The concept of product packaging has evolved from humble beginnings as a plain, loose wrapper, to a sophisticated, branded, and data-marked means of providing critical information throughout a product’s supply chain lifecycle.
Moreover, with regulatory demands and consumer desire for greater and more granular information – from provenance to nutritional information and expiry dates, and from batch or lot number to instructions for use (IFUs) – packaging today is a vital component of brand reputation.
Yet, how many organisations are maximising the full potential of packaging as a data carrier, closing the loop between the factory, the point-of-sale shelf and the consumer’s home? Rob Ellinor, Programme Manager at Domino Printing Sciences (Domino), explores the innovative journey that forward-thinking manufacturers are starting to take to ensure product and supply chain data can be readily redeployed to inform business strategy, and so gain competitive advantage, all while ensuring compliance.
An evolutionary journey
Since its earliest inception, when packaging was little more than a means to protect food and transport it from A to B, the purpose of product packaging has evolved and now bears a much more significant role in many different ways. From the first barcode that was attached to a Wrigley’s chewing gum packet over 40 years ago, today packaging serves a multitude of purposes ranging from traceability and usability instructions to exciting designs to help increase a product’s ‘shelf appeal’ at the point of sale.
From regulatory compliance to proving a product’s ethical origins, packaging today can make or break a brand’s reputation. Coding and marking is an essential part of this process, with the clarity and accuracy of information critical in keeping products safe. Indeed, research[i] from information standards organisation GS1 US has revealed that 82% of retailers and 92% of brand owners support transitioning from the Universal Product Code (UPC) to a data-rich 2D barcode (e.g., QR code, GS1 DataMatrix), a digital watermark, and/or an RFID tag in the next one to five years. The study recognises that “an advanced data carrier is needed to evolve retail and provide consumers with detailed product information and transparency” and can also enable retail trading partners to benefit from robust supply chain data.
Having access to better data through product packaging also plays a key role in reducing product recalls due to incorrect or illegible information. Product recalls can result in disruption to operations whilst managing the recall, plus the direct costs of recalling stock and punitive regulatory fines. Having good data management combined with accurately packaged and labelled produce massively enhances traceability, reduces the size and scope of any recall and thus considerably reduces these direct and indirect losses. It also minimises other losses that can be caused through the knock-on effects of reputational damage by reducing the reach of a particular recall.
A survey by Harris Interactive found that 15% of consumers would never buy a recalled product again and 21% of people affected by a recall would not buy any product from the same manufacturer. It is easy to see how devastating the effects of a recall can be and quickly run into millions of dollars, once the direct losses of lost produce, the operational costs of managing the recall and the brand damage, loss of future sales and impact on share price are combined. The earlier and the greater the scale of containment, the lesser the cost to the all-important bottom line.
The impact is not limited to the retail sector either. In 2018, 9% of all medical device recall events – and the return of over a million units – were due to labelling issues, while in the UK alone there were four recall events[ii] of medical devices due to labelling errors between October and December 2019.
More data in smaller spaces
Meanwhile, the heightened pressure on manufacturers to include ever more information within their packaging and the focus on sustainability and waste reduction means that brands are having to both increase the number of pack sizes to address consumer demand for smaller and split-pack options, while also considering optimising packaging as part of their environmental footprint. In short, brands are having to include more data in smaller spaces.
Over the past few years, “intelligent” packaging with QR (quick response) codes, AR (augmented reality), and NFC (near field communication) has become more commonplace as connected technology advances along with printing capability. Throughout the entire supply chain journey, manufacturers, retailers and consumers can benefit from myriad opportunities to receive accurate, real-time information, potentially down to an individual product – or “batch of one” – level.
For the packaging industry, the QR code, in particular, is a great means of harnessing the power of packaging as a data carrier. Users simply hover their smartphone over the two-dimensional code, which can be as small as 10mm square, to receive a wealth of information instantaneously. Leveraging the new GS1 ‘Digital Link’[iii] standard, brands and retailers can web-enable QR codes, allowing a single code to perform multiple functions, something not possible with traditional coding and marking methods. These now “intelligent QR” codes reduce the need for multiple codes on a pack and can direct interactions to different URLs at different points along the product’s journey, moving from production tracking, through supply and logistics data to point of sale, and – ultimately – the consumer.
From a manufacturer's perspective, QR codes can be used to support transparency and traceability throughout the global supply chain, from the point a product leaves the factory, to the point at which it lands on the retail shop floor. It also provides a means to transmit greater data to the consumer and, in a world of protracted supply chains, generates a vehicle to interact with them directly, build brand loyalty, and gather insightful customer data. This creates an opportunity to go further than ever before with brand identity – well beyond traditional packaging and media channels.
The data gleaned can be used to inform essential business decisions around which product ranges are performing well and to very specific market segments (by geography, demographic, and even purchasing habits). In turn, this can drive marketing campaigns, ensure more efficient production and supply chains, and reduce waste, helping organisations to meet sustainability challenges.
Packaging as a data carrier
As we enter a new decade, organisations face continuous demands from consumers and regulatory boards to provide more and more product information to consumers. However, conversely, these requests are issued alongside calls to reduce the amount of packaging used. This means that the available “real estate” on packaging for coding is increasingly scarce.
Forward-thinking organisations are now starting to truly explore the concept of intelligent packaging, working with coding and marking specialists to meet these needs whilst at the same time reducing waste and limiting the size of any product recalls. They are gaining insight to improve production planning and managing the supply chain more efficiently, helping with sustainability objectives. In doing so, they are laying the foundation for enhancing products and brands by using the data transmitted to and from the packaging to bring greater levels of customer insight and potentially even to target individuals via personalisation.
It’s time to embrace packaging as a data carrier.
[i] Anne Marie Mohan, “Retail Industry, CPGs Support Switch from UPC to Data-Rich Barcode”, accessed 22nd May 2020 https://www.healthcarepackaging.com/home/article/21119790/retail-industry-cpgs-support-switch-from-upc-to-datarich-barcode
[ii] Gov.uk, “Alerts and recalls for drugs and medical devices”, accessed 22nd May 2020 https://www.gov.uk/drug-device alerts?issued_date%5Bfrom%5D=01%2F01%2F2019&issued_date%5Bto%5D=31%2F12%2F2019
[iii] GS1, “GS1 Digital Link Implementation Guideline (Global Edition)”, accessed 22nd May 2020 https://www.gs1.org/docs/Digital-Link/GS1_DigitalLink_Imp_Guide_i1.pdf