Looking For A Retail Tech Revolution? It Starts With The Packaging

By: Martin Ros, SVP & Head of Intelligent Packaging, Stora Enso [HEL: STERV

Martin Ros, SVP & Head of Intelligent Packaging, Stora Enso [HEL: STERV

Every business wants to cut costs and increase profits. Almost every business, nowadays, also wants to improve environmental performance. Often, the two go hand in hand: data shows that three out of four millennia’s are prepared to pay more for a sustainably produced product. For retail companies contending with traditionally slim margins and fierce competition, these things are especially important.

So, how to create a leaner, greener retail operation? Unsurprisingly, the answer is technology. Perhaps more surprising for some is where to start: the technology of packaging.

RFID is key

Radio-frequency identification (RFID) technology has been around for some time now, but what is new is the ability to cost-effectively print an RFID label onto paper or fibre. No need for plastics or harmful chemicals.

"Customers can also interact with the RFID tag using their smartphone to verify their packages are un-tampered-with, building trust with the retailer"

This is the game changer because it means RFID technology can be incorporated into all sorts of products and packaging without an impact on waste streams and recycling – and without inflating costs. That brings a number of innovations out of the realm of ‘what if’ and firmly into ‘why not?’

The RFID difference

The ability to inexpensively track every package or product is a revolution for inventory and supply chain functions. A 2016 survey from EKN-Kurt Salmon estimated a 12 percent return on investment (ROI) for reduced time and labour costs – mainly through more efficient or removed cycle counts, 10.3 percent for improving backroom to front-of-store inventory accuracy and 10percent for increased store replenishment. Real-time, accurate data is transformative for keeping tabs on a high-volume, high-speed retail environment.

Another major advantage of RFID tags are the strides they offer in tamper proofing. An anti-tamper seal incorporating RFID technology can easily be checked at each point of the supply chain and a digital stamp records the time, location, reading device and package status, storing this data in the cloud. If a problem is detected, it can be narrowed to the precise point in the supply chain it occurred and alert retailers immediately. Customers can also interact with the RFID tag using their smartphone to verify their packages are un-tampered-with, building trust with the retailer.

Once customers start using phones to interact with packages, the possibilities extend far beyond tamper proofing. With use of NFC (Near Field Communication) enabled phones, the entire customer product experience can be reimagined. Interacting with a food package, for example, could bring up information such as recipes, best before dates and recycling advice. Or a retailer could use this vector to advertise promotions and special offers, events or similar products the customer might like. This could both help retailers boost their own sales and also create new revenue streams through advertising or marketing partnerships.

Back to bricks and mortar?

RFID technology is undoubtedly a boost to e-commerce, but could it also be a lifeline for beleaguered bricks and mortar stores, too? The cashless, till-less store concept has attracted a lot of attention, enabling automatic tracking of what customers put in their basket and charging their accounts afterwards, however there are less extreme implementations as well.

The smart-shelf concept can revitalise the in-store experience. A smart shelf uses weight and RFID technology to detect which product has been lifted from the shelf. A display can then alert the customer to product characteristics, special offers and other product recommendations. The process can become interactive, offering the customer a deeper, more information-rich experience. An extension of this is the concept of New Retail, where unmanned e-kiosks in non-traditional point of sales environments, such as offices, hotels or transportation hubs, facilitate on-the-go purchases using a smart phone.

No doubt this is only the tip of the iceberg and savvy retailers and marketers will find many more innovative ways to use smart, RFID technology to improve profits and the customer experience.

Plastic not so fantastic

However, any discussion of retail technology that focuses purely on the digital only tells half the story. Some of the most important technological advancements in retail won’t play out on phones, tablets and stock management systems.

In fact, plastic replacement in packaging will surely be one of the most transformative. Consumers increasingly want greener alternatives to harmful plastics, from renewable sources rather than fossil fuels. Retailers who give them these options will be rewarded with custom.

However, plastics are used for a reason. They offer fantastic properties at low prices. Traditional paper and fibre-based alternatives can serve for some applications, but the technological leap underway is the development of new renewable plant-based materials that can fully replace plastic packaging at an attractive cost.

Not only do these materials themselves offer environmental advantages in terms of origins and recyclability, they can also result in reduced packaging size and weight. This means more products per shipment, less fuel consumption and therefore reduced costs and emissions savings.

For retailers who embrace both the digital and analogue technological revolutions in packaging, the opportunities are staggering. A more efficient, precise and cost-effective way to do business, opening up a whole new type of customer experience and all the while reducing environmental impact – and winning plaudits and custom in the process. So, if a retailer is looking for a tech revolution, a good place to start might be with the packaging.