The trend of Smart Labels refers to the use of printed paper, plastic, or fabric labels upgraded with special intelligent inlay technology that can digitally capture and communicate more information than is printed on the physical label. Technologies generally integrated in these labels include radio frequency identification (RFID), near-field communication (NFC), time-temperature indicators (TTIs), and quick response (QR) codes.
The need to label products spans all stages of a product’s life cycle, from supply chain procedures during and after manufacture to the provision of product information to the end user and disposal instructions (specific to products containing hazardous materials such as batteries). The type of information therefore ranges from tracking and condition instructions to date of production and material data – everything that traditionally was printed on a physical label.
Barcodes – the most commonly used form of product identification coding – first facilitated inventory management but, with a maximum storage capacity of only 20 characters, cannot convey detailed information. Compare this with QR codes which store over 7,000 characters. Their introduction gave us a new way of leveraging labels to provide product data. As all smartphones can now read QR codes, it is easy for consumers to scan these codes to reach digital platforms displaying all the product information they are looking for. Today, there are significant advances in labeling digitalization including the use of embedded sensors, printed batteries, and devices that enable person-to-product communication.
With a global market value of 9.5 billion USD in 2022, year-on-year growth of 9.6%, and a projected CAGR of 11.2%, the value of the global smart labels market is expected to reach24.8 billion USD by 2030.
Within logistics and the supply chain, smart label usage has significant impact. Here at DHL we see an increase in the adoption of these technologies to address various aspects of the customer experience and operational efficiency. From the availability of product information through the simple scanning of a QR code to being able to track a parcel or package along its journey to its delivery address, this trend appears on the Logistics Trend Radar with a relatively high impact and realization within 5 years. Although we are seeing current applications and use cases, we believe further development is required before smart labels become truly commonplace.
Smart labels respond to:
Relevance to the Future of Logistics
With rising consumer demand for shipment visibility, live location tracking of goods can be achieved with RFID technology embedded in labels. This capability is highly relevant to the customer experience and logistics operations. It also equips manufacturers to track products (particularly high-value goods) from production through delivery to end users. Start-ups like Wiliot enable customers, manufacturers, and logistics players to know shipment location using a low-cost smart label the size of a postage stamp. Powered by harvesting radio frequency energy, these labels capture data of their surrounding environment using Internet of Things (IoT) pixels, which then becomes available via existing Bluetooth devices. In the constant drive towards sustainable logistics, these low-cost solutions can also be reused as their battery power is generated through existing energy.
In addition to location tracking, there are also applications for smart labels to address a historically common challenge in the supply chain industry: counterfeit products. Particularly in the pharmaceutical, nutraceutical, and cosmetics sectors, counterfeit products pose a severe threat to corporate reputations and consumer health. This challenge can be addressed with the use of unique RFID or QR codes to verify product authenticity. More covert features to tackle counterfeiting can be found in labels using UV ink, ink taggant, and infrared ink (particular used with pharmaceuticals and nutraceuticals). These inks are only visible to or detected by more sophisticated hand-held readers. Hidden measures such as these allow manufacturers to monitor and ensure genuine goods do not fall out of the authorized supply chain. Tying each product’s unique identifier to blockchain technology also achieves a new level of security.
For groceries and nutraceuticals, there is increasing development of labels which allow the supply chain to enhance product freshness and quality, including color-changing technology to clearly highlight item condition to businesses and consumers. Similar applications include assuring cold chain integrity and providing visibility of package tampering and damage. FreshTag labels developed by Insignia Technologies provide such solutions, with labels that change color if food experienced a temperature excursion, demonstrating that smart labels can more accurately reflect product condition than static use-by dates. A top priority for consumer health is to scale these smart labels for the quality control of perishable goods, ensuring any item shipped to a distant destination through cold chain operations still arrives in a condition that is safe for human consumption.
With sustainability and cost reduction high on the logistics agenda, companies are opting to print digital product information directly onto packages, eliminating physical labels. This so-called ‘no labels’ approach still gives consumers the information they need to make informed decisions and enables warehouse operations to easily identify products.
Lending itself to the fight against fraud, start-up PixoAnalytics developed a unique code-generating technology using paper art. Each envelope or package is produced using paper that has a unique and natural paper structure (referred to as its ‘fingerprint’) which is used for unique identification. Similar to human fingerprints, these paper structures cannot be reproduced. Applicable to any product, and without increasing the environmental footprint of regular envelopes and packages, this technology also equips logistics providers with a tool to ensure customer parcels are not tampered with.
The ubiquitous use of QR codes allows information access and sharing and – with ever-increasing demand for instant information on parcel tracking, condition monitoring, and product authenticity – we here at DHL do not see developments in the Smart Labels trend slowing down. With imminent moves to eliminate the need for batteries to power certain labels, further adoption of sensor-enabled labels is very likely in the logistics industry. Impacting both suppliers and consumers, the drive to implement smart label technologies on a wider scale is accelerating development. And with sustainability at the top of corporate agendas globally, the interlink between smart labels and sustainability also acts as an undercurrent, propelling further technology development and solution scaling.
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- Future Market Insights (2022): Smart labels market outlook (2022-2030)
- Wiliot (2022): Intelligence for every single thing
- Resource Label Group (2021): Anti-counterfeit label solutions to protect consumers and your brand
- Labels & Labeling (2020): Smart and intelligent labels
- PixoAnalytics (2022): We are digitizing logistics with just a blank sheet of paper