Labeling Trends: The Crucial Role of NFC and QR Codes

Connected packaging is a solution to a multitude of marketing challenges, providing product authentication, regulatory transparency, and a means to communicate directly with customers. © Nataliya – stock.adobe.com

By Greg Brooks, Chief Marketing and Commercial Officer at SharpEnd

The fashion industry faces multiple challenges, not least declining spending amidst rising living costs and a surge in counterfeit fashion goods, costing the industry an estimated $3 trillion. In response to these dual challenges, fashion brands are looking for ways to engage consumers more meaningfully and increase loyalty while at the same time, finding ways to assure them of a product’s authenticity.

What if the product itself, or its packaging, could play a central role in tackling these issues?

Enter near field communication (NFC) and quick response (QR) codes. NFC enables devices to communicate wirelessly when they are close together, and QR is barcode containing data, that can be scanned and downloaded using a smartphone camera.

With 96% of brands viewing connected packaging as essential to their marketing strategy, the luxury and CPG sectors, and many others, are shifting to embrace these tools for direct, transparent communication and building on brand trust.

Additionally, 92% of brands highlight first-party data as a key pillar of their marketing strategy, and connected packaging allows them to access it. NFC and QR codes are emerging as a solution to a multitude of marketing challenges, providing product authentication, regulatory transparency, and a means to communicate directly with customers.

Authentication

For the luxury fashion sector, authenticity has always been a concern. Counterfeiters selling fake versions of Louis Vuitton, Chanel or Gucci on street corners is one thing, but when consumers are scammed on peer-to-peer e-commerce platforms like Depop, Shpock and Preloved, the problem is taken to another level. Added to this is the rise of fast retail brands like Shein and Aliexpress, imitating luxury designs to cater to a different market. The result is that it is harder than ever for consumers to be sure about the authenticity of their purchase.

However, authenticated redirection services enable brands to build trust with their customers. By using secure NFC tags attached directly to a garment, these services ensure every interaction is genuine. Each tag has a unique product ID that can’t be copied, so when a customer scans it, they can confirm that the product is authentic, allowing them to feel confident in their purchase.

Using the same technology, you can also provide consumers with unique personalised experiences, adding to the exclusivity of the one-of-a-kind feeling luxury fashion brands work hard to obtain. By scanning or tapping, businesses are able to provide experiences that can heighten the ownership of the product, adding more value to the purchase and providing a unique experience.

Consumer Demand for Transparency and Sustainability

There is a growing expectation from consumers for CPG fashion brands to provide more transparency on their sustainability credentials, especially amongst Gen Z. With the majority of Gen Z having been raised in the era of “fake news”, they are quick to spot brand misdirections such as greenwashing. Soon to make up 40% of global consumers, Gen Z is not one to overlook.

According to the NRF, 60% of Gen Z said it was important for brands to value their opinions and 55% claimed they would choose brands that are eco-friendly and socially responsible. Therefore, the more transparent a brand is, the better.

Good news – QR codes and NFC tags can also be used to share information on the product’s origins to verify its sustainability creds and offer personalised information about the journey of the product to boost brand engagement.

The CPG fashion sector has the strongest indicators for using QR and NFC for sustainability as you can communicate a product’s origins, how it was made, and how the brand follows regulatory requirements and ethical standards. Although already regarded as a key solution to do so, with 89% of the CPG sector stating that connected packaging would help achieve sustainability goals, many are still waiting to actually include this technology in their packaging.

The beauty of NFC and QR technology, therefore, is creating a closer relationship with the customer by allowing access to such information, building brand trust and increasing customer loyalty. In fact, it is inevitable that NFC and QR codes will become a standard in the future of packaging for both CPG and luxury fashion brands. Both will see it become a mandatory requirement through future plans to implement Digital Product Passports (DPPs) across all sectors.

Packaging as a Media Channel

Perhaps the biggest benefit for a product owner is the ability for NFC and QR codes to better engage a consumer, and to do that when the product is in their hand – both pre and post- purchase. The outcome is the brand creating its own media channel that it owns and can control.

This media channel can be used to do all sorts of jobs – from helping the consumer to better use a product, to helping them choose which product from a range is best for them, to telling engaging brand stories that add value to a purchase or to personalising physical objects by attaching digital messages to them. You can even use contextual data, such as the weather, location or time, to create more meaningful experiences. It is an exciting marketing opportunity for brands to convey their story and personality in whichever way they want.

In the modern marketing world, it also helps brands to gain a better understanding of their audience through the collection of first party data, the new oil that makes the marketing engine turn.

Packaging has never been more integral to the future of product marketing. NFC and QR codes are a business solution to engage and reassure modern luxury consumers and they provide deeper connections and information for luxury and CPG fashion customers, turning all packaging into a media channel that can power your business.

About the Author

Greg Brooks is Chief Marketing and Commercial Officer (CMCO) at SharpEnd, the leading connected experience provider for business solutions. Learn more at https://sharpend.com.