The adoption rate has been slow in the past due to financial constraints. Prices have decreased in recent years. In addition, technological innovations have increased at a rapid pace.
Make your business more attractive.
Consumers benefit from smart labels more often than most people realize. According to Andrew Palmer, director of sales, labels and forms, RR Donnelley, a recent NielsenIQ survey showed approximately 72% of shoppers find transparency to be important or extremely important, and 64% of shoppers say they would switch brands if provided in-depth information beyond what’s on the label.
“When discerning shoppers use QR codes at the point of purchase to learn more about a product’s ingredients or a brand’s responsible sourcing practices, they have smart labels to thank,” notes Palmer. “When consumers check online to see if items are in-stock at the retail location near them, it’s likely RFID labels affording them the convenience. Smart labels provide more than just product information. They also help consumers to connect with a brand, authenticate them, and sometimes even provide an incentive for purchases. It is therefore important to educate consumers on the benefits of smart labels and incorporate them across more industries.”
Avery Dennison uses the term “intelligent label” to refer to this market. Data-driven insights have never had a greater impact on businesses and new ways to engage consumers. Avery Dennison’s atma.io is a platform which unlocks connected products by giving them unique digital IDs. This ensures end-to-end transparency by tracking, storing, and managing all the events associated with each individual product – from source to consumer and beyond to enable circularity.
Fedrigoni Paper, which has acquired Acucote and Tageos, will supply unsupported and supported RFID transfer tapes, as well premium materials options.
“RFID is one key technology to make labels smart, and it is surely the technology that offers the most options, varieties and security levels, and represents the widest range of performance,” explains Karin Fabri, chief marketing officer, Tageos. “As a result, RFID inlays and tags are at the very heart of many, if not most, ambitious smart label offerings. We are even more specific at Tageos and define smart label as labels which can provide a unique digital identity for any item. Ultimately, we define smart labels as labels that enable RFID-based product digitization.”
Schreiner MediPharm says RFID technology has several key characteristics. “UHF (Ultra-High Frequency) RFID tags are ideal for bulk identification of a large number of items at unit level, and can be read with handheld readers or fixed system/hardware solutions,” states Arne Rehm, senior product manager of RFID/NFC solutions, Schreiner MediPharm.
Smart labels have endless possibilities. They can combat counterfeiting and diversion of products, provide track and trace capabilities, engage consumers, and drive brand recognition.
“I think it’s a great tool for consumer engagement and for consumers to confirm the product they are purchasing is not counterfeit,” notes Michael Brice, vice president of sales and business development for INX International Ink Co. “The brand owner benefits from smart label technology that employs a security feature such as a taggant. Brand owners are losing billions in revenue due to diversion and counterfeiting. This would put a dent in it while ensuring consumer safety.”
The manufacturers of press and converting machines have also been working tirelessly to encourage the adoption of RFID technology. Mark Andy has been working with Tamarack since the early 2000s on RFID applications. Mary Andy provides the press, web handling platform and mounting platform. Tamarack provides the unwinding of the inlay, as well as its conversion and application. Tamarack supplies the hot melt system for applying adhesive to the inlay.
“Mark Andy and Tamarack have an excellent working relationship,” remarks Greg Reiter, senior applications engineer, Mark Andy. “We work closely as advances in technology change. Press technology is one of the advances. The mechanical 2200 press was the first and we have now upgraded to the P7E servo-based platform. Tamarack’s rapid changeovers and multiple streams have been added over the years. Inlay reading has advanced significantly through the years.”
Inks also play an important role in smart labeling, beyond the equipment and inlays. “INX’s various ink formulations enable the printer/converter the ability to deliver to their clients a truly smart label solution,” adds Brice. “Our inks can contain a taggant, which will serve to verify the product is authentic and prevents diversion of products. These solutions can be in both a static (flexo, offset, metal deco and coatings) or variable format (NW UV/LED inkjet inks and CIJ inks).”
Can you NF (C) me?
In the past, brands were reluctant to adopt smart labeling. Price is not an issue for luxury brands such as Diageo’s high-end alcohol bottles. Most brands, however, did not consider the cost of technology feasible.
There are many advantages to using smart labels, even if they seem expensive. “Like with any new technology, brands may have been reluctant to invest in RFID labels due to the upfront investment it would take to switch over to RFID labels and hardware, in addition to training workers on how to use them,” explains RRD’s Palmer. “However, the investment in RFID labels can deliver a worthwhile return with savings gained on process and labor efficiencies. Additionally, RRD’s team aims for a seamless transition by helping its customers adopt RFID labels within their existing infrastructure, mapping incremental improvements further down the road, and assessing return on investment.”
Cost is no longer a major deterrent. The technology also helps with logistics in the supply chain, something that is on everyone’s mind, more than ever. Although price was a barrier, there are more converters and brand than ever before who have mastered the journey.
“In general, smart labels must compete with traditional – and usually cheaper – labels and therefore, must prove their economic viability,” states Tageos’ Fabri. “However, experiences show that our partners and customers consistently, extensively, and very successfully meet this challenge and return on invest.”
Technology helps to overcome many challenges. “During the early days, users were worried about information security – an understandable reaction to any new, powerful technology,” says Avery Dennison. “The RFID industry has worked together to prepare standards to ensure information security. Product capability is improving. New developments and innovations have driven robustness and enabled stable performance even in the harshest conditions.”
According to RRD’s Palmer, the most prevalent consumer-facing application is the use of QR codes to provide access to product information that can’t fit on the label alone, delivering more information to empower educated purchasing decisions. RFID labels, on the other hand, are used by businesses to manage and track inventory at all points of sale and throughout the supply-chain.
“Scanning an RFID label will tell you about the product origin, movement, and destination,” says Palmer. “By scanning RFID labels at different touchpoints, from production to the point of sale, businesses can identify inefficiencies in their supply chain, improve inventory forecasting, and mitigate supply chain challenges. With a number of major retailers now mandating RFID label usage, in order to improve their inventory management and security, RFID labels are becoming utilized more and more.”
NFC tags (Near Field Communication), which are available on smartphones with NFC capabilities, allow data to be exchanged and launched via mobile applications or websites. They also provide additional authentication and data. RFID/NFC labels can be made to look like existing label designs, as RFID/NFC is very thin and flexible.
NFC technology is used in a variety of ways. Examples include digital product authentication via smartphones, first-opening indications for medicine containers, injection devices and interactive support to help patients and their medication adhere, as well communication between consumables and medical devices using the lock-andkey principle.
“We are seeing strong recent growth for these applications,” says Schreiner MediPharm’s Rehm. “This is primarily due to the fact that the support of the mobile devices (iOS and Android) has only been implemented comprehensively for a few years.”
Schreiner MediPharm’s NFC-Label solutions offer several benefits in the growing market for self-injection and home care. By equipping pens and autoinjectors, with NFC-Labels, they become smart devices that enhance product safety and drug administration. “Via their smartphones, patients can get digital product information and instructions for use per video, keep digital diaries for medication adherence monitoring, or check the authenticity of a drug,” comments Rehm. “In addition, digital first opening indication is possible to ensure product integrity until the point of use.”
Label converters did not hesitate to invest into smart labeling. The interest in smart labeling has been largely centered on the feasibility of entering this once-challenging market.
“With the proliferation of smartphones, there is no barrier for a consumer to access smart label information or data,” says INX’s Brice. “There are some who are concerned with cyber security and sharing personal data. The cost of the devices needed by label printing companies has been a hurdle, but as the smart label industry grows – and is expected to do so significantly – the cost of the devices will come down. If the projected growth of the smart label industry is any indication, the barriers and hurdles are diminishing.”
“Tageos’ customers and market partners are highly committed in smart labeling,” adds Fabri. “New, commercially viable solutions are being developed virtually every day and spark the high demand for our RFID inlays and tags.
“The attitude toward smart labeling products and solutions continues to be very positive,” she continues. “Hence, it’s no surprise that the global RFID and smart labeling market is experiencing vast growth rates for years and will continue to do so.”
What should a convertor do to get started? Mark Andy says that the process starts with huddling up with a sales representative.
“A consultation with your sales rep can help you understand where to start,” says Reiter. “The sales reps work closely with Tamarack to help you with the correct questions to ask, so you can develop a plan. Understanding typical label questions about web material, color, quantity, and press speed is important. The RFID questions you will need to answer are wet versus dry inlay, inlay size, label repeat, and how many inlays across the web.”
Smart markets
Smart labeling is ideal for a wide range of end-use applications. The pharmaceutical and nutraceutical industries are primed for this technology.
“UHF RFID offers the ability to track RFID-equipped containers and other medical products at unit level in hospitals, enabling automated inventory and supply chain management in real time,” explains Schreiner MediPharm’s Rehm. “As this provides so many benefits – it reduces errors, enables automated replenishment of the hospital pharmacy, helps manage potential product recalls and ultimately also saves money – this application shows strong growth in many hospitals.”
Schreiner MediPharm is a company that has created a wide range of products, especially for the pharmaceutical industry. “We have developed a unique portfolio of label designs and features to optimally support the special requirements and use cases of the pharmaceutical and medical industry,” says Rehm. “For example, our RFID-Labels for prefilled syringes offer diverse opportunities in hospital environments by optimizing processes, enhancing product safety and helping avoid medication errors. Each syringe gets a unique digital identity, which facilitates automatic tracking and enhances transparency.”
But smart labeling also offers opportunities in many other sectors, including retailing, food and agriculture and automotive. Many brands have begun to require the use of smart labeling.
“Applied to sectors such as retail, manufacturing, logistics, pharma and healthcare, and many other industries, there is a broad variety of relevant use cases that it’s hard to select the best ones,” explains Tageos’ Fabri. “Today, the retail segment has yet the highest adoptation rate, but we also see other segments adapting and growing very fast. Hence, in highly developed societies, almost everyone is already involved in smart labels and RFID, but yet not everyone is aware of it.”
Avery Dennison also targets food, wine, and spirits for different reasons. RFID can reduce waste, not just by increasing engagement. Avery Dennison claims that more than 1.3 billion metric tonnes of food are wasted every year. “Intelligent labels can help to significantly reduce this amount, saving money while enhancing safety,” the company says. “They are also used to increase supply chain transparency and help stores monitor expiration dates and returns. Intelligent labels offer consumers protection from dangerous counterfeits – a serious challenge for the wine and spirits sector.”
The growth is not limited to obvious sectors. “Smart labels are finding their way into every aspect of the supply chain,” notes INX’s Brice. “Pharmaceuticals, nutraceuticals, cannabis and beverage – especially alcohol brands – are all embracing them, but are also leaning toward implementing security features in the label or package to ensure that their products are safe and make it to their intended outlet.”
More and more markets are expected to join in the future. “In the future, the demand for RFID is expected to continue growing as more industries recognize its benefits,” comments Trisha Smith, marketing and business development manager, Mark Andy. “The aviation and automotive industries are already starting to adopt RFID, and the rise of the IoT will likely drive further demand. RFID is expected to play a major role in the optimization of business operations and supply-chain management.
“Overall, any industry that requires efficient inventory management, asset tracking, or supply chain optimization can benefit from RFID technology,” adds Smith. “Its ability to provide real-time data, increase visibility, and streamline operations makes it a valuable tool for businesses looking to improve their bottom line.”
RR Donnelley develops and manufactures RFID tags that meet the demands of major retailers. “As this technology becomes increasingly critical to streamline inventory management, more consumer packaged goods (CPG) brands across a wide range of product categories will need to invest in item-level RFID labels,” states RRD’s Palmer. “These factors contributed to RRD’s expanded RFID label offerings, which offer expertise in helping companies integrate RFID labels seamlessly into their existing infrastructures.”
“The bottom line is that a smart label must deliver real added value to the user,” adds Rehm. “The label is only one part of a holistic solution – if it is done right, users are usually quickly convinced of its usefulness. For example, hospital staff saving time that can be used for other important tasks.”