Tagged: how companies can use NFC tech to enhance consumer engagement

Utilising smart packaging could not only mean a new avenue of providing information and generating interaction, but would allow businesses to gather data on product usage habits.

8 August 2018
image credit: pierrephoto/Getty Images

There’s only so much space on a product pack, yet the kind of information consumers are looking for is increasingly broad. Is it functional? What’s the nutrient content? Is it sustainable?

Trying to convey all this information in a comprehensible way can be a challenge for retailers and manufacturers – and there’s plenty of room for misunderstanding, as a survey by Which? on recycling symbols recently showed.

One solution to the problem could be near-field communication (NFC). This technology is perhaps most familiar from its use in contactless payment, but also allows people to connect to products and services via their mobile phones.

“We see smart packaging as the first real opportunity for brands to create direct consumer interactions, to do that at scale, and also to communicate post-purchase,” says Cameron Worth, founder of SharpEnd.

Set up three and a half years ago, SharpEnd helps design, pilot and scale digital solutions for FMCG businesses using the Internet of Things (IoT). Worth believes that of all the modern concepts out there, NFC has some of the greatest potential for uptake.

“The Internet of Things right now is full of a lot of hot air,” he says, pointing out that ideas like tracking ingredient provenance and preventing counterfeit are quite complex to implement operationally and involve lots of upfront cost. NFC, on the other hand, can be easily added on as an additional aspect to a marketing campaign.

While NFC isn’t new, it’s only now that we’re reaching a point where a significant number of people have NFC-enabled devices (if you have any Apple model older than an iPhone 6, though, you’re out of luck).

So how does it work?

A recipe for greater interaction

Skipping over the more technical aspects involving microchips and radio frequencies, the basic function is to allow NFC-enabled devices to transfer data to one another without Internet connection.

In terms of product packaging, an NFC-enabled mobile phone can be touched to, say, a tag on a bag of tortillas, and whatever information the manufacturer wishes to impart to the consumer will be transmitted – no app required (once more, if you have an Apple phone, it’s not that simple and you’ll have to download an app).

All brands are able to activate packaging as a digital touchpoint, from a bar of soap to a bottle of vodka. “The product becomes not just a physical asset but a digital asset as well,” says Worth, adding that companies should “view the product as a new method of consumer engagement.”

He stresses that a lot of brands lose visibility of their products once they are sent to retailers, but technology like NFC could help identify who is buying the product, where and when they’re buying the product, and how they’re using the product, in addition to providing a channel to communicate with the customer post-purchase.

This communication could take all sorts of forms, from competition entries, to games, to recipes, to access to local events, to expiration date notifications.

“Consumers respond well to exclusive stuff,” says Worth, as well as “experiences that take the context of use into account.”

At a basic level, however, it could also just expand on current labels, providing more detail on allergens, dietary values and reference intakes. In terms of sustainability, it could aid individuals identify if a particular plastic is locally recycled or how it fits into a circular economy. The amount of information supplied can be infinitely increased and it can be accessed more interactively, at the consumer’s discretion – something that multinational Wessanen's product development controller, Colin Campbell, says is likely to become more common.


The facts of the matter

SharpEnd partnered with media agency Mindshare to survey 1,000 UK adults on different ways to use the IoT. The results found that:

  • 77% were interested in food expiration notifications
  • 50% would scan a product to learn more about its provenance
  • Consumers were keen on exploring interaction with products, but only on their terms (e.g., they preferred initiating through tapping over push notifications)
  • It is essential for the interaction to be quick and easy
  • 63% did not mind if FMCG companies collected data on how they used the companies’ products as long as they got something of value in return. There was less concern about protecting the info compared to financial and personal data

Getting nearer to near-field communication

For both consumers and companies, there can be concerns about the complexity of new tech, but as the relatively rapid adoption of contactless payment has shown, it’s all about keeping it simple.

“One of the things we have to get around as an industry is making people think less about the science and the technology and more about the interaction itself,” says Worth, noting that it’s as easy as “tap your phone here to get X, Y and Z.”

“We’re at the coalface of deploying this stuff in market,” he adds, “and what we find is just stripping back all of the complexity and just being as simple as possible allows us to have a much higher success rate with brand engagement.”

NFC tags are not as cheap as QR codes, which cost a fraction of a penny and have a high adoption rate in Asia, but have failed to make much impact in the UK. Worth notes that creating NFC materials can entail an expense of anywhere from 10 to 20 euro cents (9-18 pence) per item, which would be untenable for some products. 

However, the cost is coming down thanks to innovation around the materials used to construct them. Plus, if more brands adopt the technology, the price will become more affordable thanks to economies of scale.

Going forward, there are also other ways the field could be expanded.

“One of the big innovations we’re seeing is the ability to deliver different experiences pre- and post-purchase,” says Worth. “I think once we have a technology that can adequately detect whether a product has been bought or not and deliver a different experience accordingly, I’m happy to sit there a while and take advantage of that opportunity.”

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