Million Insights’ October report on the global smart packaging market forecast that it would reach $26.7bn by 2024 and that among the chief driving factors, alongside rapid urbanisation and technological developments, would be a surge in consumption of cosmetic and beauty products. With the industry as a whole expected to grow at a CAGR of 10.6% for the forecast period, the sector seems set for a boom that will in no small part be based on the success of cosmetic product packaging.  

The report suggests that the food and beverage sector will likely dominate the smart packaging industry when it comes to market share, likely due to what can be done for increased food safety as the industry continues to battle trust issues, but cosmetic packaging is not without opportunities and manufacturers should look in particular to the North American market.

Although currently tightly competing with Western Europe, a report from Future Market Insights predicts that by 2027 North America will claim just below 26% of market share while Western Europe will fall behind to 21%. Also worth noting, in that same period the APEJ region is forecast to experience massive growth in the smart packaging industry and climb close to Western Europe’s market share. 

Despite these opportunities, Dean Frew, chief technology officer and senior vice president of radio frequency identification (RFID) solutions at SML Group, says that the cosmetics industry still has some catching up to do. 

”The fragrance and cosmetics market is currently behind other retail segments in leveraging RFID technology,” he explains. “This is due to the fact that packaging in this segment often has metal material in or on the packaging. The metal dramatically impacts RFID technology performance. 

“Another reason for the slower adoption is that very few retailers are requiring the fragrance and cosmetics brands to tag the products. This is the proverbial ‘chicken and the egg’ adoption environment.”

One of the biggest benefits smart packaging can offer is improved product safety. As consumers grow increasingly conscious about the ingredients and processes behind their products, particularly in relation to their health, they are going to look for brands to offer more transparency, especially in the wake of ongoing issues with consumer trust. Smart packaging techniques can help brands provide more information to their consumers, while also guaranteeing the trustworthiness of their product.

Smart packaging does not need to engage with gimmickry or complex technology but can instead provide simple, quality-of-life benefits to both manufacturer and consumer. A good example of a safety feature is the UWI Timer. Simple in concept, the timer tells a user if a container has been opened and how long there is left to safely use the product. 

Gillian Ewers, vice president of marketing at PragmatIC, says: “Building reputation is critical. But, with most loyalty schemes based on the retailer not the brand, it is difficult for brands to engage directly with their consumers. Smart packaging could change this, enabling a rich information set to be directly communicated, which could include usage advice, videos and provenance.

“The downside of such a healthy market, is of course it attracts counterfeits: there have been news stories of toxic chemicals in fake products bought on-line, and of course is it’s growing, $75m of fake pharma and cosmetics where seized in the US in 2015. Smart packaging could also be used to establish the authenticity of the product, with a rapid reporting channel back to the brand owner who will be able to use big data to hone-in on where counterfeits are coming from.” 

In addition to safety, smart packaging holds huge potential for enhancing the consumer experience, an area that fits neatly into the larger mega-trend of premiumisation currently impacting consumer industries.

As consumers increasingly look for products that provide more of an experience and do so with a higher sense of quality and commitment to authenticity, manufacturers must take advantage of every available tool to elevate the experiential qualities of their products. Smart packaging may allow them to do just that, providing as it does a new dimension of interaction between consumer, brand, and product.

Steve Irvine, creative director at Coley Porter Bell, explains: “Leading cosmetics brands have always embraced the more luxurious side of premium as they’re selling a dream. But premiumisation needs to go beyond just face value. Cosmetic brands must be authentic, true and really ‘live the brand’. 

“Desire and differentiation should be driven through clever thinking, much less through shallow or hollow effects. The brand should engage audiences to create new and exciting ideas that surprise and delight new consumers.”

By making use of technologies, such as near-field communication, brands can add an additional layer of interaction onto their consumer’s experience with the product. Tags can link consumers to a variety of information, from standard promotional materials to tutorials on how to best use the products. 

Consider the vast business of beauty products and the tutorial and review business attached to them, how these very visual products can fit into environments, such as Instagram; cosmetics are primed for a digital-driven boom. Smart packaging can help them get there.