WINNING CUSTOMER LOYALTY through digitally empowered packaging

Larry Logan Chief Marketing Officer Digimarc Corporation

AGENDA

1.  Challenging Times

2.  The Consumer Demand for Content

3.  Challenges to Providing Consumer Content

4.  Types of Package Triggers

5.  Our Approach at Digimarc

6.  Types of Content

7.  The Package as Brand Narrator

8.  Q&A  

Topics

20 YEARS OF INNOVATION AT DIGIMARC®

1100 Patents Issued and pending

20 Years of Operation

Well capitalized public company with strong operating history

EXPERTISE Print Technologies and processes

APPLICATIONS Industry Standards

in security for currency, government issued IDs, and movies; additional applications in audience measurement for TV and radio, print-to-mobile publishing, copyright protections, and shopper’s journey enablement.

18 Years in Security Continuous service to global consortium of Central Banks

LATEST DEVELOPMENT Digimarc® Discover and Barcode focused on retailers, brands, and modern mobile-centric shoppers.

CHALLENGING TIMES

CONSUMER BEHAVIOR IS CHANGING

of GenY (18-29) use a smartphone WHILE SHOPPING IN-STORE

Sources: Google Shopper Marketing Agency Council; Deloitte “Navigating the Digital Divide 2015” Thrive Analytics and Local Search Association, “Local Mobile Trends Survey,” April 2014

are willing to SCAN PRODUCTS

CONSUMERS WANT MOBILE ENGAGEMENT

73% 97%

Sources: Google Shopper Marketing Agency Council; Deloitte “Navigating the Digital Divide 2015” Thrive Analytics and Local Search Association, “Local Mobile Trends Survey,” April 2014

less YOY for $ comparison

MORE FOR INSPIRATION AND IDEAS

MORE $ SPEND

CONSUMERS WANT MOBILE ENGAGEMENT

30% 25%

Digimarc – Harris Survey October 2016

of U.S. adults say reading a product package in store helps them make a

PURCHASE DECISION

85%

CONSUMERS WANT MOBILE ENGAGEMENT

of U.S. adults have wanted than appears on a product package.

MORE INFORMATION

CONSUMERS WANT MOBILE ENGAGEMENT

78%

Digimarc – Harris Survey October 2016

are more likely to research and when they do not get the info they need.

PURCHASE ONLINE

75%

CONSUMERS WANT MOBILE ENGAGEMENT

Digimarc – Harris Survey October 2016

PACKAGING REAL ESTATE IS BECOMING EXHAUSTED

“ ”

…packagers must still create a label that includes all necessary information, but on a much smaller space.

“Personal care packaging gets personal,” Packaging Strategies Magazine, January 12, 2016

CONSUMERS DEMAND SMALLER PACKAGES

1

2

3

4

5

6

OPERATIONAL EFFICIENCIES

WHAT ARE THE ENGAGEMENT TRIGGERS?

UPC & QR CODES

Looks like this Performs like this

DIGIMARC BARCODE / GS1 US DWCODE

BENEFITS TO THE RETAILER

SCAN AT ANY ANGLE •  Faster checkout •  Easier self check-out •  Scans even with damaged

or hard-to-read UPC codes

BRAND ENGAGEMENT •  Health programs •  How-to videos •  SmartLabel™ content •  Coupons/promotions

BENEFITS TO THE CONSUMER

1

2

3

4

5

6

SIX BARCODES OR 200?

DYNAMIC UPDATING

SERIALIZED CODES

Customer

Location

Refill Date

Special Offers

0001 0002

Benefits  to  the  brand  

Manufacturing  •  Efficiencies  in  on-­‐line  produc6on  •  Reduced  inventory  shrinkage  •  Improved  quality  control  •  Tracking  of  design  revision  control  •  Lot  and  manufacturing  date  codes  

for  food  safety  

Warehouse  •  Efficiencies  in  order  fulfillment  •  Enhanced  inventory  control  •  Traceability  of  returns  &  

reclama6ons  •  Speed  of  pick  &  pack  

Retail    Distribu5on  Center  •  Speed  of  order  fulfillment  •  Enhanced  inventory  control  •  Traceability  of  returns  &  

reclama6ons  •  Speed  of  pick  &  pack  

Retail  Store  •  In  store  consumer  engagement  •  Evalua6on  of  planogram  compliance  •  Faster  and  more  efficient  retail  

servicing    

•  Restocking  &  direct  store  distribu6on    opportuni6es  

•  Improved  loss  preven6on-­‐barcode  swapping  

•  BeFer  checkout  experience  both  aFended  and  self  check  out  

•  Delivery  of  couponing    &  loyalty  programs  

•  Reduced  inventory  shrinkage  

Point  of  Sale  •  Improved  consumer  informa6on  •  Access  to  SmartLabel™  •  Digitally  enabled  POS  signage  •  Evalua6on  of  OSA  (On  Shelf  Availability)  

Home  •  Access  to  product    availability  •  Increased  product  informa6on  •  Immediate  placement  of  product  reviews  •  Immediate  access  to  online  product  reviews  •  Product  lifestyle  and  usage  informa6on  

BENEFITS TO THE BRAND

TYPES OF COMMUNICATIONS

Product recommendations Use guidance Brand story Edu-tainment Social networks Re-ordering Product transparency •  Smart Label •  Nutrition Facts Label •  GMO Labeling

COMPLIANCE

SHAZAM

DAGSCHOTEL

GMO – Safe and Accurate Food Labeling Act

Food Nutrition Label Deadline July 26, 2018

PRODUCT TRANSPARENCY

SmartLabel™

Conceptual — for demonstration purposes only

SmartLabel™

Conceptual — for demonstration purposes only

Conceptual — for demonstration purposes only

LOCATION-­‐SPECIFIC    AUDIO  RECOGNITION  

Conceptual — for demonstration purposes only

BUY  NOW  PRODUCT  INFO  

REVIEWS  RECIPES  

RECOMMENDATIONS  TRIVIA  

SHOPPING  LISTS  PRODUCT  LOCATOR  HOW  TO  VIDEOS  

COUPONS  SWEEPSTAKES  

SHARE  MOBILE  CHECKOUT  SCAVENGER  HUNT  

BUY  NOW  PRODUCT  INFO  

REVIEWS  RECIPES  

RECOMMENDATIONS  TRIVIA  

SHOPPING  LISTS  PRODUCT  LOCATOR  HOW  TO  VIDEOS  

COUPONS  CONTESTS  SHARE  

MOBILE  CHECKOUT  SCAVENGER  HUNT  

Would be willing to pay MORE FOR A PRODUCT that offers complete transparency in all attributes.

Would be LOYAL FOR LIFE if it provided complete transparency

Would SWITCH TO A NEW BRAND if it offered full product transparency

TRANSPARENCY = MORE MARKET SHARE

39% 56% 73%

2016 Label Insights Transparency ROI Study

FUTURE PROOF YOUR PACKAGING

YOUR PACKAGE AS BRAND NARRATOR

Challenging Times

The Consumer Demand for Content

Challenges to Providing Consumer Content

Types of Package Triggers

Our Approach at Digimarc

Types of Content

The Package as Brand Narrator

Q&A  

Topic

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The Barcode of Everything™

©2016 Digimarc Corporation

 

Larry Logan Chief Marketing Officer

Digimarc Corporation

larry.logan@digimarc.com