Demand for data may signal twilight for barcodes

The tried and true barcode may be approaching its twilight. Because of the increasing demand for information about products, the 41-year-old technology is due for an evolutionary replacement.

Since its 1974 debut on a pack of Wrigley's Juicy Fruit gum at a Marsh supermarket in Troy, Ohio, the Universal Product Code has been a touchpoint of many technological advances for retail and other industries. It streamlined logistics, greatly increased the speed and accuracy of the checkout process, became a key identifier in inventory management, and lately a means by which customers could look up information about products on their mobile devices and in-store kiosks.

             Photo courtesy of GS1 US

"The barcode did a great job, but it is now time for succession," said Kees Jacobs, Capgemini consultant for consumer products and retail. "The current barcode is not sufficient to be the carrier of much more granular information that is needed."But now with both shopper and retailer demand for product information growing at a rapid pace, the old barcode is no longer up to the job, Reuters reported. While there are significant costs to retailers and manufacturers to change packaging and point of sale systems, it will also bring the benefit of more and better data to help them manage supply chains and store inventories.

For example, upon scanning, a barcode with an eight to 14 digit number can identify a product and its most essential information, such as size or weight. But that number does not convey other information of interest to the retailer, such as a batch number or sell-by date, or to the customer, such as ingredients, allergens or country of origin.

But GS1 US has a somewhat different view. "UPC barcodes continue to serve a critical business purpose at point-of-sale, and will continue to do so for the foreseeable future," Bob Carpenter, president and CEO of GS1 US, told FierceRetailIT.

"GS1 US and the industry are collaborating to make accurate and up-to-date product information more accessible to the consumer, utilizing existing supply chain infrastructure based on GS1 Standards like the Global Data Synchronization Network. The barcode is evolving to be leveraged and extended for additional uses, such as product traceability and fulfilling consumer's needs for more product information, and additional GS1 data carriers are being evaluated to meet those needs."

One potential replacement in the future is the GS1 DataBar, which is a double-layered barcode that can carry additional details such as the expiration date, quantity, and batch or lot number. DataBar is now being used to ensure the accurate redemption of coupons, having supplanted the old UPC Prefix 5 barcode.

The radio frequency identification tag is another candidate, but is still too costly for widespread use, especially in the grocery channel. But recently, RFID's use has greatly increased, and the prices are coming down.

The quick response (QR) code is also waiting in the wings. After a splashy debut several years ago, QR codes have fallen into disuse like the RFID tag did until its recent resurgence as an inventory management tool. The QR code can store many more data points than the bar codes, and can be scanned by smartphones to lead consumers to a Web page; however, it can't be read by the majority of store scanners.

Dutch retailer Albert Heijn recently debuted "Check Origin" QR labels on locally-grown radishes and blueberries. By scanning the code with a mobile device, the shopper can see a video to show the journey, in reverse order, from shelf to packing facility to farm.

When consumers become aware of such tools, they are likely to demand more transparency. A GS1 study found shoppers are most interested in nutritional and ingredient information, details on allergens, organic certification, environmental impact and ethical standards.

Beyond the new codes is the challenge of standardizing the data. Fiona Wheatley, sustainable development manager at the U.K.'s Marks and Spencer, said keeping tabs on all the company's suppliers can be a daunting task. "Your ability to give your customers more confidence that they can rely upon is proving to be increasingly challenging," she said. M&S relies on certification systems like Fair Trade to help audit small farmers.

GS1 is working on an agreement between retailers and suppliers to share data and improve logistics. "The will is there. It has to happen," said Malcolm Bowden, GS1's president of global solutions. "Like any major change, big companies have to have time to think through the implications."

These different systems will need to coexist for at least a decade as retailers and logistics companies upgrade their scanning systems, Bowden said. "I am convinced we will have a day where pretty much all information about all products will be available to all consumers," he said.

For more:
-See this Reuters article

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RFID enables retailers to control inventory of complex categories
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