The number of electronic devices that have their own IP addresses and connect to the Internet, in what is commonly
referred to as the Internet of Things (IoT), is forecasted to reach 80 billion by 2020. But there are other items
connecting to the IoT, too, not just electronic devices. That’s because everyday objects can now use embedded
NFC tags for connectivity.
A growing array of familiar consumer goods, including apparel, footwear, foods and beverages, cosmetics and
pharmaceuticals are now becoming smart and cloud-connected. They use a unique electronic ID, in the form of an NFC
tag, to interact with tag readers and go online. As more products in the consumer packaged goods (CPG) sector
connect to the Internet, the lines between the digital and physical world continue to blur. The Internet of Things
is becoming the Internet of Everyday Things.
A recent study by Vandagraf
International, a leading market-research institute, forecasts the total market potential of
connected packaging and labels will jump to 1.2 trillion units in 2021 and 1.5 trillion units in 2026.
What’s behind this rapidly growing trend of adding connectivity to consumer products? For many brand owners,
its versatility, made possible by dynamic year-on-year growth of NFC devices. The NFC technology used to
power smart, connected products and packages is remarkably flexible, and enables a wide variety of applications,
including new levels of pre- and post-sale consumer engagement, location awareness, robust brand protection, tamper
proofing and parts configuration.
More options = greater ROI
NFC is a seamless, intuitive IoT connectivity technology. On-item electronics connect products to the web, by simply
tapping products (or packages) with a smartphone, or by placing them on or near smart reader devices. The IoT is
based on securely collecting IDs and data from such devices and communicating that information to the cloud, where
products have their own addressable digital profiles and can exchange data in real time. NFC works with proximity
reading capabilities (up to 10 cm), and is also compatible with vicinity RFID reading capabilities (RFID up to 1.2
meters).
Three application layers for multi-function
versatility
NFC technology uses three application layers to manage the data associated with a product. These layers make it
possible to capture, store, present and analyze many different categories of information, for multiple benefits.
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Intrinsic ID Layer:
Stores a secure ID on the electronic device to provide an assurance of
authenticity and provenance. Products must be authenticated before any interactions take place, thereby
providing an extra level of defense against counterfeiting and market diversions.
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On-Product Electronic Device Layer:
Stores smaller amounts of data on the product or
package’s electronic device. The on-pack data can, for example, confirm that the tamper loop is intact
and the package hasn’t been opened, or that the package has been stored correctly within its specified
temperature range. On-pack data can also link to a specific web address in the cloud to extend further actions.
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Off-Product Cloud Layer:
Stores relatively large amounts of data away from the product or
package, in the cloud. This is where brand owners can put helpful product information, such as online
instructions or product ingredients, for consumers to access. It’s also where data on product location
can be stored, so it’s easy to check traceability along the distribution chain (including transfer of
ownership), or contextualize consumer messages based on where the product is sold or used. The cloud layer can
also be used to store rich marketing data, for use with real-time customer interactions such as promotions,
online communities and brand experiences based on the product at hand.
A wealth of business cases
NFC’s three-layered application structure means brand owners can select from a wide variety of functions to
create a unique offering that meets their specific requirements. The end result is significantly more robust and
compelling applications and solutions, and a measurable return on investment. The table describes just some of the
business cases enabled by NFC.
The Multi-faceted benefits of NFC
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Brand protection: safeguard brands and control operations
Product authentication
Digitally verify that a product is genuine, anytime and anywhere in the world, by letting
businesses and consumers use unique product identifiers and secure authentication services
Product traceability
Assure product provenance and traceability, as each product can be assigned to geographic
area and distributor, such that any deviation can be detected and flagged
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Change of state: secure product integrity by monitoring internal/external conditions
Tamper evidence
Detect whether a product has been interfered with or opened prior to sale, within the supply chain or in retail locations
Product quality assurance
Assure a product’s correct handling profile, by noting quality checks have occurred or by monitoring and recording ambient environmental changes (e.g. temperature or humidity) during transit or storage
Usage compliance
Assure that pharmaceuticals are consumed correctly, by recording and time-stamping
consumption of individual items for example, smart blister packs
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Location-based data: determine actual location in the supply chain, at retail or after sale
Mobile proximity marketing
Target marketing messages at consumers based on their location when products are purchased or used
Data analytics for brand protection
Identify where clusters of counterfeits have occurred and plot them on a map to assist in the search for illegitimate activities
Data analytics for distribution control
Identify clusters of products at a wrong location (as with gray markets or channel diversions), so corrective action can be taken
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Consumer engagement: use products and packages to connect and engage with consumers
Consumer information
Give products and their packages the ability to embed electronics to couple data with apps,
cloud databases and analytics software. Deliver specifics that help consumers, such as product
features, use-by dates, provenance, usage instructions and more
Consumer experience
Engage consumers to create deeper, more lasting relationships, with things like after-sales
services, loyalty programs, social communities, e-commerce and more
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Parts management: equip appliances with built-in readers to automatically communicate with inserted consumables
Parts authentication and parts configuration
Identify branded consumables and accessories, and regulate use of authorized parts (printer
cartridges, brush heads, etc.). Automate the transfer of settings from accessories to the appliance,
thereby achieving the best, safest performance
Customer notification
Alert users, based on usage, when it’s time to get a refill or replacement, and then
link to a dedicated site for processing orders
NFC in the real world
Here’s a look at just a few of the clever ways brand owners are using NFC technology to enhance their
offerings and create deeper customer relationships.
- Easier customization – Vitamix blenders When consumers place an
NFC-enabled container or cup onto the base of Vitamix’s new Ascent or
Venturist blenders, the appliance’s NFC reader automatically changes up to 140
parameters, making it easier to modify settings and safely prepare foods.
- Real-time social media access – Spyder skiwear As part of their support
for the U.S. Ski Team, Spyder embeds an NFC touchpoint in the logo on their ski jackets.
Tapping a smartphone to the logo lets skiers instantly engage in real-time social media with USST members and
share location-based information (e.g. snow conditions, trail maps, local point of interest).
- Consumer engagement and trends – Malibu rum Pernod Ricard UK, the maker of
coconut-flavored Malibu rum, outfits their bottles with a tag that lets consumers
access product-related content as well as instant prize wins and competitions with the tap of an NFC-enabled
phone. The technology also captures information regarding what content is accessed, and from where.
- Medication safety – SHL Medical auto-injectors Users of SHL Medical’s auto-injector can
interactively access important information and services from the NFC label with a smartphone, and can see a
color change on the label when a defined ambient temperature has been reached. Self-medication becomes safer and
more intuitive.
- Product authentication and enjoyment – Geantet-Pansiot vineyard estate Every wine bottle
from Geantet-Pansiot vineyard estate, in Burgundy,
France, is equipped with an NFC tag that lets customers authenticate the beverage and receive information about
the wine (vintage, production, serving temperature, storage, etc.) directly on their smartphone. The wine maker
also engages its distribution network with the same technology, to combat counterfeiting and gray markets.
Just the beginning The aggressive growth predictions for connected consumer goods, stated above, are
a strong indicator that NFC is a compelling technology for brand owners. NXP is helping brand owners take advantage
of NFC, by building on our position as a leader in the technology. We offer a full suite of fully-passive tags
(which derive power from the field generated by the reader), and a range of battery-assisted sensory tags that can
perform precise time and data logging while monitoring and recording the ambient conditions of goods as
they’re transported or stored.
As demand increases for smart, connected consumer products and packages, we’ll remain at the forefront.
We’re focusing on the next steps, by adding innovative security features and making tags even more suitable
for in-demand use cases, such as proximity-based authentication and proof of tag presence, and by expanding support
for every relevant operating environment, whether it’s online, offline, with apps or without.
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