Connecting Physical and Digital Worlds

A combination of physical and digital packaging elements is essential to enhance sustainability, improve supply chains and engage consumers. © Adriana – stock.adobe.com

Redefining the Future of Packaging

By Ryan Yost, President of Materials Group at Avery Dennison

The packaging industry is experiencing one of its biggest shifts yet. Companies are under pressure to find solutions that are not only more sustainable but also leverage technology to drive consumer engagement — all while seamlessly navigating supply chains and keeping contents safe.

Packaging is, and always will be, a physical aspect. However, in an increasingly digital world, companies need to integrate their physical and digital operations for the best of both worlds. Packaging solutions that intersect the physical and digital realms are the way forward

While packaging will always exist in the physical world, each piece can be given its own digital identity, voice, and life. This is where RFID technology comes in.

RFID technology is at the cutting edge of packaging innovation, revolutionizing the industry by providing solutions to a multitude of challenges. Here’s how:

Optimizing Supply Chains for Less Waste

Current packaging solutions often rely on people to transport goods or manage inventory, which introduces the risk of human error. These inaccuracies can lead to products being misplaced, incorrect data, and poor business decisions. By connecting the physical and digital, intelligent RFID labels can be incorporated directly into packaging solutions or attached to physical items, allowing them to be accurately tracked and accounted for, thus reducing sorting and delivery mistakes.

Using RFID technology to scan packages, employees across the supply chain can automatically receive notifications if an item is loaded onto an incorrect vehicle, allowing mistakes to be rectified almost immediately and greatly reducing the number of late or missing deliveries. RFID tags add a sophisticated layer of automation to the supply chain process, improving driver efficiency and delivery accuracy while eliminating many time-consuming tasks such as manual package scanning and delivery updates.

A More Sustainable Option

Reducing waste is just one component of sustainability. Companies are also under pressure to find circular solutions that encourage packaging reuse and recycling. In fact, 75% of companies worldwide have committed to more sustainable packaging, with many aiming for 100% reusable, recyclable, or compostable packaging by 2025 according to a report by McKinsey & Company.

UK-based food service distributor Reynolds is a great example of using RFID labels to add more circularity to its packaging. The company was under pressure from clients to find a more sustainable solution for delivering produce to restaurants. On average, Reynolds delivers 60,000 corrugated packages to restaurants every week. These boxes are designed to be recycled, but many ended up in landfills.

Reusable containers were clearly the solution, but they were often lost or inadvertently tossed in the trash. To improve visibility and motivate reuse, Reynolds worked with us to create a solution that gives each container a unique, scannable identity. This has significantly extended the lifespan of each container and reduced food spoilage.

Brands are finding various ways to connect with their customers through intelligent RFID labels. © JackF – stock.adobe.com

Enhancing Consumer Connections

Brands are finding various ways to connect with their customers through intelligent RFID labels. Integrated Near Field Communication (NFC) is one way to empower this. Using a smartphone to tap a logo with NFC can unlock a promotion or customer offering. Scanning the QR code on the packaging of an artisanal candle, for example, might reveal a short profile of the candlemaker. Clothing labels can assure buyers of a designer’s fair-trade practices.

Combining the unique digital identity from an RFID tag with a QR code allows brands to communicate all relevant information about the exact product their customers are holding. Consumers receive accurate information about the products they buy or intend to buy, with complete transparency and traceability made possible by giving each item its own unique digital identity. This transparency fosters trust and engagement with the brand.

A good example of this combination of the physical and digital worlds in action is the Sacramento Kings. The basketball team used this technology to enhance their annual fan appreciation night. At the final home game of the last season, each fan received a free team shirt on their seat. By scanning the QR code on the shirt’s label, fans unlocked a purpose-built microsite featuring a thank-you video from the team’s head coach and links to exclusive giveaways.

Using Packaging to Find an Intersection Between the Physical and Digital

If companies can integrate the physical and digital through their packaging, they can address many of their biggest challenges. By giving each item its own digital identity, they can better track items to reduce loss and waste, enable more circular solutions, and provide consumers with greater insight into their products and how they are made. Intelligent labels are a relatively simple and straightforward way to achieve this, with solutions that can be quickly implemented to make an immediate impact.

While we are moving towards a largely digital world, some things will always remain physical—including packaging. Now is the time for organizations to lean into and find solutions that maximize the best of both worlds to ensure a successful future.

About the Author

Ryan Yost is president of Avery Dennison Materials Group. In this role, he is responsible for the group’s overall global strategy and meeting its short and long-term business, financial and operating objectives. Before being named president of Avery Dennison Materials Group, Ryan was the vice president and general manager of Avery Dennison Identification Solutions, where he led the business’s transformation into a high-growth organization that created innovative solutions for the food, retail and logistics market segments. Ryan assumed division leadership of Vestcom in 2022. He also served as director of commercial Avery Dennison RBIS, where he led operations and commercial teams across the globe.  Learn more: https://label.averydennison.com/na/en/home.html