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How Smart Products are Shaping Today’s Consumer Retail

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Automation, smarter systems, and processes are emerging in almost all aspects of CPG retail. With consumer retail technology undergoing dynamic shifts to the digital, everyday objects are turning into smart objects.

Smart Product is a product that maintains information about itself and the context to enable new digital processes and capabilities. Everyday products can become Smart Products by maintaining a digital representation of the product on the internet, through its lifecycle from being manufactured to being consumed.

Smart products uphold a digital record of themselves, which can be updated, edited, manipulated and distributed for multiple use cases by the stakeholders and owners of that product information. Anything from bottles, books, vegetables to T-shirts can be converted into a smart product. These digital “instances” of a physical product can be accessed over the web by mobile devices, web applications, scanners, browsers or other devices with sensors directly connected to the internet themselves.

Smart Products carry and exchange information throughout the product’s lifecycle from the source of its ingredients to its journey through the supply chain, the point of sale right up to the end.

In short, smart products carry a perpetual digital journey of their physical counterparts.

As a result, stakeholders can identify and locate them easily on the entire supply chain. For instance, if a supplier wants to enquire where the raw materials were sourced for a particular ‘smart-product’, they can simply do so by scanning the product and accessing its information in real-time, digitally. Furthermore, the supplier can share that information with the retailer or other parties in a standardized format.

Maintaining a digital record of the product throughout its lifecycle is important for building applications that further allow these products to participate with other entities in the supply chain.

Brands can leverage connected technology to empower these products to start communicating and participating in the Internet of Things.

Once the smart product is established, triggers on the product in the form on QR code, RFID, NFC and sensors along with reading devices, can invoke actions and changes to its digital representation to enable new and innovative digital processes. For instance, once the retailer accesses the information of locating raw materials, he/she can virtually see the product being made or crafted through videos, images or other files. As a result, smart products further deepen the product experience, which in the case of normal products, is quite limited.

When products are not active or not ‘smart’, they can’t contribute to selling, educating the consumer, assisting their journey through the supply chain, improving business processes and efficiency or participating in the entire process from manufacture to consumption.

Technology innovations like the Internet of Things now allow for connecting products that technically cannot connect to the internet by themselves. These products can be extended to the internet via allocating unique identifiers. Technology innovations such as IoT, allow for these smart products to then start communication and participating in the ‘Internet of Products’.

posted May 17, 2018 by Sarang Pharate

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Buying behavior is changing.

Consumers are far more conscious of what they buy, what they eat, what they put on their bodies and how their purchases impact the environment and others.

Today’s consumers are increasingly becoming cautious with their shopping decisions, wanting to know more and more about the products they consume. They are actively looking at packaging labels that tell a healthy or sustainable story. And brands are expected to communicate the information they’re seeking.

Consumers are not just curious about the ingredients on the packaging, but also, where they come from.

So, What Exactly Are Consumers Looking For?

When a customer picks up a product today and browses through its packaging, what exactly are they looking for beyond the obvious? Let’s take a look

What is Inside this Product?

Consumers don’t want just a list of ingredients on their products, they want to know where those ingredients come from, what they are and whether those ingredients are safe, healthy, and sustainable. For example, there is a large section of consumers avoiding the use of palm oil since they’re aware of the environmental damage the palm oil industry has contributed to.

Consumers are aware of certain kinds of fish which are endangered by overfishing or contain high levels of mercury if they are from certain catch zones. They look for what kind of sweeteners are in their products and whether those sweeteners can have a health impact among scores of other red flags related to ingredients.

Where Did This Come From?

As opposed to reading a list of ingredients, consumers want detailed information on what makes the products they buy and what impact it has on their bodies and the environment. They are looking for traceability information. They want information about its origin and visibility into the supply chain. Consumers are now seeking answers to where their product comes from? They want to know the journey it took to reach the shelves and their homes. What kind of a footprint did this product leave on its journey?

Did This Product Hurt Anyone or Anything Along the Way?

Given the times we live in, it is imperative to ask, what countries was it produced in, do they have fair practices in those places? Consumers are enquiring whether the products they are buying were produced using ethical manufacturing practices or was it made using sweat labor or forced labor in another part of the world? Consumers are aware of illegal cross-country trade and practices. They are aware of the implication of furniture built from wood that was illegally chopped down.

Is this organic?

More than a right to know, consumers need to know whether the product they are paying for contains toxins? Whether it is genetically modified or organic? Consumers want to know whether they are ingesting pesticides through their purchased products. They need to be aware of these toxins and then make an informed decision whether they would like to invest their money in that product. Specially toxins like mercury and lead. More consumers are now concerned about added preservatives or avoiding products with high levels of fluoride. For instance, avoiding meat loaded with antibiotics. Consumers are aware of microplastic particles that exist in toothpaste and other cosmetics and the environmental impact of these. They tend to skip these products altogether.

How Did this Impact the Environment?

Awareness of single-use plastic, packaging and the impact on nature is growing like never before. With efforts from communities, organizations, and individuals, people are becoming aware of the horrors of single-use plastic. According to LA Times, half a billion straws are used every day. Refusing straws is becoming a trending practice all over the world. Moreover, people are avoiding single-use plastic altogether and opting for jute, paper or cloth bags for their grocery shopping.

Today’s consumers have heightened sense of cautiousness when it comes to consumption patterns and their subsequent impact on the ecosystem. Environmental concerns have an impact on the consumer’s purchasing decision. Most consumers wonder whether the product is safe for the environment and their health? How does it contribute to climate change and the global carbon footprint?

These are just some of the big issues that a lot of consumers know about now and subconsciously or consciously process when they pick up a product.

Moreover, the world is warming up to the idea of mindful consumption habits that are born out of ethical practices, transparency, and accountability. Consumers are looking for way more information than those in the last few generations. As traditional product labeling in print has restrictions as well as limitations to meet this growing need for more detailed product information, it is time for brands to think how well they can communicate their stories to the customer about their products and efforts in meeting consumer expectations.

Several organizations and brands have taken commendable steps with their products by either consciously replacing an ingredient, changed sourcing for an ethical reason, made efforts to reduce their organizational footprint or packaging.

The question that remains – “Are we effective as a brand in delivering that information to the consumer at the point they are asking these questions?”

As traditional product labeling in print has restrictions as well as limitations to meet this growing need for more detailed product information, it is time for brands to leverage smart connected products to communicate their stories to the customer about their products and efforts in meeting consumer expectations.

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Think back to the last product you consumed!

Maybe it was a pack of orange juice or a loaf of bread. What did you do when it reached its shelf life? You probably read some of the information it was able to hold and then tossed it into the bin.

Traditional packaging for products have had a limited role until this point but with the emergence of IoT, there’s an opportunity for products and packaging to play a larger role and do more.

Smart Packaging or Smart Products which are assigned internet ID’s can play a much bigger role in how consumers engage with their everyday products and how brands make this happen. Once digitally activated, these smart products then start communicating with the consumers.

Here are some of the features that can be activated on Smart Products or Smart Packaging :

1. Authentication: A winning characteristic of smart packaging starts with authenticating the product. Prior to purchasing, consumers need to make sure the product is genuine.

A lot of apparel brands, like, MK, Channel, Louis Vuitton and Levi’s are already capitalizing on this opportunity to fight counterfeiting. Other companies are enabling these brands to do so by integrating their microchips in apparels. Hovering a smartphone in front of microchips-embedded clothes can verify their authenticity.  The same can be done via QR codes and scannable data matrix.

2. Open Sensors: This is an important packaging characteristic to identify whether a product has previously been tampered with. Like, using ‘connected’ NFC bottles featuring Thinfilm, Johnnie Walker established their originality and usability readiness. Via NFC connected sensors, consumers can scan the labels with their phones, which instantly signals if the product is ‘open’ or ‘closed’. A great example of deepening customer’s product experience while ensuring the originality of the product’s seal.

(Image Source: ThinFilm)

3. Track and Trace: Since Smart Products maintain a digital record of themselves on the internet, each product SKU or serial level item can also maintain a log of the different locations and entities it has changed hands at as well as a log of activities carried out on the journey to the end consumer. These track and trace logs can be activated off of the packaging by anyone who wants to trace back that journey through the lifecycle of the product.

4. Temperature Sensors: Easily perishable products, especially certain CPGs, require being stored at specific temperatures. Specially developed NFC stickers with temperature sensors are now available for packaging. Consumers can tap the product packaging with their NFC enabled phones to identify whether the optimum temperature is maintained. It also helps them to identify situations which are deterrent to maintaining a product’s ideal temperature and subsequently act on it.

5. Best Before Warnings: Smart packaging can significantly improve the date label instructions by providing a clear picture to customers. To curb food waste and make consumption more transparent, date labels must communicate trigger warnings to customers in a concise manner. The FMI-GMA food label initiative is an example of how packaging information connects with the end consumer. Streamlining and standardizing the wording accompanying the date labels on packages offers greater clarity regarding the quality and safety of products. Including ‘Best if Used By’ and ‘Use By’ on smart packaging labels and further allowing products to communicate this information directly to the customer will make sure the product is consumed in its due time.

(Image Source: FMI)

6. Reordering Action:  Smart products must be able to reorder themselves or help customers do so by connecting with shelf stock data or providing triggers on the packaging the customer can use to scan and instantly re-order a product. By identifying the quantity levels, smart products can either trigger reorders or to help consumers quickly place the next lot of orders for the same product they are running out of.

7. Digital E-Labels:  Smart packaging empowers customers to pull any information on the digital E-labels, which can be accessed anywhere at any given point in time. These include all the content and information about the product, which may exist in the form of documents, certificates, videos or images. Building interactive packaging labels for products can trigger these experiences. For instance, scanning the digital E-Label for a pasta brand can prompt customizable interactive videos and pasta recipes on its app.

8. Real-Time Offers: Smart Packaging gives consumers the flexibility to edit information or dynamically change content delivered in real-time. It allows manufacturers, brands, and retailers to update and upsell relevant offers on the particular product. Say, for instance, a wine brand wants to inform its customer about the 1+1 promo offer on one of its products, which is only valid for 24 hours.  With smart packaging, brands can proposition variable pricing and offers in real time by letting smart products communicate this to the consumer.

Such smart packaging solutions make the customer experience more interactive with the ‘connected’ and smart packaging. Smart products and labelling is a wide-open field with a plethora of applications aimed to refine the customer experience as well as a brand’s presence around its products.

+3 votes

Brick and mortar retail is not dead nor dying.

There are some things we love about brick and mortar retail outlets which online retail cannot compensate for. Using our senses to make decisions and being able to touch, smell, see and experience products cannot be replicated online. However, the brick and mortar retail experience could be augmented with technology that we like about online retail too.

Let’s take a look at how connected technology can breathe life into Brick and Mortar Stores

1. Connected Inventory Management

When you go to a store for something and the item on the shelf is out of stock, it can be disappointing. This can be a thing of the past with IoT shelf monitoring and restock. The Levi’s-Intel collaboration is an example. By 2016, Levi’s installed Intel’s RFID sensors in stores to track clothing inventory through IoT based applications. Another way to go about this is automating via self-stocking or inventory robots like Amazon is doing through its Kiva Robots which constantly keep a tab of how much stock remains on a shelf and automates re-ordering before stock runs out and ruins the customer experience.

Intel's IoT Solution For Levi's Inventory Management

Intel’s RFID based Retail Sensor Platform helps Levi’s maintain Store Inventory: Source

2. Personalized Recommendations

Clicking on an item and getting recommendations for similar or complementary products. This is quite common on e-commerce websites on the same page as your selected products offering alternatives and suggestions. Whereas, in Brick and Mortar stores, you are dependent on either store assistants or your own willingness to scout aisles in the hope of finding an option in the similar range.

The ease of being recommended options and suggestions realtime would be a great addition to brick and mortar retail locations.

This can become a reality through interactive displays that can recognize the selected product, rigger options and display other alternatives or products that complement the one the customer is holding. For instance, In Italy’s Co-op Supermarket of the Future, customers pick up a product, a motion sensor recognises it and shows all the product information on an interactive screen. Connected technologies such as this can be used to personalize the shopper experience and recommend products within stores just as they would on an e-commerce website.

Coop Supermarket

Coop Supermarket’s Interactive Display: Image Source

3.  Smart Trial Rooms

When it comes to apparel, as much as you visualize, you cannot really ‘try’ clothes on E-commerce sites. Whereas in physical stores, sometimes the queue destroys your willingness to even enter the trial room. Smart Trial rooms are almost elevating that dilemma. Brands like GAP and Ralph Lauren have introduced interactive trial rooms which help customers with item selection and recommendations, apart from helping them trying on clothes without going back to the shopping floor.

Ralph Lauren's Smart Trial Room

Ralph Lauren’s Smart Trial Room: Source

4. Self Checkout Solutions

Online checkout and digital payment procedures are so evolved today, they rarely go beyond a minute or two. However, when it comes to brick and mortar store, the endless lines can kill the experience. This is also changing with self-checkout technology. Amazon Go store is a great example where self-checkout has been implemented enabling smart products, sensors and RFID tags. Another is the Rebecca Minkoff and Queuehop Collaboration. By bringing QueueHop’s self-checkout technology to their retail stores, the brand is giving a digital experience to customers by allowing them to be in control of their physical shopping experience.

Self-Checkout Technology IoT QueueHop Rebecca Minkoff

QueueHop’s Self Checkout Solution at Rebecca Rebecca Minkoff Store: Source

5. Connected Engagement and Shopping Experience

Smart Mirror Rebecca Minkoff Store

The Interactive Mirror at Rebecca Minkoff Engages Customers: Source

Online Stores always prompt an action, “ready to make payment”, “apply a coupon”,  “ready to checkout“. One can’t help but feel brick and mortar experience could use some of that. Add to that a lack of in-store staff or consumer information in general. While interactive screens like the one at Co-op Supermarket are capable of displaying all information related to CPGs such as nutrition, certifications, sustainability information like zero waste, organically manufactured, etc, other consumer products can find this application of smart products quite useful in brick and mortar stores. For instance, the interactive mirror in the Rebecca Minkoff store fitting room offers customers a prompt to enter their phone number to save the customer profile and gives recommendations based on the current and past fittings as they shop making the experience more engaging.

6. Retail Store Environment Optimization

IoT based technology can gather store-data on the cloud in order to provide the same level of analytics available in an e-commerce environment to executives and employees. Understanding behaviour of customers, movement of smart products through a store, purchase trends combined with analysis of this data can come in handy to reduce costs and improve store efficiency and shopper experience.

IBM IoT Retail Store Solution

IBM’s Retail Store Environment Optimization Solution: Source

We are slowly undergoing a retail shift which combines the best of e-commerce and brick and mortar stores. These shifts are being catalyzed by connected technology that allows brands to combine the best of both online and offline retail. Such product information-driven commerce when augmented with technology, has great potential to further blur the lines between the physical and digital.

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First Published on Qliktag's Website (https://www.qliktag.com/how-connected-technology-breathes-life-into-brick-and-mortar-retail/) 

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