Smart label
Smart labels are advanced forms of product identification and packaging that leverage technology to provide more information than traditional labels can offer. They encompass various technologies such as QR codes, radio frequency identification (RFID) tags, and electronic article surveillance (EAS) codes, enabling enhanced consumer interaction, inventory management, and anti-theft measures. QR codes, for instance, can store vast amounts of data—more than 7,000 characters—allowing consumers to access detailed information about products, such as nutritional details or promotional content, directly through their smartphones.
Smart labels are prevalent across many sectors, including retail, logistics, healthcare, and libraries, where they assist in tracking and managing items throughout their lifecycle. Notably, RFID technology allows for the reading of tagged items from a distance, improving efficiency in various applications, such as shipping and security checks. While the benefits of smart labels are considerable, there are concerns regarding privacy and information security, particularly with RFID tags being easily scanned.
Additionally, the regulatory landscape, especially regarding food labeling, has adapted to address public concerns about transparency, particularly concerning genetically modified organisms (GMOs). As of 2024, the smart label market is experiencing significant growth, projected to expand substantially in the coming years, highlighting the increasing importance of sustainable packaging and advanced labeling technologies in modern commerce.
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Smart label
A smart label is any form of product packaging or identification that uses technology to provide more information than could be listed on the product's paper or plastic packaging. Smart labels interact with other technology to provide information to consumers, help track and manage inventory, or provide anti-theft protection. Quick response (QR) codes, surveillance tags, and radio frequency identification (RFID) tags are all examples of smart labels. The technology is used by manufacturers, retailers, shipping companies, hospitals, libraries, and others to gather and share information, but it is not without controversy.
Background
Prior to the mid-1970s, retailers and manufacturers who wanted to track their products relied on manual systems. Change began to occur in June 1974, when a ten-pack of Wrigley's Gum purchased in Ohio became the first product to be scanned with a bar code scanner in the first system that would go on to widespread use. Efforts had been underway for several decades to find a way to create a uniform method to streamline the process of choosing and/or paying for merchandise, but it was not until the 1970s that the right format and the technology to implement it were put together to create the first Universal Product Code (UPC).
UPC codes use a system of thick and thin lines that can be customized for each product. Once scanned, the scanning system interprets those lines and returns the price to the register while also updating the inventory for the product. This was very helpful to manufacturers and stores, but it did not provide any useful information to consumers.
The next innovation, the 2D bar code, was developed to hold more information. These codes, sometimes known as quick response, or QR, codes, capture information in two dimensions—both horizontally, like traditional bar codes, and vertically. As a result, they are able to hold exponentially more information. UPC codes capture twenty characters of data. QR codes can hold more than seven thousand characters. When used in conjunction with a smartphone, a QR code can direct a consumer to a web page or display additional data right on the phone.
Other forms of smart label technology include electronic article surveillance (EAS) codes, such as those used in libraries and stores to code merchandise. These codes can be deactivated at the checkout counter by special equipment. They can sound an alarm if items are removed from the premises without being deactivated. A radio frequency ID tag, or RFID, uses a microchip to code information about items and a small antenna to broadcast it so that it can be read from a short distance away. Some RFIDs can be read from as far as thirty yards away. This technology has a wide range of uses, from managing inventory to allowing people to pass through security checkpoints.
Overview
Smart labels are nearly impossible to avoid in the twenty-first century. They are present on food labels, concert and movie posters, and store displays. Some are carried daily in wallets or inside library books. The labels can provide much information to the company that places the labels on an item and, in many cases, to the consumer as well.
QR codes are the most visible of the smart technologies. The small squares of coding appear on a wide range of products and sometimes are even on store displays, on posters, or in newspapers and magazines. Some can be read by simply using the smartphone's camera; others require an app, which often can be downloaded for free. QR codes can direct the person "reading" them to a website with additional information. A food manufacturer may include additional nutrition information and information about the source of the food product. A concert or movie poster might include a bit of video, such as an excerpt of a song or a movie trailer. Codes on store displays or in magazines can play commercials right on smartphones, while codes in newspapers may connect the reader to a website with updated information on the story being read. All of these help companies share more information with consumers.
Other smart labels can be used to help track merchandise and packages as they move from one site to another. The code is scanned as the product or package reaches each stage of its journey, allowing the producer and, in cases of shipped packages, the customer to know where the package is as it travels. This technology is widely used by postal services and delivery companies such as UPS and FedEx to avoid loss and provide accountability during the shipping process.
New technology for these processes is being developed all the time. For instance, companies are working with new thin plastic film that can encode smart technology so that more types of items can be labeled. Technology is also available that can detect temperatures where the product is being transported, allowing manufacturers of perishable products such as milk and yogurt to ensure their products remain safe as they travel.
Additional forms, such as RFID, allow items "tagged" with the technology to be read from a distance. This technology allows swipe reading of credit and debit cards. US Homeland Security uses RFID technology at border crossings to "read" identity documents to help speed passage across borders. Retail stores and many other businesses use the technology to keep track of people and objects, and new uses are found regularly.
While smart labels provide a wealth of information for both companies and consumers, concerns about their usage do exist. Some worry that the ease with which labels such as RFID tags can be read makes it easy for thieves to steal personal information. Organizations concerned about the health and safety of food raise concerns that food companies will use the codes to get around posting information about their products that can be perceived as negative. For example, groups concerned about foods that contain genetically modified organisms (GMOs) worry that companies will get around requirements to label these products by putting the information in smart labels. However, Congress passed a law in 2016 to establish a national benchmark for how GMOs should be labeled to ensure that consumers understand what they were eating. These regulations were announced in 2018. On January 1, 2022, a new national labeling standard for food that has been genetically modified required use of the terms "bioengineered" and "derived from bioengineering" instead of GMO.
Despite the concerns of organizations and consumers, according to Precedence Research in 2024, the smart label market size had reached $14.10 billion and was projected to increase to more than $64.42 billion by 2034. Sustainable packaging was expected to be one of many growth opportunities.
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