SharpEnd’s Connected Experience Report: How brands are preparing for mass adoption amid changing regulation
23 May 2024 --- Digital IoT agency SharpEnd recently released its second “Connected Experience Report,” examining how the industry is adopting and responding to developments in connected technologies like QR Codes, near-field communication (NFC) and augmented reality (AR).
The first report, released in 2021, focused on consumer attitudes and behavioral patterns regarding connected tech. Since then, the packaging landscape has changed dramatically, according to SharpEnd founder and CEO Cameron Worth. In the past three years, the business has seen connected formats go mainstream throughout various segments, including packaging, fashion and consumer goods.
“Since our first report in 2021 (downloaded more than 10,000 times) we’ve come a long way. Digital triggers are mainstream. Consumers intuitively know how to interact with QR Codes and NFC has become part of everyday life through payments,” he says. “So when we finally had the time to create a new report, we didn’t want to ask consumers again if they like and use QR Codes and NFC because we know they do.”
The company turned its focus to businesses and brands to understand how they are thinking about the technologies’ opportunity and “physical data” it generates. Questions included how they are integrating the technology into their business holistically — into their technology stacks, customer data platforms and across all touchpoints.
Packaging Insights also submitted questions for the report to discover how connected technology is changing with legislative developments, particularly around greenwashing.
“The connected consumer journey now extends into the physical world with ‘physical data’ from digital triggers enhancing existing customer data held by brands and together powering a new era of personalized, performance-based marketing,” says Worth.
Boosting investments
The report shows that roughly 85% of brands plan to increase their investments in connected technologies in the next 12 months. In the US, this includes 89% of alcoholic beverage producer respondents, 84% of respondents from the consumer packaged goods sector and 75% from pharmaceutical and healthcare.
SharpEnd and Avery Dennison partnered to create an interactive, storytelling experience for Bastille Parfums.“This is a growing market that requires all parts of the supply chain to step up and make sure they are ready to play their part in helping their clients to take advantage of the opportunity. Those that do will reap the benefits,” says Worth.
“To those who are ‘integrators’ and helping to deliver solutions for brand rollouts, I would advise not to put QR Codes and NFC into ‘promotion’ or ‘campaign’ buckets. Digital triggers are not a channel or a tactic, they are an enabler of seamless connected journeys for the consumer and a constant flow of data for brands.”
Worth continues that the sector is now more akin to customer relationship management than advertising — “bringing consumers and brands closer together through better experiences and generating valuable data and insights at the same time.”
Connecting against greenwashing
While the majority of brand respondents said they are prepared for incoming greenwashing legislation, with over 80% reporting they are “ready” for extended producer responsibility measures, sustainable disclosure requirements and the EU’s Corporate Sustainability Reporting Directive, many also said they are using connected technology to educate consumers.
For example, in the UK, over 60% said they are offering rewards for recycling through means of QR Codes, and almost 50% said they are trying to implement fundamental behavior change.
However, many companies also reported holding back from forms of branding over fears that they could be accused of greenwashing. Seventy-two percent said they are “prevented” from making consumer outreach to avoid potential litigation. In the past year, numerous companies have faced allegations of misleading advertising, with some facing legal action.
The report shows that while there is a belief that legislators and policymakers are doing enough to support connected technology adoption (86%), there is also a belief that in the future, connected technology may become mandatory for certain areas, such as sustainability credentials (50%), authentication (46%), ingredients and provenance (44%) and legitimizing product claims (42%).
This also connects with brands’ belief that important cultural factors impact consumer engagement, such as the rising importance of personalized customer experience (44%), product provenance that improves brand loyalty (37%), data protection concerns (37%) and that consumers buy into brands, rather than “from” brands (33%).
First party data
Worth says the thing he is most surprised about in the findings is that more brands still don’t understand that connected technology is not merely another marketing tactic.
“I’m surprised that more brands haven’t realized yet that this isn’t about campaigns and competitions and it’s not about a new ‘channel,’” he says.
“There was unanimous focus on first party data as a key pillar of the respondents marketing strategies, and yet, only the most mature brands have begun to understand the opportunity and advantages that ‘physical data’ generated from adding QR Codes and NFC to their touchpoints — media, retail, product and packaging — will bring them.”
“It is a massive untapped opportunity for most brands and as we head toward the depreciation of the cookie, an increasing direct-to-consumer relationship and sales, QR Codes and NFC will provide a vital flow of the first-party data that brands will need to power their marketing in an era of personalized, performance-based marketing,” Worth concludes.
This year, Italy-based Fedrigoni Group, a manufacturer of high-added-value specialty papers for luxury packaging, premium labels and self-adhesive materials, announced it would acquire a minority stake in SharpEnd.
By Louis Gore-Langton
