Smart Tags Reveal Brands' Sustainability Efforts

In an age where millennials are constantly checking the tag for the right size and price, they’re also looking for a values match; high-quality, sustainable items that match their budget, as well as where it came from and how it was made.

It’s never been more important for brands to build trust and transparency. A Deloitte study shows 66 percent of consumers indicate a company's openness and honesty was important to a purchasing decision, and these tags give the power back to brands to connect directly with their shoppers.

Thinfilm CEO Davor Sutija took time recently to answer questions about brands are addressing the need for sustainable shopping by connecting directly with their consumers through NFC-enabled smart tags

Q: What are NFC-enabled smart tags and what benefits do they offer retailers?

Sutija: NFC-enabled smart tags are thin, flexible tags that can be easily integrated into everyday objects, granting them just a little bit of intelligence. They turn disposable products into marketing vehicles and brand ambassadors, essentially turning each package into its own media channel.

Brands can leverage NFC to talk to their customers at all stages — from product selection to first use and subsequent reordering. Brand activation, product authentication, direct ordering and delivery, and convenient localized product information and user guides can all be launched with a simple tap, taking the consumer directly to the right digital experience in a fraction of a second. This drives customer loyalty and brand recognition by taking consumers to personalized content created by the brand, such as videos, coupons and product use information.

For retailers, this is a crucial step toward catching the attention and loyalty of millennial and Gen Z consumers. Although these demographics spend almost all of their online time on their smartphones, IBM Uniquely Generation Z study found 67 percent of Gen Z shoppers prefer to buy their items in-store over online. They’re also seeking more personalized connections, both with their peers and the products they shop for. Brands and retailers must manage these seemingly conflicting behaviors by creating in-store, interactive technology experiences for mobile-savvy consumers.

Q: How does NFC differ from RFID, how are they similar, and how can they interplay?

Sutija: NFC is essentially a form of RFID, but has a relatively short read-range. When most people hear RFID they think of UHF protocols with much longer read-ranges. Aside from the read range, one of the key differences between NFC and RFID is that RFID solutions don’t typically work with smartphones, so it doesn’t really work in scenarios that call for customer interaction.

RFID requires a scanning wand or other industrial reader so you’ll see it used for inventory management either in the store or through the supply chain. RFID’s main use is on the front end of the journey for the product before the customer interacts with it. NFC picks up the baton for every step of the customer journey — from brand discovery to purchase to the decision to replenish.

Q: What technology is needed to effectively deploy NFC?

Sutija: Part of NFC’s appeal is it interacts with smartphones users already own. By using a smartphone to power and interact with NFC-based tags integrated directly into products, a consumer can instantly receive contextual messaging, unique content, special offers or product information. The main cost is the tags themselves. It’s a relatively small investment that has been proven to drive consumer engagement, sales, and loyalty.

In a recent deployment of Thinfilm NFC tags by Spanish winemaker Barbadillo, 30 percent of consumers who engaged with the tag ended up buying the bottle they interacted with. In a deployment of NFC tags in coasters distributed by San Diego-based Coronado Brewing Co. as part of a product launch for a new beer, the NFC-enabled coasters drove website conversions 17.5 times more than the craft brewer’s other marketing channels.

Q: How can retailers connect with consumers using this technology?

Sutija: NFC technology allows consumers to make informed shopping decisions at any time. For example, someone is looking for a nice bottle of wine to go with dinner — they go into the store and encounter a literal wall of options. A wine clerk isn’t always available, but when the bottles themselves have special NFC tags, consumers are a phone tap away from information about the wine’s vintage, history of the vineyard, pairing notes or a promotional discount upon purchase. This can continue after purchase too — each NFC tag is uniquely identifiable and the content tied to it can be adjusted after a purchase through a software monitoring platform. For example, a customer could receive a coupon from the retailer to reorder the product from home.

Q: How can NFC-enabled smart tags best be leveraged in the supply chain? What about as a loss prevention tool?

Sutija: According to a research report by Kroll — a leading security risk management firm — during 2016, 29 percent of businesses suffered from thefts of physical assets or stock while 26 percent of businesses suffered from vendor, supplier, or procurement fraud. These losses typically occurred within an unmonitored, unsecured supply chain. Adding discrete, flexible sensors into packaging can help reduce these losses once the product leaves the shipping dock. The NFC tags, which are easily integrated into a range of packaging form factors, generate valuable data to help supply chain managers track, trace, and secure valuable shipments.

Q: NFC-enabled smart tags generate a great deal of Big Data. What is the most effective way to analyze and utilize this Big Data?

Sutija: Through a cloud-based, multi-tenant software platform, companies can monitor and manage NFC tags remotely, allowing for custom content delivery, consumer activity tracking, and detailed analytics and reporting. Through this platform, companies can quickly create campaigns, test messaging, measure effectiveness, and then adjust as needed.

Q: In your view, how is the customer experience changing with the rise of NFC-enabled smart tags and how will those changes benefit retailers?

Sutija: The customer experience is being changed by NFC tags by allowing a direct connection between brands and consumers at each step of the customer journey: from brand discovery to intent of purchase to first use and ultimately the decision to replenish. This direct connection effectively eliminates intermediaries like search engines, online marketplaces, and social platforms that always have the brand’s best interest in mind. By tapping the NFC tag with their smartphone, a customer can get unique, personalized information not just for that product, but for each step of the journey — different information can be sent to the customer before, during, and after purchase.

Q: Will iBeacons eventually lead to the downfall of NFC and RFID technology?

Sutija: First, iBeacons tend to be very intrusive and push information to consumers in a particular location whether they want to receive it or not. NFC, on the other hand, is very intent-driven and much more of an opt-in experience. Next, iBeacons and NFC can actually work together in a retail environment. iBeacons and other Bluetooth-based technologies work around a particular location or point of interest, you have to be in range of the beacon. Bluetooth makes a place interactive — within a certain range. It doesn’t go home with the consumers like NFC can — iBeacons are good for driving a special offer at the location itself, but won’t tell you specific details of individual products.