Advances in technology are having a fundamental impact on the way we work and live our lives. AI is a prime example, its effects are reshaping industries, improving jobs (by eliminating mundane tasks) and arguably profoundly changing our attitudes to everyday tasks, making us more impatient and demanding instant answers and actions. Similarly, the emergence of IoT and more recently smart labels promises to have an important impact on the way we ship and move products and items across the supply chain and for everyday operations.
Up to until recently, once a sender despatches an item they ‘lose sight’ of its location, receiving only irregular status updates by transport and logistics intermediaries on the item’s whereabouts. But smart labels, which effectively transform any package into an IoT device, offer advanced security and seamless continual trackability, satisfying the growing need from organisations across sectors for constant visibility of their prized goods or products in transit.
Rising demand for smart labels
The global smart label market is growing rapidly. Data from Precedence Research projects the market will expand at a CAGR or 16.4% from $14.10bn in 2024 to $64.42bn by 2034. There are numerous factors behind the surge in demand for smart label technology.
What’s driving the rise in smart labels?
Firstly, geopolitical tensions, severe weather and supply chain blockages over the last 24 months have adversely impacted global supply chains, leaving them struggling to cope with unprecedented levels of complexity and disruption. Faced with new levels of unpredictability, organisations are looking to technologies that provide real-time visibility of the location of goods, enabling them to be more resilient and informed on the status of shipments.
Secondly, consumer shopping habits and behaviour have evolved significantly in recent years and this is an important contributing factor to the demand for tracking technology. Online commerce continues to show strong growth. Figures from Statista highlight the fact that global retail e-commerce sales reached an estimated 5.8 trillion U.S. dollars in 2023. The figures predict that it will grow by 39% over the coming years, reaching over eight trillion dollars by 2027. And as ecommerce grows, so too does the risk of parcel fraud and non-delivery fraud (where a buyer claims they didn’t receive an item they ordered, and then receives a refund without providing proof of delivery).
A recent survey carried out by Cifas found one in five people had or knew someone how had committed non-delivery fraud over the last twelve months. Smart labels, not only relay an accurate account of a parcel’s journey but also provide a ‘secret delivery note’; given the subtlety of the smart label design, most people would fail to recognise that the label contains a hidden tracker, since it appears to be a simple barcode or information sticker. As a result, potential fraudsters remain unaware that their actions are being monitored in real time, offering an additional layer of security.
No news is not good news
More positively, consumers are becoming accustomed to having greater transparency over their orders – both in terms of being assured that their parcel will arrive on time and in having full knowledge of who is providing them with the product. When it comes to parcel tracking, no news is anything but good news. Research by ParcelMonitor found that 90% of consumers check their parcel status at least once with many checking up to four times per order. Smart labels provide a continual update on the status of goods to the benefit of not only end user consumers but also every stakeholder involved in the supply chain.
What makes Smart Labels even more appealing is that they require no additional infrastructure or maintenance. The person applying the label activates it by peeling it off and attaching it to the parcel, and the label comes ready connected without the need to set up SIM connectivity.
Who stole all the pies?
The applications of smart labels stretch across vertical sectors and includes car fleet management, retail, parcel and postage and freight and logistics. One example use case is the tracking of perishable items in the supply chain including food and beverage. Remarkably, a recent analysis by BSI, a global leader in supply chain intelligence, found that food and beverage products account for over 20% of all (supply chain) thefts. The recent theft of a van carrying 2500 pies from a Michelin-star chef highlighted the huge cost of food theft. While law enforcement recovered the van, the pies, worth £25,000, perished. The restuarant could have avoided such a costly disruption by sending the pies using a smart label.
Going beyond food theft prevention
Smart labels however offer much more than merely a means of theft prevention. They are pivotal in enhancing food safety and improving logistics. With consumers demanding a greater level of transparency regarding the ingredients and sourcing of produce, these labels deliver accurate information and real-time alerts at every step of the supply chain – from collection from farms to processing and packaging, transport and ultimately to the end user’s kitchen.
The food supply chain is particularly complex since it involves so many players and intermediaries beyond merely the producer and retailer. Culpability for a substandard service could lie anywhere in this chain. However, organisations can only identify where responsibility falls by using a smart label to monitor what happens when and where. Together with tracking location, smart labels also monitor temperature. This is essential to giving importers visibility into the transport conditions of their goods. If the logistics company delivers goods late or unfit for consumption, a smart label provides vital evidence to support a dispute.
For exporters and food manufacturers, smart labels also offer insights on the number of goods in transit or on shopfloors providing clarity on the ecosystem and the availability of their products, enabling them to take steps to improve efficiencies in their logistics.
Modernising automotive manufacturing
Smart labels also have the potential to revolutionise the automotive industry, which has grappled with significant challenges in recent years. During the pandemic, the global semiconductor shortage had a staggering impact on vehicle production, with 7.7 million fewer vehicles produced than planned and leading to an estimated an estimate of a $210 billion dollars lost in projected revenue.
While the industry continues to recover, supply chain vulnerabilities, particularly concerning semiconductor availability, remain a critical issue. A typical vehicle contains 15,000 to 25,000 components, all of which must navigate a complex supply chain involving numerous suppliers and manufacturers. This intricate network is highly-susceptible to errors and disruptions, as even a single missing part at the wrong time can cause significant production delays. Alarmingly, up to 50% of unscheduled manufacturing downtime is attributed to a lack of spare parts or stock-outs. Any blind spot in the supply chain can create a cascading effect, resulting in inventory shortages and costly delays.
A new way to think about data
Smart labels offer an effective solution for ensuring continuous visibility across the supply chain. Critically, smart labels are revolutionising the way data is accessed and shared among the ecosystem; to date, data-driven organisations tend to keep information in silos within various departments and processes, limiting access and hindering collaboration among teams.
For example, logistics companies in the past might have relied on entirely separate datasets depending on their geographic locations, such as a U.S. branch operating independently from its European counterpart. The adoption of smart labels is radically changing this approach by enabling data to be collected, shared, and accessed through interconnected systems. This integration eliminates isolated information pools and fosters seamless communication.
As a result, businesses can identify delivery issues with a level of precision that has not been possible until now, enabling them to improve accountability and make well-informed decisions to boost efficiency. This is especially critical in industries like automotive manufacturing, where the on-time delivery of specific components is vital for success.
The road ahead
Like with all new technologies, there are still some considerations and challenges in smart labels that need to be addressed in order to unleash large-scale adoption.
Sustainability will be a major focus as smart labels become more widespread and their use cases expand. As demand for these technologies increases, ensuring reusability of smart labels will become a key consideration. Additionally, leveraging smart labels to generate valuable insights- such as tracking CO2 emissions from different transportation methods -could help businesses make more sustainable decisions and reduce their environmental impact.
Similarly, optimising battery life will be essential for the scalability of the technology. Emerging innovations, such as 5GLPW8 and other low-power solutions, will play a critical role in addressing this challenge. Additionally, Wi-Fi has proven to be a reliable connectivity solution and will remain a cornerstone for ensuring consistent and efficient data transmission in the future.
2025
Organisations across sectors are already acknowledging the need for continual tracking of items and goods.
Next year we envisage a notable surge in the adoption of smart labels as organisations across industries recognise that achieving real-time insights does not require extensive additional infrastructure. On the contrary, we believe that the instant access to critical data that smart labels provide will not only lead to increased usage of the labels but also a fundamental evolution in the way diverse industries operate.
- Collaboration & Optimization
- Digital Supply Chain