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Advantages of Using Intelligent Packaging For Your E-Commerce Business

June 2021
Intelligent Packaging
Phillip Akhzar
CEO of ARKA, a platform for businesses to design and order branded and unbranded eco-friendly packaging online.
Many e-commerce businesses will easily agree with me that standard packaging is limited in so many ways. Most businesses have moved from using bland and boring boxes to custom-made corrugated boxes, but this is still not enough.

In recent times, consumer's needs in packaging have shifted from the need for a memorable experience with a product they ordered to a more intellectual satisfaction.

Today, customers want all the information they can get about what they buy and who they buy from. In addition to this, customers want to make sure they don't spend twice the price of a product on shipping. Intelligent packaging is packaging that responds to these needs and in this article, we are going to be discussing the advantages of using the intelligent packaging.

What is Intelligent Packaging?

In a less technical sense, intelligent packaging refers to packaging with extended functions. Intelligent packaging is packaging systems embedded in sensor technology to package food items, pharmaceuticals, and other types of products.
This type of packaging goes beyond consumer satisfaction to include new business opportunities based on digitization. Intelligent packaging also involves creating your e-commerce packaging based on product and package dimensions to enable you to receive new functions in the nearest future.

Intelligent packaging is relatively new, but its potentials can be noticed from a distance. An expert from IDTechEX also disclosed that the sales of printed electronic packaging will increase from $75 million to 1.45 $billion by 2023.

We have seen a considerable amount of technologies for intelligent packaging, but only a few businesses can afford to use them as a result of its high production costs.
The integration of intelligent packagings into a business may affect the overall budget significantly at first but the ROI it generates, in the long run, may prove to be the difference for the business.
We expect the cost of using smart technology for packaging to drop in the nearest future and companies are looking for ways to make it sooner than expected.

The Fraunhofer Institute for Modular Solid-state Technologies (EMFT) is working on the best way to develop sensory labels consisting of flexible silicon chips and modern films brought together by a rational roll-to-roll process.

According to a study, printable electronics that facilitate cost-effective production for mass production will be ready by 2021. Innovations like this will make use of intelligent packaging widespread.

Active Packaging vs Intelligent Packaging

Active Packaging 
Active packaging is building your package around the product's content.
This type of packaging interacts with the content of a product to improve its quality or shelf life during storage. A good example is when certain substances are released into the package or its immediate surroundings. Light filtering materials, oxygen, and ethylene absorbers have often been used to improve the shelf life of products during storage. In active packaging, the active agent may be integrated into the packaging or added separately in the form of inserts. The decision on which option serves a particular situation better is determined by the product's quality and dimension. A good instance of active packaging is when a beer is packaged in a plastic bottle. The plastic bottle usually contains an oxygen absorber in the screw cap that extends the shelf life of the beer from three to six years.
Intelligent Packaging 
Intelligent packaging simply means packaging to monitor the condition of a product to capture and provide information on the quality of the product during transportation and storage. This type of packaging uses communication functions to improve the decisions taken by the business to improve quality, shelf-life, and overall safety. An intelligent package can perform functions such as sensing, tracing, recording, detecting, and providing important information on the current state of the product. To make use of this packaging option, businesses must be able to source hardware components like a time-temperature indicator, gas detectors, ripening indicators, etc. Technology allows you to perform several functions on a product package from a distance. For example, you will be able to change the level of oxygen in a product without necessarily having the product at hand.
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Advantages of Using Intelligent Packaging

Intelligent packaging has proven to be very effective in the last few years. Still, only a few businesses have integrated this type of packaging into their e-commerce business. There are four important advantages of using intelligent packaging and they include:
Help Customers Make Better Decisions
The smart codes that are embedded on packages provide customers with a lot of important information about what they paid for. The need for information is growing every day. In recent times, customers want to know everything ranging from how you source materials to your production process before they buy from you. To meet their demands, manufacturers must be willing to provide important details one way or the other. Instead of doing an ad or organizing a campaign to inform them about the product, you can tap from the host of opportunities intelligent packaging offers. Firstly, smart codes can supply information on sourcing, nutritional values, dietary concerns, etc. to the consumer through a QR (Quick Response) code.
Information like this makes your business transparent. Customers will not only trust you, but they will consider your business to be more responsible than others.
In addition to this, technologies like radio-frequency identification, and near-field communication also help customers understand a product better.
Quality Control
Most brand's reputation is tied to the quality of what they offer. One of the major concerns of e-commerce businesses is to enhance the shelf-life of their products. Before you package a product, it is crucial to evaluate the impact of the packaging materials on the product. Some brands have destroyed their product while trying to give their cover a nice and clean look. Customers are not only interested in how the exterior of your product packaging is, they want to be sure the product is in great shape. Intelligent Packaging perfects both the outside and the inside of the product packaging. It goes beyond aesthetic to provide active agents that can protect the product from spoiling. For example, there are plastic bottles that change their colours to detect food spoilage. These bottles will also communicate the condition of the product to retailers and consumers.
Waste Reduction
Waste reduction in packaging is crucial to the success of any e-commerce business. Instead of shipping empty air, you can use algorithms that ensure the product packaging is as relevant as possible. The cost incurred while trying to hire individuals to transport packaging waste and the fees you pay at landfill sites may as well be channelled to other business growth strategies if only you use intelligent packaging. Intelligent packaging helps you optimize your packaging by eliminating the waste coming from all the filling materials used in packages. In addition to this, intelligent packaging makes shipping eco-friendly and reduces the harmful impact of certain packaging materials on the environment.

Relationship Between Intelligent Packaging and Your Firm’s Logistic Chain

One of the reasons why intelligent packaging was introduced is to aid the innovative presentation and distribution of your product. Intelligent packaging affects your entire logistic chain in ways that bring about opportunities for your business. Before now, the cost of shipping a product is determined by its weight, however, this method was considered unprofitable as packages took too much space compared to their weight. To avoid losing, most shipping companies will charge more for merchandise that should cost less if there was a method to calculate its weight accurately. Intelligent packaging will leverage technologies that will serve as the building block on the way to industry 4.0 in the packaging industry. For instance, intelligent packaging through the mass production of electronic printers in the transport sector makes the cost of shipping a product more accurate compared to a few years ago.
In addition to this, business owners can now boast of new interaction possibilities between them and a package in transit. Individuals can now track the transport route taken to distribute their product in real-time. And we expect that technologies like RFID chips will provide us with new possibilities in the nearest future.

What Are the Challenges of Intelligent Packaging?

1
Cost
Intelligent Packaging can be expensive compared to standard packaging. The use of modern technologies might generate further costs on production. As a result, companies may need to hire individuals with the prerequisite knowledge to handle packaging.
2
No Clear Regulation
According to the European Food Safety Authority (EFSA), under 1935/2004, active packaging is allowed in Europe. However, there are no regulations for both active and intelligent packaging at the moment. Companies can only comply with framework regulation 1935/2004/EC and 450/2009/EC. This means that companies can do whatever they want to stay ahead in the market.
3
Safety
Most active agents used in intelligent packaging are made from toxic inorganic and organic compounds, and solvents. If any of these materials find their way into the product, it may pose health risks to customers.

Conclusion

Intelligent Packaging is no longer just any trend in the packaging industry. It has come to stay, and brands are already benefiting from it.
We have discussed some key points in intelligent packaging, and we believe this information can change your e-commerce business for the better.
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