The future of the packaging industry will be influenced by a range of disruptive themes, with artificial intelligence (AI) being one of the biggest to have a significant impact on packaging companies. Where should food and drink brands invest to ensure they keep up with the rest of the FMCG industry? Adam Sears, VP of Client Service (UK/IE/AUS) at Equator Design, tells us more.
When ChatGPT went ‘viral’, it reinvigorated the discussion around AI and the roles of humans and machines in society. It’s true; AI is shaping and influencing all industries. When used correctly, it can give businesses a competitive advantage, and, as time passes, those who do not learn to understand its applications will simply fall behind.
But what does ‘artificial intelligence’ mean exactly? To use McKinsey’s definition, “AI is the ability of a machine to perform cognitive functions typically associated with human minds, such as perceiving, reasoning, learning, interacting with the environment, and problem-solving.”
Understanding consumer motivations
AI’s ability to collect vast swathes of data and use them to build sophisticated models of audience behaviour is one of its superpowers, giving brands valuable insights and enabling them to effectively segment their customers. As an example, retailers looking to roll out or redesign tiered own-brand ranges, from entry price point to premium, could make use of this kind of in-depth analysis to inform their packaging decisions, shape their value propositions and target their marketing efforts.
Meanwhile, machine learning – a subset of AI – means computers can identify patterns in data and ‘learn’ from them to make improvements. For packaging companies, this iterative approach could be used in the design process. AI-led A/B testing, for example, could allow brands to identify the designs and messages that resonate with consumers without sinking huge amounts of time, energy, and people power into the process (i.e., doing it manually). The results of such an effort would clearly be strategically advantageous.
Connecting consumers and brands
When it comes to creating campaigns that engage with consumers, AI can be used to great effect, as demonstrated by drinks brand Snapple, which created the ‘Snapple fAIct Generator’ to celebrate the ‘Snapple Real Facts’ that have featured on its packaging for 20 years. The AI-powered tool, which can be accessed via QR codes on the bottles, can create facts about any given topic, prompted by users entering an adjective and a subject. It’s a brilliant way of utilising AI in packaging to deepen the connection between brand and customer.
AI can also be used to improve the omnichannel experience; specifically, through predictive analytics – the use of past data to predict future events. In a retail environment, this can take the form of gathering and analysing consumer data through things like loyalty cards and user mobile applications. It enables brands and retailers to understand what consumers want as well as how and when they want it, allowing them to hone their marketing attempts accordingly and ensure consistency across multiple touchpoints, whether online or in-store.
Another interesting, albeit controversial, angle for retailers is the use of advanced AI technologies that are trained to read facial expressions. In 2022, researchers from Australia’s Queensland University of Technology identified new ways for retailers to use AI together with in-store cameras, tracking facial expressions and using that information to inform store layouts.
This kind of technology can also be used to gauge shoppers’ reactions to products. According to researcher Dr Kien Nguyen: “Emotion recognition algorithms work by employing computer vision techniques to locate the face, and identify key landmarks on the face, such as corners of the eyebrows, tip of the nose and corners of the mouth.
“Obvious actions like picking up products, putting products into the trolley, and returning products back to the shelf have attracted great interest for the smart retailers… Other behaviours like staring at a product and reading the box of a product are a gold mine for marketing to understand the interest of customers in a product.”
For now, privacy issues may hamper the use of so-called emotion recognition algorithms, but it is certainly an area for retailers and brands to monitor.
Improving sustainability in the supply chain
In addition to improving the customer experience, AI also has the power to supercharge sustainability, as machine learning algorithms can generate more eco-friendly alternatives to packaging designs. An obvious example is Amazon’s PackOpt tool, which the retailer has used since 2018, to save roughly 60,000 tons of cardboard annually.
AI algorithms can also be used to monitor and track products throughout the supply chain. Recently, the Co-op joined up with Polytag, a labelling company that specializes in providing AI-based waste collection and circular recycling solutions, to trial a unique UV tag and QR code combination on its own-brand bottled water packaging. The aim is to gain greater oversight of these products as they move through the recycling chain.
Ultimately, for brands and retailers in the FMCG space, the best way to use AI is not – as some fret – to replace humans, but to help them make strategic decisions. In many cases, this means letting AI do the heavily lifting when it comes to making sense of large datasets, and letting humans act on its insights. The whole purpose of AI, after all, is to improve the human experience.