Nearly every product in every store in every transaction involves GS1 standards in some respect. Most commonly, it is the Universal Product Code, generally referred to as the barcode, which was first used at retail more than 40 years ago.
With other codes now in place that also scan at the point-of-sale, FierceRetailIT asked GS1 US president and CEO Bob Carpenter about the future of product identification.
GS1 is an international, not-for-profit organization that develops and maintains supply and demand chain standards. It was established as the Uniform Code Council in 1974, following industry agreement on the UPC symbol. That same year, the first optical scanning of a product with a barcode was in a Troy, Ohio, Marsh supermarket. In 1977, the European Article Numbering Association was established and in 1990, UCC and EAN signed a cooperative agreement. The organization was renamed GS1 in 2005. GS1 US is one of 111 member organizations of GS1 globally.
Starting from the premise of a recent media report which considered the demise of barcodes, Carpenter discussed a number of new technologies and why he thinks barcodes will continue play a key role in the retail industry.
FierceRetailIT: Are barcodes on the way out?
Carpenter: Barcodes serve a critical business purpose and will continue to do so for the foreseeable future. While there are dozens of different barcodes that support varying business purposes, the most common barcode is the Universal Product Code, which is essential at the point of sale. A UPC barcode contains a Global Trade Item Number, which is the number series that appears under the barcode symbol. When used properly, it uniquely identifies a product when it is scanned at various points in the supply chain. It's important to note that there is an entire system of GS1 standards that are recognized globally, of which the UPC barcode is just one symbology or data carrier.
Different barcode symbologies have different data carrying capabilities. Some symbologies are better suited to offer a variety of product information to optimize supply chain visibility and efficiencies, as well as provide consumers with the information they need to make purchase decisions. Barcodes have never been more relevant as a means to provide the information that is key to product traceability, including product identity, location in the supply chain, ingredients, and many other product attributes like weight and color. Ultimately, it is up to each industry sector to adopt the standards that best address their business process.
FierceRetailIT: Will the barcode evolve? How so?
Carpenter: The barcode is evolving to be leveraged and extended for additional uses globally, such as product traceability and fulfilling consumer's needs for more product information. Whether or not the traditional UPC barcode or another data carrier is the best way to capture data depends on an industry's need, but the standards that facilitate unique product identification will remain the same.
For example, in the apparel and general merchandise industry, Electronic Product Code-enabled radio frequency identification tags are being applied at the item level to provide the real-time inventory visibility needed to fulfill omnichannel retailing strategies. The tags are an example of a data carrier that is not a barcode, but still fully leverages GS1 standards to make the product visible in the supply chain. A company's EPC-enabled RFID IT integration is made simpler by the fact that it uses the same product identifier as the UPC-barcode, and as a company's point of sale, inventory and transactional systems. With consumers now accustomed to "always open, always on" shopping options, retailers and brands that implement RFID are at a clear advantage in being able to leverage a more "capable" data carrier to relay information to trading partners and consumers quickly.
FierceRetailIT: What types of codes will be used in the future and how will they be read? What do you think of new technologies like the invisible barcode?
Carpenter: In the decades since the first UPC barcode scan in 1974, various barcodes and data carriers have emerged out of industry needs. We anticipate that the use of the following barcodes will sustain or grow well into future:
The GS1 DataBar identifies small and hard-to-mark products such as loose produce, jewelry and cosmetics. They can carry serial numbers, lot numbers and expiration dates to support product authentication and traceability; product quality and effectiveness; and couponing.
The GS1 DataMatrix is a two-dimensional barcode that holds large amounts of data in a relatively small space. These barcodes are used primarily in aerospace and in health care supply chain. This is used to encode a variety of information, such as date or lot number, and is readable in a 360-degree orientation. These barcodes also have a sophisticated error correction algorithm, which compensates for lost or missing data, extraneous marks or code damage.
The GS1 QR Code symbol is a two-dimensional barcode that has gained wide acceptance in such diverse industries as manufacturing, warehousing and logistics, retailing, and transportation, and will continue to play a significant marketing role for mobile applications.
Case level barcodes, such as the ITF-14 and GS1-128 barcodes, identify units such as cartons, cases and pallets, helping manage fast and accurate tracking of inventory.
Invisible barcodes, or digital watermarking, use a proprietary watermark that can be scanned very quickly at point-of-sale checkout, or read by a camera on any mobile phone. These digital watermarks are invisible to the human eye, yet can be read very quickly at checkout or via mobile phone. As with any data carrier, the same GS1 standards that provide product identification throughout the supply chain can support this technology. We anticipate that digital watermarks can unlock a higher degree of interaction between the product and the consumer, given the mobile scanning benefits.
|Image courtesy of GS1 US|
FierceRetailIT: What impact is mobile, and the increasing demand for data, having on barcodes?
Carpenter: As consumers, we've moved from simply buying what was available at the store to the desire for greater validation of product ingredients, allergens and other information about products prior to purchase. Having a computer in your pocket makes it a whole lot easier to feed your curiosity about products from any location.
This disruption represents a major opportunity for supply chain partners to enhance their data quality and respond to consumer demand for more transparency—mainly because consumers are already scanning barcodes with their smartphones and finding there are data inconsistencies. GS1 US and the global retail 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. For instance, the Global Data Synchronization Network enables trading partners to globally exchange standardized product information in an automatic and efficient way.
FierceRetailIT: Summing up, what is your perspective on the future of product identification?
Carpenter: Globally, unique product identification has been the foundation for business process efficiencies for more than 40 years and it continues to represent a major opportunity for companies large and small—regardless of industry—to generate supply chain visibility, efficiency, safety and collaboration. How that product information is delivered may evolve as technology forces more disruption and the industry shifts in the future.
GS1 US also continues to partner with all retail industry stakeholders to integrate their brick-and-mortar operations with e-commerce businesses and online marketplaces, ultimately improving future online experiences for consumers. There are now more than two dozen major retailers and companies using GS1 standards in their websites to identify products and improve search.
The increased usage of GS1 standards in the digital world has been instrumental to ensuring that consumers not only find the right products, but that those products appear in the right searches and surface accurate information. If the foundational elements for product identification and attributes are properly captured and shared, transitioning to new technologies and taking advantage of business growth opportunities will certainly be easier.
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