85% of brands to increase investment in QR codes and NFC tech in next 12 months

Personalised consumer engagement is the key reason for an uptake of Near Field Communication (NFC) technology, with 85% of brands planning to invest in connected products, including QR codes, in the next 12 months.

That’s according to the second ‘Connected Experience Report’ by global solutions company SharpEnd, which helps brands and their suppliers connect each stage of the customer journey.

The independently conducted research from SharpEnd and Censuswide offers industry first insights into the adoption of connected experiences by global brands in-store and on product.

The insights have come from UK and US c-suite executives at more than 1,000 global brands across key sectors. The report looks into why and how brands are engaging with consumers.

Luxury brands have always remained one step ahead in investment in connected experiences and the report, which boasts contributions from several brands including a Giorgio Armani representative, shows that there is no sign of that changing.

In industries vulnerable to counterfeiting like luxury goods and pharmaceuticals, connected experiences not only offer a solution for verifying authenticity, but they also offer "a valuable tool to deliver full product traceability and brand transparency".

Other key findings from the report include:

• 96% 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% of brands are willing to pay more to be able to integrate Near Field Communication (NFC) into their products.
• 93% of brands will be using connected packaging as a part of their sustainability initiatives within two years.
• The primary incentives for brands to invest in connected technology are to create personalised consumer experiences and interactive experiences for brand engagement.

Cameron Worth, CEO of SharpEnd, said: "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.

"I’m happy to present the second volume of our independently conducted Connected Experience Report, and thankfully the data is on our side with brands clearly ready to scale."

The report demonstrates that businesses believe demand from consumers for QR codes (95%) and NFC (93%) is huge.

While QR codes are the more recognised packaging technology integration, the findings of the report also suggest an overwhelming preference for the use of NFC, which can be further unlocked by better education among brands surrounding its uses and benefits.

Additionally, 85% of brands said they believe their suppliers have the ability to incorporate NFC into their products and packaging, however currently only 51% believe they are doing so, suggesting "significant room for growth".

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 and wider media touch points.

First party data has traditionally been challenging for brands to access as it is held by retailers who act as the intermediary between brands and consumers, the report suggests.

However, connected packaging technologies enable brands to get closer to their consumers through virtual or mixed reality experiences, while generating their own first party data.

The report also shows brand marketers believe that one of the biggest drivers to invest in QR, NFC and Augmented Reality (AR) is to create more personalised consumer experiences (23%).

Despite the high levels of desire to use connected packaging technology to achieve sustainability goals, it highlights that 72% of brands are worried about being accused of ‘greenwashing’, so have limited customer outreach regarding sustainability.

This stresses a need for brands to adopt technologies and platforms they trust, and that allows them to share their product story in credible and sincere ways, highlights SharpEnd.

In January 2024, SharpEnd announced a significant investment and partnership with global materials firm Fedrigoni, which sees SharpEnd strengthen its position in the global market to develop new products and high performing integrated solutions using QR, NFC and Radio Frequency Identification (RFID).

Antonio Linardi, RFID Business Director at Fedrigoni, said: "The results of this survey uncover a very promising trend, confirming our long term vision.

"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.

"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."