Making Real Connections in a Connected World

 

Seth Hillstrom (SH): 

I’m a walking stream of data points. And so are you. As we navigate a new world, one where not just every person – but every thing – is connected, marketers are tapping into power they’ve never had before. But as Spider-Man tells us, with great power comes great responsibility. Today we’re chatting with Markus Wulff, who has lead the connected revolution for The Absolut Company for over four years. We’ve got our questions for Markus, but we’d love to hear yours as well. Markus, thank you for joining us today!

Markus Wulff (MW):

First of all I would like to thank you for inviting me to the eBev sessions. Exciting times at the moment, I have recently started my own business within internet of things and connected packaging, doing the same things I have done for The Absolut Company but in a wider context. I still work with The Absolut Company as a client.

SH:

Congratulations. That’s exciting news! Markus, for those of us who know what you were doing at The Absolut Company, we know you’ve got a pretty exciting role. What does Digital Business Innovation mean to you, and what would you say are your core priorities?

 MW:

Thank you very much! So what is digital business innovation? Basically it is to identify business opportunities with technology, the alcohol business is a traditional business that have had pretty much the same distribution channels and business model since the beginning; on and off trade. It is a branding and marketing focused business that is about to change. The same with other FMCG brands and lifestyle brands in other businesses. Technology is the foundation of this change.

– By using digital to enable a better experience for the consumer, brands will shift focus from spending money on advertising to create added value for consumers for real. The packaging becomes a digital touchpoint which means that services and experiences will be the key to success for brands.

SH:

Connecting the consumers to the world around them (including to your products) comes with some incredible opportunities – along with a lot of potential distractions (shiny objects). Can you give me a few of the most powerful examples of how you believe IoT can be used by CPG marketers now and/or in the future? And on the other end, are there any uses you already see in the marketplace that you think likely don’t justify the investment?

MW:

Good question! The product will be the hero, not the advertising. Brands will use IoT to connect their products to a context where it’s relevant for the consumer. This can either be interacting with the packaging or the packaging or product interacts with things around you; lights, music, smart phones etc. Adding certain technologies can help brands make more informed decisions about enabling connected packaging.

There are these three types of new packaging:

Active Packaging 

Active packaging allows customers to engage with products that include additional product information and exclusive content controlled by the brand. Active packaging often involves special symbols like QR codes or advanced barcodes and generally doesn’t require expensive technology or special substrates.

Interactive Packaging

Interactive packaging includes specialty substrates and technologically advanced materials that are capable of communicating information. For example, some brand-name batteries can communicate whether they still have power left or bottles can communicate if they have the right temperature to be served. These unique features deliver additional value to consumers, and help dissuade counterfeiting.

Intelligent Packaging

Intelligent packaging sends and receives information for dynamic interaction with sensors. Whether using radio-frequency identification (RFID), near-field communication (NFC) or similar two-way communication technologies, intelligent packaging can add value to the consumer by 3adding contextual experiences to the consumer in both the digital and the physical world. If you interact with a bottle at an airport it can open up access to Airport lounges, or during the summer consumers get access to festival where the brand activates. it bridges activations between retail and digital. For brands this builds digital equity since their bottles becomes digial touchpoints they fully can control the experience of and by analysing data the brand will understand the consumer’s behaviors after the bottles have left the shelves. A bonus is that this also can be used in the manufacturing and distribution processes and across the supply chain.

SH:

Very powerful! So when it comes to long-run business impact…are you most excited by the convenience and value you can add for consumers, or the data getting generated by all of these activities?

MW:

I am excited about how brands will need to add value to consumers. But…this is an interesting topic, data is the trigger for brands BUT to be able to gather data there needs to be consumers interacting. This means that the main objective should always be to create added value for the consumers, then the data will come . This also means that brands need to deliver a very good added value for consumers otherwise there will be no interaction. You can’t link to a Youtube video and hope that consumers will your brand ambassadors, I would look into partnerships and to be both global and hyperlocal.

New challenges for brands and it will be the ones who deliver relevance with the help of technology that also can analyze data and have loyal consumers.

Cheryl Moody (Sr. Digital Strategist at Thin Film Electronics):

Great stuff Markus. Given how new the technology is, i’m curious what “value added” campaigns have been most successful in your experience?

MW:

Hi Cheryl! At the moment I am impressed of Nike’s connected NBA jersey’s that will give the owners pre-game videos and exclusive content from the team’s players. Good execution.

adidas is launching the new football with NFC chip in it and it will be used during the world championship this year.

Cheryl: 

Yep. We’re all watching the adidas campaign! Can you talk a little about the data you are seeing? What types of new information should marketers be expecting from an IoT campaign?

MW: 

I think this will generate lots of brands going into tech with their non tech products. Several brands in the sports category are about to launch new connected services and tools.

For most FMCG brands there is a black hole after the products has left the retailer’s shelves. Now brands can get real-time data about consumer engagement and its possible to crunch in different ways to get both quantitive data and qualitative data.

Cheryl:

Along with Apple Pay and Samsung Pay, we think that the sports application are going to fuel consumer education about the technology. A lot of people still haven’t discovered that their smart phones can trigger an awesome experience just by tapping the phone!

MW:

When analyzing data you’ll get who your real consumer is; interest, hyperlocal deviations, shopping patterns etc.

Cheryl:

Clearly you’re doubling down on Iot with your new consulting gig. How far out do you think we are until NFC is as ubiquitous as say, WiFi in terms of consumer understanding?

MW:

Correct! Sports brands have realized the potential of mixing their physical products with the benefits of consumer electronics, smartphones etc.

I see opportunities with new tech, for example NFC, that’s why I have created an innovation process for brands that are in the phase of connecting their products or packaging. I believe NFC is about a year from being a common interaction point, there will be a tipping point when P&G or Unilever connects a product category – consumers will interact and other brands will connect their products to become new digital touch points.

SH:

I totally agree Markus. In your LI profile, you talk about connecting products in the home environment, ontrade and offtrade, and smart packaging. While these all hold tremendous promise, I personally think smart packaging is one of the biggest opportunities for our space, as it has the two-way opportunity to “deliver gain” and “minimize pain” (as you put it) in all the right contexts. What do you think is the greatest opportunity around smart packaging?

MW:

The greatest opportunity will be that consumers will benefit from this. We do want to know if our food and drinks are fresh, unopened and that it’s not a fake product. Then we will see how brands will deliver on the opportunity to interact with consumers through the packaging, it’s a shift for brands so there will be some trails and errors I would guess. But then FMCG brands have transformed to delivering both physical and digtal experiences and it’s a part of the business models to deliver gain in everyday life to consumers.

SH:

So how do we take all of these potential cases and applications for smart technology, and find the right balance of connected convenience without crossing the line of being reckless with privacy, or worse? Do you think culture will shift as consumers get used to being a 24/7 stream of data points, or will they push back – as we see with ad blockers and other privacy technologies?

MW:

We’ve seen the big tech players crossing the line lately and that will of course be hindering brands from getting users to interact in new ways, with fmcg products. but… I believe there will be a shift where all packaging is active, intelligent or interactive. The consumers will demand real added value otherwise and there will be mistakes made by brands but in the long run I believe we will get used by objects around us go from static to smart. Yes people will push back but that’s just a healthy reaction to it, then it will be up to the brands to deliver even better added value to get the loyalty from the consumers. Brands will need to be creative and smart about how to deliver contextual added value, it’s not an easy task but it’s just a mind shift from traditional marketing to service led value creation. Tech will be the enabler of this, I am 100% sure of that.

SH:

Markus, thank you so much for chatting with us today and for sharing your perspective. These are some extremely valuable insights. I will leave it here, and for anyone with ideas or questions feel free to comment.

MW:

Thank you Seth for inviting me. It’s exciting times now when every business will be affected of technology. I say ‘Go All in’ to brands that are in the transformation right now.

 

For questions or comments please visit:  https://www.linkedin.com/feed/update/urn:li:activity:6359831612007411712/

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