Rarely a day goes by when the Econsultancy editorial team doesn’t receive an email or 10 updating us on an ‘innovative’ development from one brand or another. 

Usually I only glance over emails like this. But on a recent Friday afternoon I got one related to booze, and suddenly the sender had my attention. 

The message wasn’t so much about the booze itself as the bottle containing it. Specifically it was about a new type of bottle Remy Martin is launching later this year.

The bottle uses near field communication (NFC) technology, enabling drinkers to tap the lid with an NFC-enabled device and get instant access to personalised content

NFC smart bottle technology

Sounds clever. But it is really necessary? I thought I’d take a look at NFC technology on packaging to see what potential future uses it could have for marketers, and whether this idea is just another QR code waiting to happen. 

What is NFC technology?

Essentially it’s a way to transfer data between devices wirelessly without the need for an internet connection. 

Unlike Bluetooth, you don’t have to manually pair two NFC devices. In layman’s terms that means you can scan something instantly without having to faff about. 

How has it already been used in packaging?

I mentioned the Remy Martin example above. Here’s how it works: the lid contains an NFC chip, and when you open the bottle the chip is activated. 

By tapping the lid with an NFC device like an iPhone 6 the user can then find out information such as whether the bottle is genuine. The chip can also tell you when the bottle was opened so you can see if it has been resealed. 

NFC smart bottle technology

NFC smart bottle technology

This all sounds very fun and gimmicky, but hardly reflective of the ‘constant quest for innovation’ Remy Martin claims to be on. 

But the real opportunity, it claims, comes from ‘targeted and relevant communication’ to its customers because the chip remains active once the bottle is opened. 

Remy Martin describes those communications as ‘a wealth of rewards and prizes,’ which sounds more bribe-like than actually useful or relevant. 

Johnny Walker

Remy Martin isn’t the first spirits-maker to release a bottle like this. Earlier this year, whisky brand Johnny Walker unveiled its own ‘smart bottle’. 

Again, the focus seems to be on customers checking whether the bottle is genuine or not. Given that black-market booze costs the UK economy £1.2bn annually (and that’s just spirits), it’s easy to see why these brands are investing in the technology. 

Johnny Walker, like Remy Martin, claims it wants to enhance its relationship with consumers and strengthen customer loyalty through ‘a new user experience.’

According to Davor Sujita, the CEO of the company that created the bottles, “the manufacturer can engage in a conversation with a consumer that is more meaningful.”

Again, though: why is it more meaningful? Am I missing something here? I understand it makes things easier for the consumer, but could the same personalised experience not be achieved by using a manually entered unique code?

Harvey Nichols

Not quite the same as the smart bottles mentioned above because it’s more of an in-store thing, but Harvey Nichols enabled customers to use tablets to interact with products via NFC tags on shelves. 

Upon scanning the tags the customers could see content related to those products such as Pinterest pages with pictures of people wearing the items of clothing. 

NFC tags on shelves

This isn’t necessarily an example of NFC technology in packaging, but I do think it highlights one potential opportunity: showing people genuinely useful, real time information when they scan a product such as blog posts or social media content.

Doing this gives marketers another way to push their content to a very targeted audience, direct from the product itself. 

‘On the go’ products

As I mentioned above, the ease with which people can scan an NFC chip to get instant information on their phone is probably the biggest plus point. It means people can access that information quickly while on the move. 

I can see this working more from a customer service point of view. If somebody is unhappy with a product, for example, they could scan the packaging and get instant access to contact details for the right department, saving them time and hassle. 

The internet of things

We’re all aware of the internet of things now, with products becoming increasingly connected with one another. 

So where does NFC technology in packaging fit into all of this?

When people try and explain what the internet of things is they usually refer to boiling the kettle via your television or some other easily relatable activity. 

But for marketers it could mean enabling consumers to talk directly with brands via their products. When somebody scans an NFC chip on a piece of packaging that could send real-time information directly back to the manufacturer.

This kind of information could be extremely valuable to brands, as it would enable them to see what is happening to their products once they’ve left the shelves. 

Will it catch on?

The question I can’t seem to answer despite having spent the day researching the subject is: what’s the point?

The marketing fluff always seems to be along the same lines: ‘consumers want a richer experience’, ‘they want a deeper connection with brands’, ‘their needs are evolving’. 

But is this really for the consumer, or is it just another platform through which brands can peddle promotional material?

If it’s the latter then I doubt consumers will take it up with much enthusiasm.

If, on the other hand, brands can find a way to go beyond the novelty value, I’m sure there are plenty of possibilities for future use. 

I’m not 100% convinced yet, but I’ll happily take any comments from people who are. 

Jack Simpson

Published 14 July, 2015 by Jack Simpson

Jack Simpson is a Writer at Econsultancy. You can follow him on Twitter or connect via LinkedIn.

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Pete Austin

Pete Austin, CINO at Fresh Relevance

Re: "the chip remains active once the bottle is opened". Oh boy. I like brandy, but I have better things to do than work out ways to disable this, so I'll make sure to choose some other brand.

almost 3 years ago

Graham Charlton

Graham Charlton, Editor in Chief at ClickZ Global

Hi Pete, I wondered whether these chips were worth the effort and would achieve the 'customer engagement' the marketers desire, but I hadn't considered that they'd be a turn off for customers.

almost 3 years ago

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Andrew Davis, Co-Founder at Tapit

Hi Graham,

Great article, the awareness of NFC as an IoT enabler for global brands is beginning to gather momentum across a variety of sectors including the industries you highlighted above.

I 110% agree with your position on this technology for the use of useless advertising led initiatives is a waste of time and effort however there is a larger and more exciting opportunity to bring valuable services to consumers using the technology in a way that is compelling both for the consumer and brand beyond simply advertising content (ie 30 second TV ads).

When I say valuable services think about things like instructions (resulting in less paper printing) where you could tap your Chromecast product box or Ikea furniture package and receive a step by step video on how to set-up / build, warranties where you can simply tap and redeem your product warranty vs. filling out a paper form and then sending it via post in an envelope.

Or like we just demonstrated with Gemalto in Cannes, brands like Lego can evolve their product packaging into a sales channel by allowing one-tap buying for digital content like games that compliment the physical product they just purchased in-store. All of a sudden millions of Lego product pack become a sales channel with a simple tap of the phone and no app or credit card is required as the charge can be instantly applied to their phone bill. This could be embraced not only by toy makers but also gaming, healthcare and CPG companies.

By making things just a simple tap away, it's the easiest and fastest way for consumers to get useful content on their phone. In this respect it even disrupts search as it is less button typing than going to Google. What's best is you don't even need an app which is another huge advantage. vs things like QR codes and Beacons which severely impacts scaling as most people don't want to download an app to interact with these physical "things"- it's the I can't be bothered mentality of most consumers today especially youth who want instant engagement.

Tapit has deployed more IoT projects for brands than any company in the world. Our clients include Google, Microsoft, Nestle, P&G and Coke to name a few. We firmly believe that global brands will embrace this technology more in the future and we are obsessed with making sure the consumer experience is compelling. Brands are beginning to understand this and will invest more in producing this type of service orientated content as we move forward.

Once again, well done on a great article and raising important questions that must be answered in order for the IoT ecosystem to succeed within a marketing context.

almost 3 years ago

Simon Liss

Simon Liss, Head of Innovation at Omnifi

Hi Jack,

Thanks for such well-balanced article, refreshing to see 'innovative' marketing tech being given a proper sanity check. What is the real value for consumer's here? That should be the key question.

I think consumers should require and expect products to be genuine, and to be packaged and distributed in a way that ensures fakes can easily be spotted and removed from the supply chain. They shouldn't have to investigate each bottle of spirits they buy with an app. This issue is for the manufacturers to solve, not the end user.

But let's not pretend this is about fake products, no the real aim here is to collect customer data, and in return they are getting ‘targeted and relevant communication’ , 'a wealth of rewards and prizes,’, 'meaningful dialogue' - all IMO absolutely worthless. Customers don't need or want a dialogue with the brand or a bottle of spirits, they want value and quality, What does anyone need to know about a bottle of booze beyond what is communicated by the branded packaging and by its taste? Anything else can be found on google. A dialogue? No, that's what you have with real people at the bar. Although I must admit, spirits can help.

In some contexts connecting people with online information about products easily is a genuine need. I'm sure not it really applies to FMCG goods like these, even at the luxury end, but can certainly apply to other bigger ticket and more complex items like cloths, electronics etc.

Like QR codes before them, all NFC does is encode a small piece of info (here likely to be a URL) and like QR codes, it's not as simple as 'just a tap' - firstly you need an NFC enabled phone, secondly you need NFC to be turned on and thirdly you need to communicate that the item can be 'tapped' and what the benefits of doing so are to the consumer. Not that simple and not what customers are typically doing. Right now NFC campaigns or NFC enabled products require people to go outside of their normal behaviour patterns and adopt something that is not a typical process. That, in my book, is not an efficient way of going about things. It might be 'innovative' but it's not very practical.

Typical processes nowadays are things like; googling it; asking a member of staff; reading the packaging with their own eyes etc. That's how people interact with products. Find a mechanic that leverages these typical processes, mirrors them or makes them easier to get from a product to useful information, then you are on to a winner. But I think that's pretty hard and would question whether its really worth the effort when it comes to FMCG products.

The value exchange is key. I expect all the bottles I buy not to be fake, I don't want a 'dialogue' with an alcohol brand, but offer me usage instructions for a complicated product via NFC, as suggested by Graham, then that might tip the balance more in the direction of a fair value exchange. Effort in = reward out, that's the key - lead with consumer value, not technology, and you're much more likely to succeed.

almost 3 years ago

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Andrew Davis, Co-Founder at Tapit

Hi Simon,

Completely agree with the value exchange, it has to be compelling in order to succeed. The Google comment raises an interesting question, if people can tap to source content and information that is contextual then it is easier than searching as it avoids various keystrokes by the user and having to open up the browser, etc - granted in certain situations but it still is easier to get than typing into a search box or manually typing the URL and this is what is so beautiful with NFC from a user perspective.

The learned behavior piece I also agree with however this is changing as the amount of services leveraging "tapping" is increasing exponentially. Apple Pay, Android Pay, getting on the London Tube, pairing your speakers, etc all involve tapping your phone and using NFC so the more services that use this tech the more that learned behavior evolves over time. We have always believed that the payments space would drive this behavior change with consumers and you will see this with Apple, Google, banks all promoting payments using your phone and "tapping".

The question we like to ask is that if this isn't a mainstream behavior today, why are companies like Apple, Google, Mastercard, Sony, Orange, Transport for London, Microsoft, etc investing billions of dollars rolling out systems that support NFC / tapping your phone? Because they know it will come with more and more services that support the tech.

When we first started Tapit in 2011 there were 30m NFC phones globally, today there's 1 billion and this is increasing exponentially given the majority of new devices include NFC as a standard feature (Samsung, Motorola, Nokia, Microsoft, Apple, LG, etc). Most of these devices come with NFC turned on given it does not consume battery in the ways that WiFi or Bluetooth work, it only consumes battery when the phone comes into contact with an active signal (a NFC tag, NFC terminal, etc). The amount of phones that come with NFC on out of the box will only increase as handset makers like Google, Samsung, Microsoft and Apple have pre-loaded services on the phone that support NFC (ie wallets) as turning off NFC would result in less up take of these pre-loaded services, it would also diminish the value of their other electronics which support "tap to pair" like Beats Headphones, Sony Headphones, etc.

Lastly, your comment on an NFC chip being like a QR is incorrect. NFC chips are not a printed image and share attributes more akin to their semiconductor cousins whereby they can become more powerful over time (Moore's Law) and also perform much more complex and multipurpose tasks as opposed to a static QR code that is as you say purely holding a single form URL. Here's an example of what I mean by that which uses induction from the chipset to power LEDs, a QR code cannot do this type of task http://bit.ly/1J0Vwkx

Hope this helps.

Best,
Andrew.

almost 3 years ago

Andy Headington

Andy Headington, CEO at Adido Limited

Some great comments on here and all valid in one way.

Whilst this still feels a bit 'so what' still at least they should be commended for trying something a little new and hopefully more engaging.

To echo Simon's point above, this or any other technology has to ADD VALUE. No point in coming up with some new tech to effectively show users adverts in 'new and interesting' ways. Who wants that? Absolutley no one. That's why banner clicks throughs are in the tenths of 1%. It is up to us as marketers, advertisers and agencies to think creatively, think about what the audiences and people actually want and give it to them as best we can, not just be lazy and pump some generic junk out there.

We must all aim to do better with this or any other new thing that comes along.

almost 3 years ago

Simon Liss

Simon Liss, Head of Innovation at Omnifi

Hi All,

I think this is really healthy debate, and for me perhaps boils down to one key question, when does a new technology become useful and a legitimate part of a marketeer's arsenal?

Andrew, all your comments about NFC are spot on, and I agree that, in principal, it is a useful technology. The key for me (and I've experimented with all the latest technologies, from AR to QR and now Beacons) is when these technologies reach critical mass in terms of customer adoption.

Let's be honest, NFC isn't there yet. It might get there, and its clear some people think its worth investing in, but right now its a niche technology in terms of raw consumer adoption. Fact.

Can I sell niche technologies to clients who want to know that they are getting maximum ROI? No I can't.

Can I encourage clients to experiment with nascent technologies in the hope that these learnings will prove valuable in the future? Maybe, but it's a hard sell. Especially so if we are honest about adoption levels and the fact that some great technologies simply melt away - not because they are bad technologies per se, but because they don't secure the consumer or industry buy-in required to push them into mass-market territory. Think Betamax Vs VHS, it's not always the best technology on paper that wins out.

So, by all means, experiment, push new technology, but be realistic about the engagement rates you'll achieve - otherwise you'll have clients turning off not turning on to what might one day be a really useful mainstream marketing technology.

almost 3 years ago

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Andrew Davis, Co-Founder at Tapit

Hi Simon,

Completely agree on the mass adoption piece, as more NFC enabled services roll out the greater consumer adoption will be, this is already evident in countries where NFC services are available at scale.

As for brands rolling out this type of stuff, I agree with your comments but I add that not doing anything until things get mass adopted is a self fulfilling prophecy that leads to no progress or innovation whatever industry you work in. Imagine Ford saying I am not going to make cars because nobody is driving?

Every conference or event I attend with brands / agencies constantly reinforces that brands are looking to embrace innovation and introduce new ways to reach consumers that are constantly connected via their smartphone devices.

This technology while still in its early days of being embraced by brands on a global scale is a powerful way of interacting with consumers, not needing an app is a killer feature that brands love because its one less (and extremely cumbersome) step the consumer has to do. Tapping is actually easier for the consumer than searching.

As you say, if you manage your clients expectations and craft the user experience I believe you will begin to create really powerful ways to connect your brands with consumers via a simple tap.

Not doing anything until its everywhere is missing an opportunity for your business and also your clients. Just ask Kodak how that strategy worked out:)

over 2 years ago

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