Will DataBar Kill The Self-Checkout Produce, Coupon Nightmare?

Grocery chains have for years struggled with self-checkout systems that couldn't easily deal with produce, POS stations that simply couldn't handle complicated coupons and barcodes that didn't understand expiration dates.

But in a move that many in retail IT see as the potentially biggest change in product labeling since the rollout of the UPC barcode 35 years ago, DataBar is looking to sharply increase its retail presence as of January. Among the chains most vocally advocating for the advance are American chains Wal-mart, Winn-Dixie and Krogers plus Canada's Loblaw.

At its core, the DataBar codes are today's barcodes but are much more tightly packed with much more information. "The UPC barcode has served retailers well, saving them more than a trillion dollars in its lifetime, but technology moves along," said Jon Mellor, spokesman for GS1 US, the United States arm of the international standards body GS1.

Another GS1 official, senior director of industry development Stephen Arens, argued that some promotions today cannot be completely encoded in the UPC found on coupons. That forces cashiers to look at a customer's order to validate whether the promotional products are included in the items purchased. They then have to key-in the discount amount.

The DataBar will theoretically eliminate all that and "really increase the opportunity for the cashier to just scan the coupon," Arens said.

Consumers will also find it much easier, he said, to use self-checkout lanes for buying fruits and vegetables once the items are labeled with DataBar stickers and the kiosks are adjusted to read them. Instead of having to use a touchscreen to input a PLU number (that they often must look-up first), buyers will be able to scan produce just like they do with most other products.

DataBars attached to produce tell retailers not only the price and type of product but can also include the name of the vendor (Dole, Del-Monte, Chiquita, etc.), recommended freshness expiration data and other useful information. "Produce retailers will be able to get brand-specific information rather than commodity-level data," Arens said. Mellor added that the DataBar approach will allow for easier labeling of more perishable products costing more than $100, while the current UPC variable weight system can only go to $99.99.

But not all of this transition will be akin to scanning sugar and spice. Most chains will have to absorb non-trivial costs to support the upgrades, a tricky move at a time of store closings and massive layoffs. Most product scanners built since 2000 are capable of reading DataBars but investments need to be made beyond just the scanners.

To get the advantages from the new codes, all kinds of middleware will also likely have to be upgraded. "It may be that it's not in a company's near-term budget or plans to upgrade its scanners, but doing so is just a matter of going through the process of having either the scanner suppliers, field engineers or retailers' front-end staff and engineers activate the capability and make sure the software is ready to accept and process the data," Arens said. Retailers are "'getting product-specific sales information for detergents, pasta, refrigerated meats, dairy products," Arens said. "All that information is flowing to buyers, space management systems and other places and it's all driven by UPC data. Many of those same decision-support systems will be able to be used by the produce department now."One of the attractions of the new codes is that they seem to be addressing true pain-points for retailers today, especially in the self-checkout and expiration date areas. Some retailers have been talking up the imminent changes. (Editor's Note: Some of those anonymous comments are from execs working for very large chains. We're linking to those comments for a reason.)

In theory, a lot of the benefits promised—but not yet delivered--by DataBar could also be delivered by item-level RFID chips, which also promised a lot and has been very slow in delivering and only for those rare trials where a retailer is pursuing item-level. Although we're hesitant to compare two not-yet-delivered technologies (In the land of Vaporware, the more imminent rollout is King), DataBar seems to be much closer to delivering and it's approach seems to have side-stepped many of the cost and technology hiccups that have been holding back item-level mass acceptance. But Arens argued that DataBar might help advance both, with DataBar seen by some retailers as an inexpensive "transitional step" toward item-level RFID labeling. "The software and applications they put in place for the GS1 DataBar have the same data structures," he said. "Some retailers believe this is a good transitional move."

DataBar also should be able to help with marketing objectives, such as keeping track of which brands are selling better. Mellor said the GS1 DataBar can be used in the deli/fresh meat/seafood/poultry departments for many of the same reasons as produce because it provides "enhanced product description information, such as Brand A vs. Brand B vs. Brand C." Retailers can also encode into the DataBar labels a "sell by" date on store-packaged food that would be "caught at the front end if there were some out of date packages in the meat case."

"The uses of additional data available with the DataBar are especially relevant for in store-packaged fresh products," said Dan Grady of C-Core Retail Consulting. "Companies are considering what data elements might enable closing the loop on traceability, updating the POS with date-of-package sold, for true production planning, carbon footprint and other item information that may enable improved fresh execution and reporting." Grady noted that those in-store use discussions "will require scale companies to support the DataBar for in-store products and vendor/retailer collaboration."

After 2010, the next "sunrise" date for DataBar adoption is Jan. 1, 2014. That's when GS1 US recommends all other categories of retailers "consider preparing point-of-sale hardware and software systems to scan and process" the new labels. It said many appear to be going forward already. "Examples of industries expressing interest in implementation of GS1 DataBar prior to 2014 are healthcare, magazine publishers, cosmetics, jewelry, and categories of fresh foods, such as meat, poultry, and fish," said a GS1 US statement.