Product labelling needs to work hard – and now there are even more demands being placed on it.

In addition to catching the consumer’s eye, educating people on what the product is, and including all the necessary compliance information, front-of-pack designs need to be integrated into a multichannel marketing strategy.

With the pandemic causing a surge in online sales, CPG companies must think beyond the shelf edge and use physical products to drive digital engagement. How can this be done simply but effectively? The answer may lie in connected packaging…

Pandemic behaviours have created new CPG opportunities

While the pandemic had a catastrophic impact on many industries, one of the few areas to benefit from it has been ecommerce. The forced closures of retail stores rapidly accelerated online sales; according to McKinsey, ecommerce penetration grew ten years in just three months during 2020, something the analyst refers to as “the quickening”.

In addition to a general surge in online sales, people’s pandemic behaviours also created specific opportunities for CPG brands. For example:

• Consumers admitted to ‘stress eating’ processed foods while locked down at home, with savoury carbohydrates and snack sales rising by 19% and frozen confectionery sales up 18%. Meanwhile, 60% of people increased their alcohol intake
• At the other end of the spectrum,  many people became significantly more health-conscious as a result of COVID-19, with vitamin and supplement sales reaching record levels – including a 52-% year-on-year increase in March 2020 vs 2019
  
• There was a rapid rise in home skincare, haircare and cosmetics purchases to compensate for the closure of hairdressers and beauty salons. Mask wearing also influenced buying behaviours; anti-acne serum sales increased by 51% in a bid to tackle ‘maskne’
  
• Many everyday products received a boost in online sales simply because the shops were shut. For example, 1 in 4 people admitted to stockpiling coffee during the pandemic, with some people trying a coffee subscription service for the first time to avoid running short

But while circumstances created a commercial lifeline for many CPG brands, the shift from in-store to online sales has majorly impacted product marketing. When there’s no shelf-edge experience (or physical sales are in decline), how can companies use packaging to drive customer engagement – to turn a curious first-time buyer into a loyal brand advocate?

Creating an online journey using smart packaging

While packaging is traditionally designed to capture the consumer’s eye in the store aisle, the rapid growth of online sales and direct-to-consumer opportunities has shifted its focus. Products still need to be aesthetically pleasing, but their labelling now needs to drive digital as well as physical engagement.

To put it simply, receiving a product through the post needs to prompt shoppers to visit your website.

And there are two ways that CPG companies are tackling this challenge.

The first is through connected packaging: using QR codes or embedded smart technologies on the product bottle or box to route consumers through to digital content.

An innovative example of smart packaging is CBD brand Tonic, which produces everything from skincare products to edibles. Tonic incorporates NFC tags into its packaging, so consumers can scan their phones to access additional information including lab reports, sourcing details and a full list of product ingredients.

Using connected packaging to create greater detail and transparency is incredibly powerful in a young, fast-growing sector like CBD. While domestic CBD product sales grew by 52% in 2020 and are predicted to increase by a further 55% in 2021, understandably many consumers still feel nervous about using ingredients derived from cannabis.

Smart packaging enables CPG brands that are exploring CBD opportunities to authenticate their products and reassure shoppers of their origins – and the same principle can be applied to any sector.

For an in-depth look, read our blog post: how to build an international brand experience using connected packaging.

Supporting product deliveries with useful online information

The second way that CPG companies have integrated their physical and digital presence is by supporting product sales with online content. A good example of this is Overtone; a home hair colour company that sells semi-permanent alternatives to traditional hair dye, in a range of vibrant colours.

With consumers unable to get their hair dyed professionally during lockdown, the sales of box dye skyrocketed. Overtone accompanied its product dispatches with email instructions on how to colour your hair at home, to help first-time customers achieve effective results.

The brand also has an extensive blog offering healthy haircare advice, from how to protect semi-permanent colour when swimming, to brightening up your balayage.

But while a strong content marketing strategy ensures products are being used correctly, it still relies on consumers opening an email or searching out information online. Connected packaging takes the effort out of digital engagement, as customers can simply hold their phone up to the bottle or box to get the information they want or need.

Using smart packaging to create a seamless offline/online experience

While the pandemic may have accelerated the growth of ecommerce, the preference for virtual retail is here to stay. 86% of consumers plan to shop online the same amount or more often going forward – which puts pressure on CPG companies to align their physical and digital branding and marketing strategies.

Connected packaging is a relatively straightforward way to connect containers and online content, turning a product purchase into a brand experience. It also makes the label work harder for CPG companies, to increase customer engagement and promote a deeper understanding of brand values, both of which positively impact long-term loyalty.

While smart packaging is still in its infancy, successful projects from brands like Tonic are demonstrating its value – and it won’t be long before we see connected content opportunities becoming more mainstream. The challenge for brands is to create a digital marketing and sales strategy that feels part of an integrated journey, so the journey from label to website feels seamless to the consumer.

Hooley Brown is more than a brand localisation agency; we can optimise both your product labelling and digital content to create connected packaging strategies that work in every market. To find out more, get in touch with us to book a free consultation.

For the latest brand packaging trends, follow Hooley Brown on LinkedIn.

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This blog post was written in October 2021. Facts were correct at the time of writing.