As an industry, we often focus on the challenges facing us. The economic conditions of the last few years have brought with them substantial trading difficulties, and there are other pressures too including the development costs associated with creating ever-more sustainable products.
However, these challenges represent only one side of the picture. The innovations that have continued to take place – both in technology and in business processes and structures – mean that ours is an industry well positioned to continue long into the future. Big opportunities are still out there, and drawing lessons from what has happened in the past is one important way to make the most of those opportunities.
Label commoditization is a significant issue across the industry. Design and functional packaging trends are impacting label production and leading to a more minimalistic approach – with simpler designs, fewer colors and less sophisticated finishing. When combined with brand owner pressure on label costs, the result can be a very basic approach to labeling and packaging. This can go to the extremes: who could have imagined, for example, the emergence of totally blank packets for cigarettes?
Converters and materials suppliers have to keep a close eye on this trend. My own view is that it presents us with a great opportunity for innovations – for example functional labels and reclosures. There is an incentive to create products that add value to the printed label, going well beyond its original functions of information, identification and decoration.
One of the most interesting areas where this is evident, and where we are already adding considerable value, is in the evolution of multi-functional labels.
The potential of smart labels extends far beyond the original tasks of a label. A whole range of smart label materials and converting solutions has been introduced over the past ten years, yet the industry seems to have been slow to exploit the opportunities that are now available to improve food safety, brand marketing, brand protection, traceability and more. So, how can we better meet these customer needs?
Interactive labels are one example of something that is very interesting to brand owners at the moment. We are about to see a transformation in the way that brands, through the vehicle of packaging, engage with consumers – linking them directly to brand content via a simple tap with a smartphone. Near Field Communications (NFC) has been around for some time, but is rapidly gaining momentum thanks to the proliferation of mobile devices. By 2014, 570 million phones will feature NFC technology, effectively changing the retail shelf experience. A typical scenario involves a consumer walking down the aisle of the local market, tapping a food product and instantly generating an e-coupon while also seeing a quick and engaging brand story. When putting the jar into a shopping cart, suggestions also appear of complementary products from the brand.
This is a brave new world for labels, and brand owners are actively seeking partners in the label industry who can make it all happen. What can at first appear to be a barrier to growth, or even a threat to existing products, can often become a new source of revenue.
Senior Marketing Communications Manager | Avery Dennison Label & Packaging Materials Europe