eMarketer Retail – June 5, 2017
By Tricia Carr
E-commerce gives retailers the opportunity to follow customers through the funnel, from discovery to post-purchase. But when a customer shops in the store, some of those opportunities are lost.
eMarketer’s Tricia Carr spoke with Davor Sutija, CEO of smart packaging company Thinfilm, about the challenges for brands in today’s digitally driven retail landscape, and how near field communication (NFC) technology can help them connect with consumers before and after they purchase a product in the store.
eMarketer: What’s the state of retail for brands that rely on both in-store and online purchases?
Davor Sutija: There’s a lot of competition for shelf space in physical retail stores, and there’s a lot of competition online from disruptors—the small companies that create cool products and market them on social media.
Brand power that was based on traditional mass advertising is eroding. Brands need to find ways to connect with millennial consumers and market to an audience of one with targeted, customer-centric messaging if they want to maintain their brand value in consumers’ minds.
eMarketer: What challenges has this new retail landscape created?
Sutija: With players like Amazon that deliver direct to the home, it’s not certain that brands will be part of the equation in the future. Consumers may view Amazon as the brand, rather than purchasing a leading brand [from Amazon].
In physical stores, the aisle is crowded. How do you get space for a new offering? How do you get feedback from consumers on what they like? It’s not only about the purchase decision in the store, but do they like the product and would they reorder it given the chance?
Learning about consumers is being mediated by Amazon, Facebook and Google. These platforms know what the consumer wants—not the brands and retailers themselves.
eMarketer: Thinfilm develops smart packaging with NFC technology for brands. Why are brands testing this new consumer touchpoint?
Sutija: The trend is to communicate with your customers in an omnichannel fashion. Product labels with NFC allow brands to not only connect with consumers in a retail setting, but also connect with them at home or wherever they use the product. Connecting with the customer at the time of consumption will be a critical change in brands’ omnichannel strategy.
eMarketer: What are the use cases for NFC technology in product labels before and after the point of purchase?
Sutija: It helps consumers decide what to buy, and help brands create a relationship with the customer so that they can ask for feedback. The consumer chooses when to tap the label [with their smartphone and unlock information]. Every time they tap, the brand can give them a different experience. It’s not only about the first landing page or a promotional offering; if the consumer taps again, brands can create an entire campaign with different chapters. [After customers use the product], brands can ask for feedback and allow them to join a loyalty program.
eMarketer: How does smart packaging with NFC technology compare to the way brands have used in-store beacons to connect with consumers in the aisle?
Sutija: NFC works by tapping your smartphone—that means consumers have to be close to the product. One of the challenges with beacons and other broadcast mechanisms is consumers feel like they’re being spammed. They turn it off, because they don’t necessarily want that marketing information.
In some cases, beacons are efficient. When you walk into a store you might want to get all of the coupons available. But NFC requires a pull from the consumer. It lets the consumer decide when they want to respond to a specific call to action and learn more about a brand. There are complimentary use cases for both technologies, but NFC is most appropriate when you want to engage with customers who are interested in your product.