Connected products allow brands to build better consumer experiences than ever before. Here's how they do it.
August 30, 2022
The word “connection” can mean many things. There are connections that are large and some that are barely noticeable. Connection is dependent on context and perspective..
Connection between brands and consumers occurs at everyone touchpoint between the two. The best of these connections create a two-way relationship established before an initial purchase and last long after. Those that have never bought a Starbucks product likely still recognize the mermaid logo; many that have made a purchase not only become repeat customers, but also continuously interact with games and reward programs in the brand's app.
This type of strong connection between brands and consumers is crucial to building great customer relationships. While this has always been true, there have never been more ways for brands to form these connections. However, with these numerous possibilities comes the increased likelihood of getting lost in the noise.
One of the ways to cut through that noise and directly reach consumers is connected products. These are now ubiquitous in many industries, and their use has grown rapidly in this year of pandemic as consumers have become accustomed to interacting with connecting technologies like QR codes and NFC tags that empower brands to transform any physical thing into a digital platform.
However, connected products used purely to fit trends are not valuable in the long term. Successful brands are leveraging connected products to create better consumer experiences than ever before.
Ecommerce and digitalization were growing before the COVID-19 pandemic. But, as with many things, the pandemic changed it all, accelerating both at an unexpected speed.
Speaking with the Washington Post, Harley Finkelstein, president of Shopify, put into perspective how strong the digital acceleration this year has been.
Before the pandemic, ecommerce as a percentage of total retail was 15%, Finkelstein says. As a result of the pandemic, that number has now jumped to 25-30%. Previously, reaching that percentage wasn’t forecast until 2030, meaning we’ve accelerated 10 years in 2020.
Or, as Finkelstein puts it, “This mass digitalization has happened.”
“Due to Covid-19, QR codes and other digital enablers have become even more useful and much more visible in consumers’ everyday lives,“ Amir Maslic, product and brand manager at Emmi, told The Drum.
QR, and other connecting technologies like NFC, are inherently contactless, making them perfect solutions to create connected products that meet consumers’ new demand for a contactless world.
But creating connected products doesn’t inherently create connections with consumers.
The QR code has a history of being a great idea that never got a lot of use, but that has changed.
“While technologies like QR codes have been used on product packaging for years, they’ve historically only been used to direct users to simple website destinations,” explains Michael Watson, head of operations at Aircards, told The Drum. “However, times have changed, and we can use QR codes as activation points for a variety of experiences.”
Here we explore some of these types of experiences that add real value to consumers.
Perhaps the most obviously beneficial connection between brands and consumers is direct ecommerce sales. As mentioned above, the percentage of total retails sales belonging to ecommerce will skyrocket to 25-30% this year. But while some brands have been able to take advantage of the shift to online sales, others—particularly large CPG brands—have struggled to do so.
When products are connected, consumers can easily reorder products—as well as related products—directly from the brand, even if the product was originally purchased through a retailer.
As an example digital experience, the Sparkle CPG brand added an NFC tag that, when scanned, provides one-click reorders. This connection allows the brand to not only earn direct ecommerce sales, but a way to provide consumers with a personalized digital experience they return to after the purchase.
Connected products make personalization at scale a reality.
Kilchoman Distillery uses real-time messaging via a digital experience launched by an NFC tag on bottles to be sure their product messaging is up-to-date at all times.
“The main point for us is that we can adapt the message in real time,” said Peter Wills, Sales & Marketing Manager at Kilchoman.
The value offered by connected products goes both ways—giving to brands as well as consumers.
“Brands can now provide rich and detailed performance data that helps brands understand how connected packaging builds consumer relationships and drives brand loyalty,” Matt Klein, director of strategy at Sparks & Honey, told the Drum. “It can provide a range of performance metrics that most brands will be highly familiar with—unique users, session duration, geo-location, and conversion tracking.”
This information is used to not only create better consumer experiences at the time of purchase, but also allows the connection to remain open as a two-way street between consumer and brand to build a closer and more personalized—and therefore more relevant—connection throughout the lifetime of the consumer.
The insights also go beyond the specific consumers to allow brands to create better products to attract new consumers.
There’s never been a more crucial time to employ connected products to build the types of consumer relationships that were never available before.