Smart Labels: Advanced Electronic Identification Slips
The global smart labels market is predicted to grow at a compound annual growth rate CAGR of 10.03% to attain a market size of US$10.472 billion by the end of the analysis period, 2026. The market was valued at US$5.501 billion in 2019. Smart Labels are advanced electronic identification slips that extend the functionality of packaging or the labels beyond traditional details printing. These labels have embedded chips that provide live tracking services and information regarding the product. Smart labels are different from barcodes and have radio frequency identification capability.
The key driver of growth in the market is the rising tech-savvy population who demands speedier and convenient delivery. Further, strict government regulation for discloser of product information for greater consumer awareness will support the market growth. However, the high cost of installation of these smart labels has the capability to hinder the market growth during the study period.
Difference Between Smart Labels and Barcode
Smart labels and barcodes are quite different and have different features. Barcode labels are physically scanned through a specific scanning device to obtain the product information such as size, color, price, and others, on the system the scanner is connected with. Smart labels, on the other hand, are a technologically advanced method over the traditional barcode. Smart labels are integrated microchips that are glued between two thin layers of paper. All the relevant data is stored in this microchip and data can be transmitted to the user by electronic waves. These microchips have radio frequency identification capability which enables the user to track and obtain the product information on any suitable device using websites/ tracking ids and passwords.
These radiofrequency waves can easily penetrate through materials. Hence, these labels need not be applied outside the package to transmit information. Further, the microchips can carry vast information about the product, reducing the need to print unrequired and extra information on the packaging. Further, in some cases, detection of this RFID equipped microchip provides 20 times faster information than barcodes. The riding of these chips is possible even if the chip is dirty. Contactless identification is also possible in the case of smart labels.
Stringent Government Regulation Will Significantly Boost the Market Growth
One of the key drivers of the smart labels market is stringent government and consumer courts rules and regulations for providing details and status about the product for better consumer awareness. These rules state providing clear and necessary information regarding the product on the package so that a consumer is not unaware of the details. In November 2000, the Indian Ministry of Commerce mandated the printing of information such as MRP, manufacturing and expiry dates, ingredients, and others. However, details such as origin, content, ingredients, manufacturer, and others take good enough space of the packaging, leaving little area for brand promotion and naming. Further, on a small packaging, printing this information may become congested which may result in unreadable text. Hence, smart labels are adopted by companies to accommodate vast information without losing areas for brand name and promotion.
Increasing Digitalization and a Tech-Savvy Population Encourages Market Size Growth
The other prime reason that supports the growth of the smart labels market is increasing digitalization and technological advancement leading to the adoption of advanced solutions for a better consumer experience. Companies are adopting smart labels to provide detailed information about their product and enable live tracking of the product during transportation. It helps in faster and convenient delivery to the customer and decreases the chances of loss of the package during transportation or theft during the procedure. Further, the emerging tech-savvy population prefers modern tracking and technology systems to keep an update about their purchase. Further, surging internet penetration along with rising online channels of trade has increased online purchases from unknown suppliers at several locations. Smart labels facilitate building trust between supplier and customer by providing details and a tracking system for a better experience. Hence, e-commerce giants such as Walmart and Amazon have adopted smart labels to manage and track their supply chain and logistics.
Radio Frequency Identification Labels (RFID) Will Have a Major Share in the Smart Labels Market
The smart labels market is segmented on the ground of technology as electronic Article surveillance (EAS), RFIS, Sensing labels, NFC, and electronic shelf labels (ESL). The RFID technology-based smart labels are anticipated to show robust market growth due to their superior advantages over others. The RFID technology does not require visual contact to read or write the data content. Further, several RFID labels can be recorded simultaneously and hence have mass production and recording advantage. In addition to the contactless identification feature, the position of the object that is to be recorded is less troublesome as it is sufficient for the object to be within the reading distance of the registration unit. And the reading is possible even if the tag is dirty. Also, no battery is required for the RFID technology to function. The EAS and ESL technologies will grow at a significant rate during the study period 2019 to 2026.
Transport and Logistics Will Dominate the Market for Smart Labels During the Study Period
The smart labels market, based on the end-users industry, is segmented into healthcare, FMCG, transport and logistics, retails, and others. the transport and logistics segment of the market is anticipated to dominate the market demand for smart labels owing to their live tracking feature for greater consumer satisfaction. This live tracking system enables tracking of the package if delivered incorrectly or location in case of loss. Further, these labels discourage robbery as they can not be easily separated from the packaging. The FMCG and retails sector will grow notably as these sectors are required to provide detailed information about their products. Further, smart labels facilitate better supply chain and logistic management.
Geographical and COVID Insights
The smart labels market is divided into regions based on contents as the North American region, the Asia Pacific region, the European region, the South American region, and the Middle East and African region. The North American smart labels market will dominate the global industry owing to the early adoption of technologically advanced products. however, with rising internet penetration and a growing technologically knowledgeable population, the Asia Pacific smart labels market will surge in the fastest region. The analysis report also covers the detailed impact of the coronavirus pandemic on the smart labels industry.
