Connected packaging has grown by 27% in the past 12 months

Connecting with consumers by turning packaging into a digital experience by scanning, tapping or pointing a smartphone device is becoming increasingly popular, research has found.

Use of connected packaging is expected to grow in 2023 due to its propensity for educating customers and improving brands’ sustainability credentials, a new study has found.

Creative technology studio Appetite Creative has released its second annual connected packaging survey. The research found that the contemporary tool for transforming regular packaging into a digital experience through the use of smartphones has surged in popularity in the past 12 months.

81% of brand executives stated they have used connected packaging, compared to just 54% in 2022’s report. Increased investment in digital marketing spend is also planned for 88% of those surveyed as opposed to 59% in 2022 – with part of this likely due to 92% of brands now considering connected packaging to be increasingly important to the packaging industry and 91% believing it will improve a business’s sustainability credentials.

Jenny Stanley, Managing Director at Appetite Creative, said: “Despite the cost-of-living crisis and global economic uncertainty, investment in connected packaging experiences continues to rise.

“No longer only a data collection tool, connected packaging is now a long-term customer relations and educational media channel, which helps companies navigate ever-changing sustainability requirements and inform product development and marketing decisions. Moving from a tipping point into mainstream usage this year, the perceived value of connected packaging has shifted to a business ‘must-have’.”

Connected packaging constraints

Despite its growing popularity, use of connected packaging still presents some pain points for businesses.

The biggest barriers for respondents are a lack of business capabilities and preparedness, price and complexity.

However, the results are in stark contrast to what was identified last year, when a third (29%) of respondents stated that connected packaging wasn’t a business requirement, a mindset found in only 7% of respondents this year.

Connected packaging benefits

Almost half (48%) of those surveyed consider connected packaging an important way to help educate customers of a brand’s offerings, and 57% view it as a useful tool for connecting with those consumers in a sustainable way.

Other valuable factors identified in the research include direct customer interaction (45%) and using connected packaging to inform product updates or marketing decisions (42%).

In fact, according to the study, 44% of brands perceive it to be becoming the main route of direct communication with consumers. Despite the industry's growing emphasis on the importance of data, just 29% of respondents viewed data collection requirements as important.

It’s worth noting that over a third (38%) surveyed believe connected packaging encourages customer loyalty, with gamification ranking in a similar position (36%), indicating playable ads are an important route to engaging with younger audiences, something which may become increasingly emphasised in future years.