Connected packaging on the rise globally as consumers become more tech savvy | 08-08-2024 |

The global connected packaging market size was valued at US$45.12B in 2023 and is predicted to hit around US$74.30B by 2032, according to a study from Towards Packaging reported in Industry Intel recently.  North America continues to dominate the sector with a 40% market share and the QR code segment remains the largest in the space, it reveals.

The connected packaging market has experienced steady growth due to the commercialization of technologies such as image recognition and Augmented Reality (AR) in the past decade, it says. The report defines connected packaging as a type of smart packaging that integrates digital technologies with physical products to enhance customer brand experience,  providing consumers with interactive features and enhancing engagement with Brands.

The market has seen growth due to its rising popularity in the food and beverage, clothing, toys, cosmetics, gaming, and apparel industries, claims the report. The rise of e-commerce and the Internet of Things, along with high smartphone penetration through urbanization are also some of the drivers of growth in the connected packaging space. Brands are increasingly tapping into this form of packaging to verify the authenticity of purchased products and to offer incentives.

 Increasing internet connectivity and data collection opportunities are also driving the connected packaging market. A major driver is the increasing demand for Consumer to Brand interactivity. It becomes a powerful tool for Brands to stay in the consumer consciousness by offering interactive features such as personalized content and loyalty rewards. For businesses, it is a way to conduct real-time monitoring and collect important customer satisfaction and preference data, as well data about purchasing patterns and to tailor their business strategies.

Collaborations between technology providers and packaging manufacturers are making connected packaging more ubiquitous. The global smartphone penetration rate was estimated to be 69% in 2023, allowing Brands access to once-remote consumers and allowing for the integration of new features and functionalities into the brand experience. Technology companies are increasingly collaborating with Brands to integrate new technologies like image processing, NFC, QR codes, and AR into their marketing strategies. Consumers are not only becoming more accustomed to using the new technology but actively demanding it.

Consumer demand for these technologies is at an all-time high in the UK and USA, with 95% of customers expecting QR codes on their packaging and 93% expecting NFC integration. QR codes are the most recognized form of connected packaging worldwide but NFC recognition is also steadily growing. Creating awareness around NFC use can also help increase adoption.

While technology integration is becoming increasingly expected of Brands, the cost of implementation remains prohibitive for many small and medium businesses. Brands need to solve issues of compatibility to give consumers global access to the technology. Half-hearted implementation of connected packaging (such as QR codes leading to broken links, or simple redirects to brand websites) can have the opposite effect, driving consumers away.

For brands to integrate connected packaging tech globally, they must also deal with issues of complexity and varying infrastructure availability in different regions. Companies have to set up standard interactive experiences across language barriers and deal with concerns of data security as countries have varying degrees of legislation surrounding data privacy and storage.

Innovations in the Internet of Things space with the development of new sensors and smart packaging systems have opened up new opportunities for growth in the connected packaging market. Brands can tap into the increasing consumer inclination for personalized services and use a data-driven approach to deliver a highly tailored brand experience to end-users. The increasing demand for sustainable packaging, allows Brands to digitize their messages about it.

North America has the largest market share in the connected packaging space. The United States is the major consumer of connected packaging with increasing standards of smart packaging and an emphasis on environmental friendliness and reduced packaging waste. The Asia-Pacific region is expected to be one of the fastest-growing connected packaging markets in the forecasting period. As well as increasing disposable incomes and the rise of large e-commerce businesses in China and India, the substantial growth in the healthcare and food & beverage industries is also contributing to the region’s growth in connected packaging.

For a sample of the study go to: https://www.towardspackaging.com/personalized-scope/5168 

AIPIA and AWA Smart Packaging World Congress Amsterdam