Major Delays Feared For UPC Successor DataBar

As retailers this month celebrate (or at least give a yawning acknowledgement of) the 35th anniversary of the Universal Product Code (UPC), there are increasing signs that merchants aren't quite ready for its proposed replacement, the GS1 DataBar.

GS1 US, the United States arm of the international standards body GS1, has been pushing Jan. 1 as the voluntary adoption (aka "sunrise") date for the more muscular DataBar. DataBars on produce reveal not only the price and type but can also identify the brand, provide expiration data and other important information. Produce bearing DataBar labels can be scanned at self-service kiosks and when the new barcodes are printed on coupons, they eliminate the need for cashiers to validate whether the promotional products are included in the items purchased.

GS1 US has urged certain retailers, primarily supermarkets selling fresh produce and accepting coupons, to have their POS and backend systems ready to handle DataBar by New Year's Day. The likelihood of that happening, however, appears to be slim, something made apparent to those who attended April's Association of Coupon Professionals (ACP) Conference in San Antonio. They heard about substantial retailer indifference to the GS1 US's efforts, through surveys designed to determine DataBar adoption readiness. Many at the sessions said GS1 US will be likely have to move the sunrise date down the road.

The economy is just one factor in the delay, but it's a key one. With extensive store closings, retail layoffs and dramatic budget cuts, Top Ten priority lists have become Top Three priority lists. Those tighter priorities have to be completed with fewer IT people, which means anything that won't likely yield an immediate margin boost isn't likely to make the initial cut.

This certainly doesn't mean that DataBar is in jeopardy, but that it will, like a thousand other technology advancements that preceded it, have to wait quite a few more months for rollout than it had hoped for.

Although there was no formal announcement from GS1 US at the ACP conference, Ahold Information Services Vice President of Applications Development Alan Williams gave a presentation where he said a January replacement of the current UPC-A barcode with the DataBar "would create a significant hardship for a large number of retailers." Ahold, a Netherlands-based grocery chain operator with sales of $40 billion, has about 1,400 stores in the U.S. including Stop&Shop and Giant.

Williams talked about the GS1 US survey that found 65 percent of retailers said they wouldn't be ready by Jan. 1 to process coupons bearing the DataBar.

Nevertheless, as of early June, GS1 US was taking a very different view, arguing most U.S. retailers were on-board. The organization didn't seem to be backing away from the Jan. 1 adoption schedule. "The U.S. is still moving forward" with the New Years Day recommendation, said GS1 US spokeswoman Varsha Anand. "Retailers in other countries have asked for a little bit more time, but the retailers here feel they can meet it."

Andrew Verb, president of Bar Code Graphics, a company that specializes in bar code artwork, was one of the ACP conference attendees who left the event believing the Jan. 1 sunrise was in jeopardy. "They read a statement indicating that the survey from retailers was indicating it is very unrealistic that a mass populous of grocery store retailers will be ready by the Jan. 1 sunrise date," Verb said. "They indicated GS1 would be announcing something shortly."

Given that the Jan. 1 is merely a target, there's no specific need for GS1 to officially change anything. It will be a goal for all and those that make it will make it. Those that deploy six months later will, well, deploy six months later.

Verb said some of the biggest grocery chains, including Wal-Mart, Winn-Dixie, Krogers and Canada’s Loblaw, are ready for DataBar. However, many smaller chains have yet to install and test the technology needed to process the new labels, he noted.

Although most modern POS scanners are capable of reading DataBar, obtaining, installing and testing the software needed to process and take advantage of the extra information is proving to be a bigger challenge for many retailers than was originally pitched.

"I've heard a lot of different stories," Verb said. "It's not a simple software patch. This barcode carries a lot more data than is typically passed through the systems."

But there are those who doubt GS1 US will buckle under pressure to relax the sunrise date. One of the folks in that camp is John Baily, executive director of Top 10 Produce, a California company that helps small farms attain DataBar labels for their produce.

"They're not going to move that date" said Baily, who said he is "obsessed" with the improvements made possible with the DataBar. "That sunrise date is that sunrise date. Whether retailers are up to speed or not is another story."

Baily said adoption of the new labels would help the agriculture industry comply with the proposed Food Safety Enhancement Act of 2009 which, in part, calls for better food source traceability. "President Obama is making this (loose produce traceability) an agenda item," Baily said. "There is no way this (sunrise) is going to get pushed back. The only way you can label loose produce is with the DataBar."

Additionally, Baily argued that grocery retailers who procrastinate when it comes to DataBar adoption will be placing themselves at a competitive disadvantage. "In order to compete, they're going to have to jump on the bandwagon," he said. "There are way too many benefits to the retailer that does have the GS1 DataBar scanners if the labels are on the produce. There are benefits for category management, shrink-reduction, self-checkout efficiencies, auto-reordering and they can see which products are selling faster. So if their competition is benefiting and they are not, eventually they're going to have to do it. The question is whether they will jump on-board from Day One."

To a large extent, retailer adherence to the Jan. 1 recommended adoption date will be driven by the actions of suppliers. Many coupons now have both the venerable 35-year-old UPC and its newfangled replacement. When those long-in-the-tooth UPCs disappear, cashiers at stores that are not DataBar-ready will be forced to enter coupon information manually. And when those extra minutes start eating into the number of transactions each cashier can process in an hour, someone in corporate is likely to start taking notice.