SharpEnd Report Finds 85% of Brands Increasing NFC Investment

By James Hickey, Managing Editor, RFIDJournal.com

 

  • SharpEnd second Connected Experience Report surveyed more than 1,000 c-suite executives
  • Growing demand for ‘value add digital experiences’ from consumers appeals to brands

More executives are looking to use near-field communication (NFC) in their brand packaging to deliver a better connection between consumers and companies.

That is one of the key findings in the second Connected Experience Report released April 30 by SharpEnd, the England-based company that uses technologies such as NFC, QR codes and augmented reality (AR) to develop connected packaging, product and retail experiences for brands.

According to Cameron Worth, CEO of SharpEnd, the report gives industry insights from U.K. and U.S. c-suite executives at more than 1,000 global brands across key sectors, looking into why and how brands are engaging with consumers.

“We’ve done a lot to build this industry over the last ten years and independent research has been fundamental in helping to educate brands about the possibilities,” said Worth, a keynote panelist at RFID Journal Live 2024. “The data is on our side with brands clearly to scale.”

Digital Experience

The report’s emphasis on the growing demand for ‘value add digital experiences’ from consumers is likely to appeal to brands wanting to build their own first party data capabilities, which allows them greater insights into how, where and why consumers are interacting with their products as well as other media touchpoints, according to the authors.

Brands believe demand from consumers for QR codes (95 percent) and NFC (93 percent) is only just growing. While QR codes are the more recognized packaging technology integration, the findings suggest an overwhelming preference for the use of NFC as it can further unlock better education amongst brands surrounding its uses and benefits.

Inside the Numbers

Among the key findings from the report highlighted by SharpEnd officials were:

  • 96 percent of brands believe connected packaging should be an important component in their marketing strategy, with 92% saying first party data is a key pillar of their marketing strategy;
  • 85 percent of brands plan to increase their investment in connected products in the next 12 months;
  • 85 percent of brands are willing to pay more to be able to integrate NFC into their products; and
  • 93 percent of brands will be using connected packaging as a part of their sustainability initiatives within two years

Brand executives responded the primary reasons for brands to invest in connected technology are to create personalized consumer experiences and interactive experiences for brand engagement.

Room For Growth

Most notable is the gap between the belief from executives surveyed that it could be used and it actually being used. Eighty fiver percent of brands acknowledge their suppliers have the ability to incorporate NFC into their products and packaging; however currently only 51 percent believe they are doing so.

The report comes just months after SharpEnd received a significant investment and partnership with global materials company Fedrigoni, that officials from both companies see strengthening SharpEnd’s position in the global market to develop new products and high-performing integrated solutions using QR, NFC and RFID.

“The results of this survey uncover a very promising trend, confirming our long term vision”, says Antonio Linardi, Fedrigoni's RFID Business Director.

Consumer Connections

Connected packaging technologies enable brands access to first party data has traditionally been challenging as retailers have historically acted as intermediary between brands and consumers. Generating their own first party data that can then be used for multiple purposes, most importantly, the consumer.

Brand marketers believe that one of the biggest drivers to invest in QR, NFC and AR is to create more personalized consumer experiences (23 percent), according to the report’s data.

When delving deeper into the data, there are similarities and differences across sectors in terms of attitudes towards, and usages of, QR and NFC to create consumer experiences.

Current Uses

The alcoholic beverages sector has both the widest current use of QR and NFC within its marketing programs (82 percent), the biggest intent to invest more in the next 12 months (88%) and most willing to pay more for NFC solutions (90 percent).

Healthcare & wellness led the way on using QR and NFC to educate about the product (60 percent) and to improve accessibility (60 percent). The CPG sector has the strongest indicators for using QR and NFC for sustainability, with 89% saying that connected packaging would help to achieve sustainability goals and 94% saying that brands should adopt connected experiences to help with sustainability efforts.

Interestingly, despite the high levels of desire to use connected packaging technology to achieve sustainability goals, the report highlights that 72 percent of brands are worried about being labelled as "greenwashing.”

The consumer packaged goods (CPG) sector showed the strongest desire for connected packaging to be used for recycling (67 percent), with healthcare having the strongest desire for behavior change (57 percent) and alcoholic beverages had the strongest desire to use connected packaging for nutritional guides (48 percent).

Government Regulations Ahead

Brands believe that digital triggers on-pack may become mandatory for certain areas such as sustainability credentials (50%), authentication (46%), ingredients and provenance (44 percent) and legitimizing product claims (42 percent).

“We are witnessing an exponential growth of connections between the physical and the digital worlds, inevitably resulting in the need for connected solutions - tailored to both companies and consumers,” said Linardi.

“This interest is paving the way for significant innovations throughout the industry, and strengthens our position as a strategic partner for brands interested in smart packaging and labels, based on NFC / RFID technologies.”

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