Walmart (NYSE:WMT) is testing a new invisible barcode technology that could speed up the checkout process by 50 percent and help eliminate long lines.
The test of digital watermarking from Digimarc was revealed this week by Walmart CEO Doug McMillon in an Instagram post, The Oregonian reported. "Inside Walmart's Lab 415-C, our associates are working on some incredible innovations," he said in a caption of a photo depicting a bag of chips getting scanned. "Technologies like invisible watermarking could transform the way our customers check out."
The new digital technology can cut scanning time by as much as 50 percent, according to Digimarc.
For example, the technology allows scanners to immediately read from as many as 200 invisible barcodes all over a box of cereal, said Digimarc CEO Bruce Davis. This would replace conventional barcode technology with one code per package, often on the bottom. This takes time for the scanner to pick up and slows the checkout process, which costs retailers money.
"It's a big deal going fast," Davis said. "We're confident we can cause everyone to go a lot faster."
The Walmart test is still at the "proof of concept stage," he said, but "to have a little tiny company like ours be known to the CEO of Walmart is encouraging." Costco had previously tested digital watermarking two years ago in a publication sent to the warehouse club's members.
Eventually Digimarc's barcodes could eliminate lines at the checkout counter completely. According to Davis, shoppers might place items in a cart equipped with scanners that can easily find barcodes all over the packages.
"I think it's overwhelmingly improving scanning," Davis said. "It's not like a little change. We're way, way better than the existing scanning."
When word got out that Walmart is testing the Digimarc technology, the small company's stock increased nearly 14 percent, closing at $37.15 on Tuesday, a four-year high.
Referring to McMillon's Instagram post, Davis said, "That's a good thing when the big boss likes the stuff."
Early last year, the Portland Business Journal reported that Digimarc had teamed with Datalogic, which makes barcode readers, for the project.
"Just as UPC changed the face of retail when it was introduced almost 50 years ago, Digimarc barcodes will have a similar impact," said Matt Schler, general manager of fixed retail scanning for Datalogic.
At the National Retail Federation's Annual Convention and Expo in 2014, Digimarc broke the Guinness World Record for the fastest time to scan 50 items, according to this YouTube video.
Get ready for old coupon barcode retirement
Walmart's holiday 'checkout promise' to open every register
Walmart drives growth in self-checkout
Kroger adds infrared cameras to keep checkout lanes moving
Target CEO Cornell places big bet on technology