Brands race to embed NFC in packaging as consumers seek trust

Brands are accelerating the adoption of connected packaging, with a significant proportion of consumers expressing willingness to pay more for such products, according to new research from io.tt and Pragmatic Semiconductor.

Consumer preferences

Findings show that 68% of consumers are more inclined to choose products featuring value-adding connected features. Almost half, or 49%, indicated they would pay a premium for products using technologies such as Near Field Communication (NFC) to provide transparency, usage instructions, or proof of authenticity.

The research also notes that 63% of consumers perceive brands more positively when they incorporate connected packaging to enhance transparency and engagement. Authentication, provenance, and ingredient sourcing emerged as the primary drivers for UK consumers when interacting with connected packaging.

Brand adoption

Businesses are responding to these preferences at pace. The report indicates that 92% of brands have already started embedding NFC chips into their products or intend to do so within the next year. This represents a sharp increase from just 24% last year.

Brands reported that supply chain transparency (47%), product authenticity (44%), and analytics (44%) are the leading motivations behind this shift. Data insights from connected packaging also allow for an interactive experience both before and after purchase.

Regulatory pressure

The transition towards connected packaging is being influenced by upcoming regulations such as Digital Product Passports, which prioritise transparency, compliance, and traceability. Brands see NFC-enabled packaging as a viable route to fulfilling these requirements while also enhancing consumer trust.

Regional insights

Consumer interests in connected packaging differ by market. While UK consumers focus most on authentication (31%) and ingredient sourcing (27%), their US counterparts are primarily interested in freshness data (28%) and ingredient sourcing (25%).

Additionally, 41% of consumers surveyed stated that they scan or tap product QR codes or NFC tags several times each week. When given the choice between two comparable products, 30% would select the connected option.

Drivers of engagement

The study identifies discounts and promotions (32%), usage instructions (30%), and authentication (29%) as the main reasons consumers engage with connected packaging. The potential for connected technology to inform and reassure buyers also extends to the growing market for second-hand goods. Some 59% of consumers said they would be more inclined to buy second-hand items if digital product passports were in use.

NFC technology benefits

Industry representatives highlight the practical advantages of embedding NFC in packaging, including its ability to provide secure digital identifiers and interactive product features.

"The cost of losing consumer trust cannot be underestimated. NFC technology gives brands a frictionless digital touchpoint by incorporating secure digital identifiers directly into products, giving every item its own verifiable record of origin and interactive features," said Ravi Shankar Sundaram, Senior Director of Product Management, Pragmatic Semiconductor.