Consumer demand for information about products they use and consume has reached an all-time high—whether trying to address a health issue, a social issue, or simply to be in control of what they put into their bodies. Today’s consumers want to be more informed. According to the U.S. Grocery Shopper Trends 2017 report, clear labeling, food safety standards, and product guarantees are top reasons shoppers tend to choose a particular store. Information today is accessible at the touch of a finger and the blink of an eye. All the consumer has to do now is decide whether the information is reliable, or not. For food retailers, transparency invokes and idea of trust in a culture of consumer skepticism.
The idea for SmartLabel® started as the Consumer Information Transparency Initiative (CITI) and was sponsored in 2014 by the Trading Partner Alliance (TPA), a collaborative industry body of stakeholders represented by the Board of Directors for FMI and Grocery Manufacturers Association. One FMI/GMA member, The Hershey Company, working to address transparency for their products, felt this would be better served as an industry-wide initiative and raised the idea for a vote, which passed, and began the SmartLabel initiative.
The SmartLabel kick-off meeting organized over 90 companies and 320 stakeholders into four key working groups including two focused on product attributes, one focused on food products, and the other on non-food and pet products. Groups were charged with building the consumer interface, and identifying technologically how best to operationalize and bring to market. Since then, additional working groups have formed to look at creating a bi-lingual English/Spanish function to the app and improving the consumer experience.
The audience for SmartLabel will reach beyond the original consumer audience. Government regulators, academia, and business partners will be able to conduct research about products used, and consumed, in addition to non-governmental organizations (NGO’s). Ultimately, SmartLabel helps food retailers and manufacturers meet the consumer demand for more food product information and is a mechanism for developing consumer trust in food products and brands.
With any industry initiative of this size, resources and industry support are key factors for successful execution. A number of companies have positioned themselves to be strong partners in operationalizing SmartLabel. Depending on a brand owner’s needs, there are companies that can fully execute the program on your behalf with little more than a physical package and validation protocol. However, you may want the al a cart menu, especially if you have your product attribute information already organized in a Product Information Management (PIM) system. In this case your needs may be focused on QR code generation, landing page design, or the application program interface (API) that will deliver the information from point “A” to point “B.”
To organize competencies of each service provider and help brand owners target areas of need, the vendor taxonomy was created, bucketing solution providers by area(s) of competency.
Download the Vendor Taxonomy
View the consumer website for SmartLabel at www.SmartLabel.org.
Use the links to the left to learn more about the SmartLabel implementation process.
This is an important discussion with leadership. Experience has shown there are instances where leadership is committed early, but sees SmartLabel more as an I.T. project; therefore, the project has an “end game” expectation. The SmartLabel platform will require multi-year commitment and oversight.
Functional areas to consider on your team include: I.T., Branding, Marketing, Regulatory, Packaging, Product Development, Quality Assurance, Finance, and Project Management, which may be your in-house broker.
Implementing SmartLabel has a number of hard and soft costs that the brand owner will need to consider. The hard costs include software and technology costs, packaging design and pre-press, QR code and fees from third-party service providers including landing page licensing fees.
Some annual fees you’ll want to consider include landing page licensing fee to SmartLabel, landing page maintenance fees, and third-party data-hub providers.
Don’t forget some of the hidden internal soft costs, labor for internal review and audit of pages and attributes, cost to educate employees and store personnel, and consumer concerns support as awareness grows.
This will vary depending on the strategy you have as a brand owner. Areas manufacturing partners may be able to help with include providing financial assistance, data collection, development, and attribute validation/proofing.
Product attribute collection is a critical step in operationalizing SmartLabel. In many instances the taskforce found that the data required for SmartLabel was located in a number of different databases, but not typically centralized in a usable format. Working with your trading partners to collect each of the product attributes (based on GDSN definitions) should be the first project the team works to complete. Data collected will also be important for e-commerce platforms, FSMA requirements, and helpful in the event of a product recall.
As you start the process of product attribute data collection, you’ll want to have a centralized data pool to store the data. This is also known as a Product Information Management system (PIM) or Master Data Management System (MDM). The systems can be wholly owned or licensed through a third-party provider as referenced on the vendor taxonomy. In some instances, the third party will also assist in coordinating the collection of the product attribute data.
If you are a Global Data Synchronisation Network (GDSN) subscriber, much of the work has already been done. As a standards body, GS1 and the GDSN are integral parts of the SmartLabel initiative. GS1 had or created each of the attribute definitions that are being used to populate SmartLabel product landing pages.
If you are not a GS1/GDSN subscriber you should at a minimum be aware and using the GS1 US attribute definitions to build your product attribute database and landing pages.
Accurate information is going to be critical to gain and maintain consumer trust. Depending on the path you use to populate SmartLabel landing pages, your partners will expect different levels of data review. Although SmartLabel is meant to communicate information beyond what is available on a package, brand owners still must own and ensure the digital information equals (=) the physical information on a package. Understanding the role each party plays from the SmartLabel service provider, to the manufacturer trading partner, to your own internal staff should be considered and communicated early when reviewing the different paths forward.
You may have a technical specification for each of the products that assist you in business related activities like Electronic Data Interchange, register scanning, etc. SmartLabel is a consumer-facing tool and in some cases could require you to modify the typical business to business nomenclature, shortened descriptions or acronym to meet that need.
View the consumer website for SmartLabel at www.SmartLabel.org.
As a new user of SmartLabel you will be required to license a “landing page” for each product you plan to share digitally. A landing page is what the consumer “lands” on when scanning a QR code or searching the SmartLabel website. Mapping the attributes you want to share, an API pulls the information from the PIM and populates these landing pages into web pages. You can also call this a product information page.
To license pages, simply reach out to email@example.com with your interest. You will be contacted by an associate in the SmartLabel office to help you complete the process. The costs associated vary and is based on membership status with FMI or the Grocery Manufacturing Association (GMA).
Understanding the current resource load your team can pick up should be assessed and will inform if you proceed internally or with an external partner in the building and hosting of product landing pages.
SmartLabel landing pages are licensed by page, not by brand. Your implementation strategy should consider how and which departments, categories, and brands you want to touch first. Until the USDA completes the regulations governing biotech labeling, SmartLabel implementation has flexibility to meet the brand owner’s consumer engagement strategy. The best starting points is to consider the brands/SKUs that bring you the largest gain in being transparent with customers.
Additionally, you don’t have to automatically change packaging to participate in SmartLabel. Another method would be to develop the landing pages and make available through your brand website and SmartLabel. As you update packaging normally, you can add the QR code and SmartLabel logo.
An Application Program Interface (API) allows software programs to speak to each other. SmartLabel is simply a style guide and set of governances to provide a consistent user experience and technology plays a significant role in bringing this platform to life. The product information you have collected and plan to share will require an API to communication the product attributes in your database, or PIM, to the SmartLabel landing page to create a uniform experience that allows consumers to easily get the information they want.
Currently there are two on-pack scanning technologies being used to provide access to SmartLabel landing pages, a Quick Response (QR) code is the preferred method, but some brands are also using a Universal Product Code (UPC) bar code.
QR codes have been identified as the primary scan technology for SmartLabel to deliver consumers to a landing page. QR code usage is a highly popular method in China and Asia. Within the U.S. QR code usage is growing, according to Nielsen, QR code usage has jumped to 56 percent between 2013 and 2016 with 25 million scans. According to U.S. Grocery Shopper Trends 2017, over half of shoppers report they are at least “somewhat likely” to scan a QR code or other type of label. Although with the acceleration of new technologies like “digital watermarking,” QR codes will eventually be one of a number of options. As with the evolution of technology, so do the criminals that use it to scam consumers. When talking to QR providers, ask if they offer indemnification against fraud.
For the brand owners utilizing the UPC bar code, the motivation is primarily to allow shoppers to engage more quickly, while addressing design and pre-press in a normal course of business with other updates. However, the QR code allows the inclusion of the SmartLabel logo and direction to “scan here for more information,” offering consumers directions and association with SmartLabel.
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