Authored by Cameron Worth, 34, founder and CEO of SharpEnd/ io.tt, an IoT solutions partner in 130 countries for some of the world’s biggest brands including Balmain, Estée Lauder Companies, Pernod Ricard, PepsiCo, Mattel, Nestlé, Yeo Valley and LVMH.
- The Internet of Things (IoT) will go mainstream in 2023 as marketers focus on activating their most valuable owned media channel – their own products
During the pandemic we saw many brands tightening their belts and cutting media and marketing spend. Marketing teams looked to drive clearer, more tangible ROI from their marketing activities as a result and every penny has continued to be scrutinised since.
This past year we’ve seen the increased adoption of connected packaging as marketers have realised the potential of one of their most valuable, yet widely untapped, media channels – their own products. In fact, connected packaging is the most untapped media channel a brand has in its arsenal, and it has the potential to engage with consumers in a way unlike any other media channel.
What started during lockdown with the increased time spent in the home, has continued and people now spend more time than ever before engaging with a brand through its packaging. Engagement rates have risen significantly as consumers looked for a connection with an idea, a person or an experience that was otherwise lacking during lockdown, and this change in consumer behaviour is here to stay as IoT goes mainstream and brands strive to keep the connection and become even more creative with the experiences they can deliver now the world has opened up. This year we’ve seen a 56% increase in connected packaging engagement data on our io.tt identity management platform, from the previous year and we expect this to double again next year as brands see the benefit and invest further.
With a recession looming, we anticipate consumers to be even more selective with the brands they engage with and spend their money on. Consumers will not only have higher expectations for a superior product, but a superior experience, as a reason to trade up. Connected packaging is the gateway to connect with this new type of savvy consumer.
- Brands are taking back control
The trend for marketers to focus on their owned media channels suggests a drive for more control from brands. More control of the customer experience, and more control of customer data. The connections garnered through owned channels are arguably more valuable than a Facebook view or CPC as this is ‘true engagement’ with product in hand, THE holy grail of brand engagement and what marketeers have been striving for since the early days.
This in turn makes data protection a top priority for brands and technology business in 2023 as consumers demand ownership of their personal data and marketeers look for ways to compliantly manage their customers’ data. Data generated from connected experiences is first party data by default meaning no third party apps or social media can ever access it or use it to serve ads. Connected packaging develops a two-way relationship between the brand and its consumers. Consumers choose to share their data on their own terms in exchange for the connected experience. However, connected campaigns should run on trusted identity management platforms such as SharpEnd’s leading io.tt identity management platform, to ensure data privacy compliance. Currently used in more than 100 countries, it is an invaluable tool to tie data to individual consumer profiles and so it becomes clear who buys a product, and where or how it is used. Not all brands have these fundamental systems in place and in 2023 we’ll see those that do go beyond expectations knowing their creativity has no bounds with the right foundations for data in place.
3. A more strategic approach to immersive customer experiences
In the last few years, we’ve seen brands ‘playing’ through a test and learn approach with immersive experiences. We’ve seen AR and VR experiments in the Metaverse, but this has often happened in silos and activity has not been scaled at pace. In 2023, this will change and we will see a more strategic approach to connected pack experiences.
Immersive experiences will be a way back to pre-pandemic levels for retailers in 2023. Central to the experience is a strong storytelling element, often multi-sensory to make the experience all encompassing. We will see brands seek out more ways to craft authentic experiences embedded with genuine stories. Consumers today are more considered purchasers, and difficult times ahead will only consolidate this. Not only is the product they buy often a carefully researched item, the experience of buying that product is everything and, if done well, will live on just as long, if not longer than the product itself.
And the experience doesn’t necessarily have to be big to be meaningful. Sometimes, a simple delivery can have an astounding impact. Take the user guides SharpEnd transformed for Boots and their Tens machine that provides drug-free pain relief. By shelving out-dated paper guides in tiny print and replacing them with Instagram-style visual instructions and support that lives on a dedicated mobile website, accessed at POS and on packaging via a QR code, the user guide experience is transformed for the better. Users find the right product and programme for them, supported every step of the way to get the most out of the product and achieve better results in managing their health.
The Metaverse will be the environment for experience but currently no-one can predict how it will develop. As SharpEnd enters the Metaverse with our partner Threedium, we will be offering brands a way to interact with consumers through immersive technology such as 3D environments and VR where experience is everything. From virtual changing rooms to fashion shows and game-playing, the online world will impact offline retail in a way we’ve not seen before and the best way to approach the Metaverse is with an experience-first strategy.
- Telling the sustainability story is top of the agenda
With a drive to reduce carbon emissions and hit ESG targets, retail brands are facing a raft of new regulation in 2023 and beyond to ensure they report on and communicate clearly (with evidence) their sustainability metrics. Telling their sustainability story will make or break some brands as consumers shun those brands not making adequate strides in sustainability initiatives. In fact, telling the sustainability story is almost as important as driving forward the sustainability initiatives themselves.
Packaging is one part of telling the sustainability story and being an owned channel, at point of sale, can have a big impact. Without doubt, sustainable packaging is the future of any product, driven by Gen Z who view sustainable packaging as the norm, rather than an option. Brands that design for circularity will not only save costs and reduce their carbon footprint, but build better consumer experiences which will lead to brand loyalty as they take their customers on their sustainability journey with them. When designing for circularity, brands need to communicate important, and complex messages to consumers: firstly, how they’ve reduced the amount of material being used, secondly, in prioritising design for recyclability and true compostability and finally in using dynamic materials, sourced from nature, rich with embedded stories, designed to return to the soil as a nutrient. Connected packaging presents many opportunities for these messages to be communicated clearly and cleverly and we’ll see brands get even more creative in the ways they do this in 2023.
Levi’s is one brand SharpEnd works with who is leading the field in telling their sustainability story. To encourage sustainable consumption, Levi’s launched in-store connected retail installations, Donation Wall, where shoppers can donate their used denim and earn store credit through Levi’s 24/7 app. Available in three different sizes, Bespoke, Pro, and Mini, to fit stores of all sizes, the donation wall began its pilot last year and has now been scaled across four countries and in 15 stores.
Storytelling is at the heart of the installation. The screen on the Donation Wall prompts store visitors to donate their used denim whilst playing videos of partner charities that will benefit from the donation. The interactive iPad starts the denim donation process and scans donated denim with the iPad camera. It also scans the customer’s Levi’s Red Tab (Levi’s membership programme) barcode to activate their reward of 501 coins (store credit). Finally, users deposit their denim in the donation hatch when prompted by the screens.