Connected engagement: Achieving optimal utility and mass adoption for QR technology

19 Jun 2024 --- Connected packaging technologies like QR codes and near-field communication (NFC) tags are now a core part of most businesses’ growth strategies, with 85% of brands reporting their intention to boost investments in connected tech in the next year. This shift in attention is creating a rise in industry partnerships and collaborations, presenting different opportunities and challenges in different global regions.

Consumer interest in connected technology has been clear for several years, with a report commissioned by digital IoT company SharpEnd in 2021 showing a majority of consumers increasingly use QR, NFC and augmented reality (AR). The company’s most recent report, which investigated businesses’ attitudes toward connected technologies, revealed an upsurge in planned investments and interest.

“Brands are realizing they can use connected experiences across every stage in the journey to get closer to their consumers, generate valuable first-party data from their products, retail and media while also communicating their sustainability efforts,” Cameron Worth, CEO of SharpEnd, tells Packaging Insights.

“Brands that are being proactive in this space will have a massive advantage when regulation requires the adoption of QR or NFC to provide consumers more transparency around everything from ingredients to supply chains to recycling or reuse.”

“Our biggest news this year by far has been welcoming Fedrigoni to our cap table with a significant investment. It’s been a wonderful process, becoming a key part of their ambitious journey of transformation supported by great people who really believe in what we’re doing.”

Partnerships are key
Regarding the spread of connected technology, Worth says: “Honestly — it’s everywhere. There is no country in the world you can visit where you will not be using NFC and QR codes as part of your daily life.”

“As we all become more digitally connected, brands that make and sell physical stuff have an amazing opportunity to develop closer and more direct relationships with their consumers. Those that will win will be those who take the leap early, gain the experience and insights and then reapply them to drive their business,” he continues.

Consumers increasingly use QR, NFC and AR, finds SharpEnd.

“Interestingly, across our key markets, we’re seeing a huge increase in the packaging ecosystem of partners (printers, converters, etc.) realizing they should partner to win together. This is a great change in rhythm from a few years ago when there were a lot of weird SaaS point solutions being launched and not properly maintained, causing some unnecessary confusion in the market.”

Different markets present different challenges. Alice Rackley, CEO of Polytag, tells us that technological capabilities can vary from region to region, but regional differences do not affect business performance.

“We are an approved partner of GS1, the global organization that maintains the standard for barcodes and allocates barcode numbers for each business. Our QR codes are built and managed to meet GS1 standards, meaning our clients can be assured the QR codes we supply will work across the world,” she says.

Mapping global engagement
When asked which global market presents the biggest challenges for adoption, Worth says that Asia, as an early adopter, is now the hardest region to break into and change.

“Asia is the most difficult just because it’s so far advanced with these technologies,” he says. “There’s not much you can bring to the conversation because they’re already convinced and technologies like QR and NFC are a part of the fabric of society.”

“That said, until every brand is delivering meaningful experiences through every interaction, our work will not be done, so there’s scope to play a role here, too.”

While the UK is ahead in the tech space, there are plenty of other examples that we can look to for inspiration, says Rackley.

“In Australia, for example, retail chain Woolworths has introduced a QR code payment system at its checkouts: Customers simply pay for their groceries using a QR code linked to the digital wallet on their smartphones.”

“In the US, there are major projects taking place, including moving from the current stripy barcode to a QR code both at the till and throughout the supply chain, giving customers more information on their purchases. As a tech business, it is important for us to keep up to date on the industry and ensure we are collaborating with businesses across the globe.”

UK connected tech policy barriers DRS is an example where legislation should adjust to alternate methods offering better accessibility and connectivity for consumers’ needs.
When it comes to the UK’s policy barriers to connected tech, Rackley explains that the issue lies in policymakers assuming that all the available data is already known and that all potential processes and solutions have already been considered — limiting collective creativity, innovation and pace of progress.

“The truth is that any good, effective legislation needs to be written in a flexible way that remains open to new data points and processes to help optimize the outcomes in the future,” she adds.

The UK’s deposit return scheme (DRS), whereby customers pay a deposit on their drinks containers and earn it back once it has been recycled, is set to be introduced by Spring 2026.

“DRS is just one example of legislation that should be written in a way that is open to alternate methods that offer more accessibility and connectivity as the scheme adapts to consumers’ needs,” says Rackley.

“From our work, we have found that customers prefer to redeem their recycling rewards using modern technology, such as smartphone apps, rather than visiting supermarket reverse vending machines.”

“We already know that the consumer appetite for digital solutions is there, so writing these out of the equation at the starting point will be a huge error. The bottom line is that when it comes to our sector, limiting options and innovation with too precise and prescriptive policy is a crime against the climate,” she says.

Gartner’s hype cycle
Worth explains that all technology, including connected packaging technology, travels a well-known path to mass adoption, known as “Gartner’s hype cycle.” This is defined by five phases.

First is a “Technology Trigger,” in which a potential technology sparks publicity. Second, a “Peak of Inflated Expectations” occurs when this publicity is backed up by successes and failures. Third, the “Trough of Disillusionment” occurs as interest wanes and implementation begins to fail.

In the final two phases, a “Slope of Enlightenment” arises, in which the technology’s benefits become more understood, and second- or third-hand generation products emerge.

Finally, a “Plateau of Productivity” creates a clear set of criteria for the technology as it becomes mainstream. If the technology has more than a niche market then it will continue to grow, according to the theory.

“Connected experiences as a technology go through the first few phases and if you know the chart, then we’re on the ‘slope of enlightenment’ and heading towards the ‘plateau of productivity.’ It’s a really exciting time for everyone involved in the industry,” says Worth.

“[Our report] has already been downloaded more than 1,000 times and there has been an amazing outpouring of support and positive sentiment by media, brands and suppliers. Everyone is excited by the potential for this industry to grow and how it can help brands develop deeper and more meaningful relationships with consumers.”

By Louis Gore-Langton

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