The Power of Connected Packaging

Packaging can be a sophisticated digital touchpoint that bridges physical and digital worlds. Image courtesy of Appetite Creative

Packaging can be a sophisticated digital touchpoint that bridges physical and digital worlds.

By Jenny Stanley, Managing Director of Appetite Creative

Product packaging is no longer just a box—it’s a digital platform that generates revenue, connects directly with customers, collects data and solves compliance headaches. The packaging industry is undergoing its biggest transformation since barcodes, with AI turning every package into a personal conversation between brands and customers, connected packaging is here to stay. In fact, connected packaging delivers 14% scan rates compared to just 0.01% for traditional digital advertising, that’s 1,400 times better performance.

What was once merely a protective vessel for products has evolved into a sophisticated digital touchpoint that bridges physical and digital worlds. We’re experiencing a fundamental shift in how consumer packaged goods manufacturers engage with their customers.

From a simple questionnaire or a game to a fully connected experience, brands can now transform packaging into a media channel or online publisher. It’s a powerful educational tool, to explain how to use or recycle products. It’s also a great way to encourage trials of new products or flavors through vouchers or sampling — and for brands to better understand customers. The opportunities through connected packaging are truly unlimited.

Used to communicate brand messages and educate customers, connected packaging can connect with and build deeper customer relationships, harnessing the rich data behind those messages. We typically see engagement times of around three minutes, not only improving brand loyalty but opening a two-way dialogue with consumers. This enables the brand to establish a stronger brand presence, gather valuable insights, as well as create enhanced user experiences that increase product engagement.

AI Meets Connected Packaging

Gone are the days when scanning a package led to a static webpage. Today’s AI-enhanced connected packaging can create personalized experiences and genuine conversations between brands and consumers.

Consider the innovative approach taken by Sunny Oil’s recent campaign, which demonstrates the power of AI-driven personalization. Its ‘My Fridge’ feature doesn’t simply provide generic recipes, it intelligently combines ingredients users already have at home to suggest unique meal combinations.

The system ensures customers never receive the same recipe twice, essentially creating an unlimited cookbook that keeps consumers returning to the brand. This level of personalization, powered by sophisticated AI technologies including GPT-4 for natural language processing and DALL-E 2 for dynamic image generation, represents the future of brand-consumer interaction.

The results speak for themselves. While traditional digital advertising struggles with click-through rates of just 0.01%, connected packaging consistently delivers scan rates of 14%, with average engagement times extending beyond two minutes. The Sunny Oil campaign achieved particularly impressive metrics with extended engagement periods and remarkably low bounce rates, demonstrating consumers’ appetite for meaningful, interactive experiences.

The value for advertisers goes far beyond simple engagement metrics. These AI-powered experiences create rich datasets that help brands understand their customers better. When consumers interact with connected packaging they’re providing valuable insights into their preferences and behaviours. This first-party data has become increasingly valuable as we move away from reliance on third-party cookies in digital advertising.

Source: Appetite Creative, The Global Connected Packaging Survey 2025.

Regulatory Drivers: The EPR imperative

In the United States, Extended Producer Responsibility (EPR) legislation is rapidly reshaping the packaging landscape. EPR assigns producers both financial and operational responsibility for the end-of-life management of their products, fundamentally changing how manufacturers approach packaging design and lifecycle management.

Currently gaining momentum across multiple states, EPR for packaging requires producers to join collective producer responsibility organizations (PROs) that manage end-of-life product costs, including collection, sortation and processing. More comprehensive proposals extend coverage to include consumer outreach, education, infrastructure improvements and end-market development for recycled materials.

For CPG manufacturers, this regulatory shift presents both challenges and opportunities. Connected packaging emerges as an elegant solution to EPR compliance requirements while simultaneously creating consumer value. These technologies enable precise product tracking through entire lifecycles, provide consumers with clear recycling information and help brands demonstrate compliance with recycling requirements.

Our recent survey shows that 51.9% of respondents cite sustainability and recycling initiatives as primary drivers for connected packaging adoption, indicating the technology’s alignment with regulatory requirements.¹

The tracking capabilities inherent in connected packaging are particularly valuable for EPR compliance. The survey revealed serialized QR codes, which have seen increasing interest from 64.6% to 66.1% of respondents year-over-year, enable granular product tracking that supports both regulatory reporting and supply chain optimization.

Sustainability as Strategic Advantage

Environmental consciousness is no longer optional for consumer goods manufacturers – it’s a business imperative. Connected packaging provides brands with powerful tools to communicate sustainability initiatives effectively while driving measurable behavior change among consumers.

A recent Woodlands Dairy quiz-based sustainability campaign educated consumers about environmental consciousness while positioning the brand as environmentally responsible. The results were remarkable: average engagement times exceeded two minutes, and the brand experienced a 30% sales increase compared to the previous year. This was during a time of rising inflation and increased product costs. This campaign didn’t just educate consumers; it drove tangible business results.²

Connected packaging also enables brands to tap into the circular economy by sharing detailed information about products’ environmental impact, carbon footprint, recyclability and proper disposal methods. This transparency helps drive consumer behaviour change toward sustainability while meeting increasingly stringent regulatory requirements like Europe’s Digital Product Passport initiative.³

The Data Intelligence Revolution

Perhaps the most transformative aspect of connected packaging is its role as a data collection and analysis platform. Over half of our survey’s respondents (50.6%) value connected packaging specifically for providing actionable insights that inform marketing strategies and product development decisions.

Unlike traditional marketing channels that provide limited consumer insights, connected packaging generates rich first-party data about consumer preferences, behavior and interaction patterns. When consumers engage with these platforms, they provide valuable intelligence about their preferences, usage patterns and brand relationships. This data becomes increasingly valuable as the industry moves away from third-party cookies in digital advertising.

The tracking capabilities extend far beyond basic engagement metrics. Connected packaging platforms monitor real-time interactions including buying habits, product preferences, engagement duration, demographics, location data, scan rates, page views, return user patterns and social media sharing behavior – all while maintaining EU General Data Protection Regulation (GDPR) compliance standards.

Manufacturers who recognise the potential of every package becoming a personalized, intelligent communication platform capable of driving consumer loyalty, regulatory compliance and sustainable business growth will have the competitive edge. The transformation is already underway. The only question remaining is how quickly your organisation will embrace it.

References:

• https://appetitecreative.com/industry-confidence-in-connected-packaging-soars-to-88-8-in-latest-survey/
• https://appetitecreative.com/case-studies/woodlands-dairy/
• https://data.europa.eu/en/news-events/news/eus-digital-product-passport-advancing-transparency-and-sustainability

About the Author

Jenny Stanley is managing director at Appetite Creative, and author of ‘Connected Packaging: The Game-Changing Marketing Tool’ (available on Amazon). Stanley offers readers a unique blend of practical insights, case studies, and future projections. The book provides a comprehensive view of the connected packaging landscape, and features contributions from industry leaders, including executives from AIPIA, Domino, GS1, Digimarc, PolyTag, Avery Dennison, Koenig & Bauer, Laava, Amazon and Packaging Europe. For more information, visit: https://appetitecreative.com

A Comprehensive Connected Packaging Resource

‘Connected Packaging: The Game-Changing Marketing Tool’ authored by Appetite Creative Managing Director Jenny Stanley is a comprehensive guide offering fresh perspectives on this rapidly evolving field. Image courtesy of Appetite Creative.

‘Connected Packaging: The Game-Changing Marketing Tool’ authored by Appetite Creative Managing Director Jenny Stanley is a comprehensive guide offering fresh perspectives on this rapidly evolving field.

The book provides an extensive exploration of connected packaging that bridges the gap between physical products and digital experiences. Spanning nine chapters, the book covers everything from the historical evolution of connected packaging and future trends to regulatory and ethical considerations.

Drawing from her extensive experience and Appetite Creative’s position as a global leader in the sector, Stanley offers readers a unique blend of practical insights, case studies, and future projections. The book also includes a glossary of terms and a comprehensive list of resources for further reading, making it an essential reference for professionals in marketing, packaging, and brand management.

The book features contributions from industry leaders, including executives from AIPIA, Domino, GS1, Digimarc, PolyTag, Avery Dennison, Koenig & Bauer, Laava, Amazon and Packaging Europe providing a comprehensive view of the Connected Packaging landscape. These expert insights offer readers a well-rounded understanding of the technology’s applications across various sectors.

‘Connected Packaging: The Game-Changing Marketing Tool’ is now available to buy from Amazon, in English and Spanish versions.