Mar 03, 2019By 2024, the global Near Field Communication (NFC) market will nearly triple as adoption of the technology grows. What's more, the latest generation of Apple iPhones can read NFC tags without the use of a third-party app. All of this means the average smartphone-carrying consumer will not only be familiar with NFC, but will be able to tap his or her device to an NFC label on your bottle and access any verification or promotional material programmed into the tag.
This NFC technology boom is already disrupting the way in which consumers interact with brands—consumers prefer using NFC tags to QR codes two to one, according to a study conducted by Strategy Analytics. Wine and spirits brands that adapt to consumers' preference for mobile technologies now will get ahead of their slow-to-change competitors and establish themselves as innovators in the industry.
Let's examine two of the strongest business cases for wine and spirits brands to adopt NFC smart labeling technology: authentication and social engagement.
Authenticity of High-Value Wine and Spirits Products
Counterfeit wine is pervasive, with an estimated $3 billion market—and for every dollar of fake wine sold, premium wine brands are losing business. Consider the 2012 case of wine collector Rudy Kurniawan, who mixed and sold fraudulent bottles of vintage wine. As much as $550 million in counterfeit wine he sold is still on the market.
While there is no single-layer solution to this widespread problem, smart labeling technology is proving promising as a way for premium wine customers to authenticate the provenance of the wine they purchase. Each NFC tag contains a semiconductor with a unique identification number, allowing wine brands to program item-specific information into each wine label, which is encrypted and far more difficult to replicate than a UPC code. When combined with other anti-fraud precautions, NFC tagging allows premium wine brands to prevent counterfeiting and premium wine customers to be confident in every purchase.
For wines in the $150-and-up price category, the cost of the NFC tags is inconsequential when compared to the added value of brand protection, consumer trust and fraud prevention. With a study reporting that 75 percent of wine customers are more likely to purchase from a brand if it uses anti-fraud technology, incorporating NFC tags into your product labels could contribute to sales uplift.
Drive Social Engagement Before, During and After Sales
Authentication is a built-in feature of any NFC label—and due to the large memory capabilities of NFC tags, that same tag can be used to provide any other product-specific information you'd like to put in front of your consumers. For instance, you could offer the wine's origin story, food pairing ideas, the ideal serving temperature, branded video content and so on.
The potential for social engagement is where smart labeling technology becomes exciting for brand owners. Each NFC tag is a blank page ready to be programmed with content to achieve any branding, awareness or loyalty goal. And the potential for social engagement with NFC extends far beyond product labels.
Let's say you're a Napa Valley winery with tourists flooding into your tasting room every day, but each tourist also visits 15 other wineries as part of a tour. You want them to remember and purchase your wines after their trip. To differentiate yourself, you could provide an NFC-enabled coaster or other keepsake for your customers to take home.
With just a tap of a phone, past customers can access videos of your winemakers describing the wine. Just like that, you've allowed each person who walks into your tasting room to bring the experience of their winery visit home with them. Moreover, you can continually change the content in the cloud, allowing those same customers to have a different experience every time they scan the NFC tag.
That's just one example of the limitless potential of NFC tags to drive customer loyalty and engagement. You could use tamper-evident NFC labels to present different promotional messages before and after a bottle has been opened. You could combine the power of NFC technology and augmented reality to vary your marketing message, depending on a customer's mood. Practically any promotional campaign you can dream of, NFC can bring to life.
Now is the time for wine and spirits brands to make sure they understand how they can leverage NFC. Deploying a well-crafted NFC solution takes time. Brands that don't start experimenting now will be hard-pressed to catch up to their early-adopting competitors—and unless consumers all stop using their cell phones, brands have no choice but to have a strong mobile strategy in place ready to launch.
For wine and spirits brands looking to experiment with NFC, reaching out to your label converter is a good place to start. Label converters will lead the charge for integrating NFC tags into product labels and other printable goods (coasters, posters and temporary tattoos, for example), with other third parties offering their expertise for the promotional, software and infrastructure pieces of the NFC puzzle.
Marsha Frydrychowski has more than 15 years of experience working with consumer packaged goods companies in marketing, packaging and branding. She leads marketing efforts for Resource Label Group, a leading full-service label manufacturer with locations throughout the United States and Canada.