Labels to get smart
WHAT if your face cream had a mind of its own?
You have a few late nights, and you skip your evening routine. Come back, your face cream texts you.
You haven’t used me in three days. Now that you think about it, your skin’s been feeling a little dry.
You get back on track, and the amount of cream in the jar begins to dwindle.
But before it disappears completely, you get another phone notification. Check your doorstep. A new package has arrived.
Your face cream just reordered itself.
This is the future Pittsburgh startup Adrich in the United States dreams of.
The company creates smart labels for consumer products that collect data about the items’ usage and allows them to automatically reorder – something those in the industry call “smart replenishment” – as well as to send data to both consumers and companies.
That future isn’t as far off as it may sound.
The company began in 2016 as a spinout of Carnegie Mellon, and has picked up steam in the past couple of years.
The startup secured seed funding from Sony Innovation in 2019. Since then, the smart labels that were once hypothetical went live to market (though in a limited fashion – they’re currently just in Europe, where consumers who opt in are getting automatic olive oil deliveries to their doorsteps).
More recently, Adrich partnered with Amazon, where it is in talks to embed smart-replenishment options into the largest ecommerce platform in the US. And the team hints that 2023 is going to be full of “big things”.
But along with the increased recognition could come increased scrutiny.
Plenty of consumers are reluctant to have corporate eyes inside their homes, and data privacy experts have long warned about the risks of trading our privacy for added convenience.
The future of consumerism
The folks at Adrich say they’re developing “the next step in shopping”.
“Humanity, you know, we used to go hunting, and then we went to the store, and now you just go on Amazon, and the next step is less and less effort,” said Vance Wood, marketing and operations manager.
“Now, it’s just the stuff I need that will always be in my house where it should be.”
Adrich’s Nisha Burke embraces the idea of her skincare routine texting her.
“What would it be like, if suddenly I were getting all these compliments about how I appear?” said Burke, its chief marketing officer.
“And me, I’m thinking, is it the facial cream? Or is it the reminder I get when I haven’t been using it for a couple of days?”
Smart labels are just one part of the broader Internet of Things (IOT), the term for everyday objects that connect to the Internet – think your Alexa, or your Apple Watch, or your Ring front-door camera.
Pittsburgh is home to the first IOT device in history.
In the 1980s, a group of graduate students and a research engineer at Carnegie Mellon made a Coke machine connected to the Internet.
The information it posted online? Its soda-can inventory, updated in real time. (The machine still lives on Carnegie Mellon’s campus.)
Now, IOT is making our homes “smart”, as we increasingly buy objects that are able to communicate with us, and each other, entirely online. And the trend will only continue:
Seattle-based e-commerce giant Amazon recently paid Us$1.7bil (Rm7.6bil) to purchase Roomba and connect it into its smart-home grid, which means that, soon, you’ll be able to say, “Hey Alexa, my bedroom needs to be vacuumed.”
IOT makes a lot of everyday life feel as natural as breathing. You can turn on speakers in another room using your phone, or ask your car to give you directions to the closest gas station.
About 15.1 billion IOT devices will be connected by 2023, according to Statista, and most of those are consumer devices – in 2020, around 60% of IOT devices were in the consumer segment.
But cybersecurity experts say the growing number of Internetconnected devices creates thorny privacy concerns, especially when they enter somewhere as intimate as our homes.
Or, in the case of toiletries like face creams, the most intimate space of all: our bathrooms.
Take a smart-labelled shampoo, for example – something Adrich has tested.
“You’re literally naked in the bathtub and some big tech company, and big soap company, is watching you,” said Michael Madison, a law professor at the University of Pittsburgh. “That’s literally what’s happening.”
Terms and conditions
“All of this is done with the consent of the consumer,” said Adhithi Aji, the company’s founder and president.
“That’s something we are very particular about.”
Would-be smart replenishment customers are asked for consent before they purchase, and those who opt-in need to download an app to set it up.
Adrich says this ensures that only people really interested in the service go through the steps to do it.
“And then it’s autonomous,” said Aji. “It’s like you set up any other (smart device) or Google Home or Alexa. It’s just that onetime setup.”
Prof Madison, who teaches contract law and tech law, has seen “an enormous number” of his former students go to work for clients to draft Terms and Conditions, the legal lifeblood of data collection.
“That’s the way most modern ecommerce works. It’s all documented in the fine print.
“Everybody knows that nobody reads the fine print. The companies that sell you the fine print, they are relying on the fact that you are not reading the fine print,” he said.
But this is nothing new.
IOT may make it easier for companies to track our data, but companies have found ways to track without it, too.
For decades, consumers have willingly handed over discount cards at stores like CVS and Walgreens.
Membership cards give access to deals and discounts, but they also allow companies to glean information about consumer spending habits.
And most of those companies, Prof Madison points out, are “perfectly happy to sell that information”.
In the grand scheme of things, IOT companies like Adrich are just “closing the last half mile”.
Though there’s convenience in it for customers, it’s brands that stand to get the most out of smart labelling.
Outside of smart replenishment, Adrich has helped companies like Clorox conduct studies on consumer behaviour using their labels.
The results have proven more accurate than self-reported surveys, which companies have previously used to track consumer data.
These companies could also potentially prompt customers via the app to use their products more often – something that could prompt more frequent reordering.
And the smart-replenishment function means that consumers stay loyal to whatever brand they chose in the first place.
One thing, however, is certain: IOT has come a long way since the Coke machine at CMU.
Smart labels are the latest Internet of things technology that promises to take tedious tasks like restocking off our hands.