The Next Retail Media Channel Might Be Sitting on the Shelf

As retailers strengthen their hold over shopper data, multi-location brands are searching for new sources of customer intelligence. The next major first-party data channel may not be digital advertising or loyalty programs, but the package already sitting in a customer’s hand.

There was a point in time when it looked like ecommerce would swallow up retail whole. But it hasn’t quite worked out like that; online sales growth has slowed to a steady single-digit pace across most mature markets after the heady heights of the pandemic years.

Ecommerce now accounts for around 16.6% of all US retail sales, according to the latest Census Bureau figures, which means roughly one in six retail dollars is spent online, with physical stores still taking the rest. For multi-location brands, this should be good news. But in practice, the uncomfortable truth is that brands are digitally blind on the physical shelf.

Retailers collect rich shopper data through their loyalty schemes, but those insights stay with the retailer. Brands selling through third-party stores rarely see who bought their product, and largely depend on someone else’s closed-loop program for a relationship that should belong to them. The first-party data that fuels modern marketing, the kind that drives personalization and co-branding opportunities, is just out of their reach.

There is a channel that brands control completely, yet many still treat it as passive cardboard: packaging.

The package is a media channel brands already own

Every product a brand sells is a physical touchpoint already in the customer’s hand. A connected package, (built around a QR code or NFC tag), turns that touchpoint into a two-way communication channel. A shopper scans, and the brand can deliver a product story or a localised offer. It could even be a gateway to an AI-powered assistant that answers questions about ingredients and provenance. Layering this technology onto the package also allows brands to capture location-based engagement data directly, without waiting for a retailer to share it.

As the technology matures, this becomes more important. The fifth annual Connected Packaging Survey, which gathered responses from 712 executives across sectors including retail, FMCG, and hospitality, found that 81.2% of respondents had already used connected packaging, up from 72.6% a year earlier. Industry confidence in its growing importance reached 92.3%, showing clearly that connected packaging has moved well beyond the experimental phase and is fast becoming standard practice.

What brands really want from this channel is data. Data collection ranked as the leading reason for using connected packaging in the survey, cited by 60.9% of respondents, ahead of factors such as compliance, sustainability, and loyalty. Brands are mining this data for the same reason they once invested in ecommerce analytics – they want to understand the customer at the point of purchase.

Disintermediation runs in reverse

Furthermore, this type of technology built into packaging gives brands the chance to bypass retailer disintermediation. When a shopper scans a package in a store aisle, or at home, the brand learns things it couldn’t have known previously, such as when and where the product was scanned, and what the customer chose to do next. These insights flow into the brand’s own CRM and data platform rather than disappearing into a retailer’s loyalty database.

Engagement on an interactive, tech-enabled package tends to run far higher than on interruptive digital media, because the shopper has already made the active choice to scan. They have the product in their hands, and interaction rates comfortably outperform the low single-digit response brands have come to expect from social and display advertising.

One package, many localized stories

Another advantage of this technology is that the destination the scan leads to can be changed. This flexibility makes the channel valuable for brands operating across many locations and regions.

For a national brand running a seasonal promotion, rather than reprinting packaging for a Halloween push and doing it again for a winter campaign, the digital experience behind the existing code can be updated. A shopper in one region can see a local stockist offer while one elsewhere sees content relevant to their market. The same package serves different stories based on where and when it is scanned.

Brands have grown used to buying audience access on retailer apps and in-store screens, but too often they have overlooked the product itself. It reaches every buyer, involves no media wastage because every scan comes from someone holding the product, and offers the reporting and dynamic content possibilities brands expect from digital advertising. The next evolution of retail media will not live only on screens and app menus, but on the package at the point of sale too.

The compliance tailwind

Brands considering updating their packaging with this storytelling, interactive technology should also be aware of fast-approaching deadlines. The GS1 Sunrise 2027 initiative, led by GS1 US, calls for every retail point-of-sale system to read 2D barcodes such as QR codes by the end of 2027. Walmart, Dillard’s, Kroger, and Target are already preparing, and brands that delay risk friction at retailers that are moving swiftly in this area.

For any product sold through US stores, a scannable digital identity will be a condition of doing business. The survey found compliance cited by 60.7% of respondents as a reason for adoption, nearly level with data collection. A brand can think of this mandate simply as a cost, or alternatively as an investment in a foundation for a data and engagement channel.

Start treating packaging as infrastructure

The brands making headway no longer think in one-off campaigns, but treat the package the way they treat their website, as a permanent channel that can update with the changing seasons and sales promotions. The data reflects this commitment, with 83.3% of respondents planning a connected packaging campaign this year, and 34.5% having created dedicated roles to manage the channel.

Physical retail is becoming measurable in a digital sense. For multi-location brands that don’t want to rely on retailers for their customer relationships, the most powerful data channel is sitting on the shelf, waiting to be switched on.