Tech-enabled product packaging is the new frontier of data collection and consumer engagement for beauty brands.
The active lifestyle brand Yuni Beauty recently embedded near-field communication tags into its packaging, which allow customers to scan the code with their phones. The phones then show customers a giveaway offer, a short instructional video or the landing page for the brand’s website. Other brands like Valmont Cosmetics and Sara Happ, and retailer Sephora have also experimented with the technology.
NFC tags, along with similar smart labels like QR or RFID codes, allow brands to gather micro-level data like where, when and at what time a customer interacted with a product, which can be used to better understand customer behavior and engagement. NFC technology has gained popularity in the past few years for its use in contactless payment systems like Google Pay and Apple Pay, and is currently a built-in feature on Android phones. Because of this, there are approximately 1.9 billion smartphones expected to be NFC-enabled by the end of 2018, according to Statista, which means there is great scope for this type of technology as well as other smart labels.
“When we ship to retailers, we typically say ‘goodbye’ because we’ve lost touch [with the customer.] … What I love about this tech is being able to communicate with the customer at the retail locations,” said Peggy Fry, president of Sara Happ. The lip- and body-care brand is currently conducting a pilot phase of including NFC tags on display units instead of on the packages themselves and is exploring the option of adding them to packaging after initial results come through.
“What it really does is begin a relationship we wouldn’t otherwise have,” she said. The NFC code acts like a funnel by providing an opening for the brand to establish long-term communication with the customer — a valuable proposition for wholesale brands in the direct-to-consumer age. But the key is to get a customer to sign up after reaching the initial landing page, rather than trying to get them to continuously scan the code.
“The goal isn’t getting people to go back to the page but to sign up and stay in touch with us and learn more about lip care and lip products,” said Fry.
Meanwhile, Yuni Beauty opted to use smart labels because it wanted to minimize both number of steps and the time it took to get a customer to become familiar with the brand, according to CEO Emmanuel Ray. NFC tags also offer a variety of ways to engage customers, as brands can update what customers see and when; the tags can also be embedded seamlessly into the packaging without disrupting the aesthetic (Yuni Beauty simply added a note to the top of its Shower Sheets box so customer can see where it is), unlike QR codes which cannot change and are always visible. The brand began using NFC tags last month and currently has them on three different products — muscle gel Chillax, Shower Sheets and the new Yunicorn cleanser — with plans to offer them on more in the coming months.
“The products we make aren’t mainstream. Some of them do require a bit of education, [and] we like the capacity to educate without being there in person,” he said, adding that there are a few products that capture the bulk of sales for the brand and that NFC tags are able to inform customers about the rest of the product offerings. Additionally, with 40 percent of the brand’s sales happening through e-commerce, a smart label is able to familiarize and engage a consumer with its website for future product purchases.
“NFC [enables] us to increase the brand experience. So it’s not just used in-store to increase the level of conversion,” he said.
One reason NFC tags are gaining popularity in consumer goods compared to QR codes is that they offer the ability to offer different content, depending on the time of day or geolocation of the product, according to Bill Cummings, svp of corporate communications for Thin Film Electronics ASA, which worked with Yuni Beauty on its smart labels. Because the content is hosted on a cloud server with Thinfilm, a person seeing a Yuni Beauty product at a store in San Francisco in the morning can view something different than what they would see at home in the evening if they were in Boston, he said. These features also encourage customers to keep scanning the tag, as well, as there is more content for them to engage with. Right now, the NFC tags can only provide Yuni Beauty customers with one of three options whenever they scan, based on what was assigned during manufacturing of the packages: a video, a website landing page or a giveaway offer. However, the brand plans to evolve its content offerings and strategy as it gathers data from the tags.
“The important thing to remember [is that] because these tags are integrated into packaging, if the consumer buys the product, the brand can continue the conversation on the way home or at home,” he said, adding, “If a customer is in a Nordstrom or another retailer, there are many other top competitors, but with smart packaging, you are able to control the dialogue and experience, and drive engagement and consumer loyalty through to e-commerce.”
For Yuni Beauty, the long-term goal is to use the information gathered from NFC codes to build out a customer-loyalty program.
“We are all in the same battle for digital space and attention,” Ray said. “At the end of the day, we are trying to build a strong and loyal customer base.”