones, presenting more than a simple ingredients list, and allowing the brand to display the entire journey of the product from its origin to the shelf. These tags can be further utilized to enrich customer experiences by providing tailor made content for a particular customer such as promotions and offers.
In-store navigation services are another example where connected smart products can contribute to unique multi-channel experiences. Retailer Target has installed store fixtures like LED lights which have built-in bluetooth beacons. Their app takes advantage of these beacons to locate users inside the store and guide them to their desired locations by pulling feed from shopping lists stored by the user on it. French Retail giant Carrefour in partnership with Philips has implemented a similar system, however using Visible Light Communication (VLC) technology instead. VLC enabled LEDs emit a code that is readable by any camera on a smartphone, connecting customers to the digital experience provided by the store through their app.
Beating the Queue
Amazon Go is the true embodiment of what a connected retail store of the future will look like. Customers in these cashierless stores need not stand in long queues for checkout as they can just grab what they wish to purchase and walk out. The exit turnstiles trigger an automatic payment from the customer’s credit card, which is already stored on the app, on leaving the store. Not only are these stores getting rid of one of the most annoying bits about shopping in a a brick and mortar store, they are also combining multiple sensors across the store to collect a treasure trove of valuable data. Weight sensors on shelves know exactly when an item is removed from the shelf, or when it is put back. Multiple cameras track and record each customer’s movements within the store. Computer vision along with intelligent algorithms combine to create a unique identification for each customer and separate them from others.
Traditional brick and mortar stores are in an urgent need to innovate in order to maintain a competitive edge by keeping up with consumer expectations and habits, which are constantly evolving thanks to e-commerce. They need to look towards Internet of Things and establish a connected and digital ecosystem within their stores which collect valuable data on their customers, data that can then be converted into smart insights, on the foundation of which smart decisions can be taken to provide sophisticated, delightful and engaging customer experiences.
We are fast moving towards a future where cities will feature hundreds and thousands of smart connected objects, talking to each other, exchanging and producing meaningful data and insights, basically reshaping the urban landscape into intelligent and autonomous systems. Internet of Things will be at the heart of this technological transformation, as sensors and digital tags will find their way into various physical city infrastructure, monitoring traffic, weather, crime and even rat infestations! However, it’s not just hardware IoT and sensors that will provide city planners and authorities to gain more visibility into the working and management of a city. Smart connected products or ordinary consumer products tagged with digital ID’s and digital twins can open up new dimensions in how we imagine Smart Cities to function.
For the sake of painting a picture of the role of connected products within Smart Cities, let’s consider a pharmaceutical company supplying critical drugs to a city. Enabling every drug product at batch and serial item level to have a digital twin of its physical self will allow for exchange of product related data to happen between manufacturer, the supply chain, the city authorities, end consumers and the products themselves. Read on to see how the pharmaceutical industry could look like in the not so distant future.
Smart Logistics & Traceability: Digitally tagged consumer products such as medical products will paint a clearer picture of each item’s journey from the manufacturing facility to the hands of a customer, resulting in intelligent movement of products characterized by autonomy. Each time a product moves, whether it’s from the factory to a truck, or from the truck to a warehouse, its location and movement will be logged against its digital twin in real time with the help of a scanner, RFID reader, smartphone or other connected devices.
So, when situations arise where brands or smart city authorities become aware of substandard or defective products in circulation, the process of factoring on the production source for them and a faster and leaner product recall will become easier by tracing back to the relevant point in the product’s journey.
Smarter Production & Distribution Channels: Smart connected products will help in procuring the right amount in the right place at the right time. Complete visibility at all events of the supply chain will allow brands to better predict demand in respective locations in a city. Better predictive ability will help them to create seamless intelligent systems capable of efficiently managing production and distribution channels, ultimately leading to reduction of wastage by preventing accumulation of unused medicines.
In fact, brands will be able to predict demand on a much larger scale than before. They will anticipate when a particular medicine is supposed to run out at the city-level and trigger production cycles for the particular product.
Smarter response to Public Health Crises: With IoT powered smart products, the engagement and the monitoring does not stop at the customer level. Even after the product leaves the shelf, customers can input valuable data through the digital twins which can be mined into to tailor smarter responses to public health emergency situations.
For example, city authorities will be aware of exactly how many medical products are in inventories across the city by keeping track of their movement across every touchpoint in the supply chain. In situations where a contagious disease breaks out, public health officials will be instantly alerted by hospitals that are also hooked onto the network. By keeping track of the quantity and location of stocks of medicines dispersed across city, public health officials will always be prepared to tackle such high priority situations as they can more efficiently assess and redirect required medicines to appropriate locations.
Even smarter, cities of the future could be prepared for seasonal illnesses by predicting their onset based on algorithms derived from a mix of data from weather forecasts, hospital reports and product supply chains.
Smarter Citizens: Digital twins will give rise to smarter citizens, who will be capable of using smartphones to digitally interact with the packaging in order to obtain accurate information pertaining to authenticity, ingredients, color-coded expiry dates, instructions for use (IFU) etc. Not only will digital twins of medical products enforce transparency, but they will help in improving health literacy by weeding out counterfeits and providing easy-to-read and user-friendly formats to dispense IFUs.
Medical products empowered by IoT will also lay the foundations for a multiway communication channel between consumers, manufacturers, and city authorities, especially aiding researchers to collect and analyze feedbacks for clinical trials and development of new cures.
Smarter ways to tackle Counterfeits: Falsified medical products take the top spot in the fraudulent products market, being worth US$163 billion to $217 billion per year. Falsified, substandard and unlicensed medicines and medical devices pose a serious threat to public health. Counterfeit medicines are on the rise and no place remains untouched by them.
However, medical products with digital twins can have vast implications in fighting the war against falsified medical products. The sophisticated digital tags on these products can act as a unique identifier, at the same time providing a user-friendly way to verify their authenticity. Both retailers and consumers just need to authenticate the product using the digital tag which will allow it to confirm the product’s genuineness by running it against an online database.
Going one step further by taking advantage of a highly connected ecosystem, fraudulent products can instantly be reported by consumers directly to manufacturers and city authorities. City authorities can thus keep track of regions in the city reporting counterfeits and crack down on the sources for such illegal operations.
The goal of smart cities is to create intelligent urban spaces and infrastructures to improve the lives of their citizens. But the first step towards this goal is to set up digital twins for products to bring them onto the Internet of Things platform. For these automated and intelligent systems would be impossible without various products generating and transmitting data about themselves. At this point, we have barely scratched the surface with IoT’s potential to create smarter cities, and smart connected products will lead the way in laying the foundation for the cities of the future.
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