The barcode has been a mainstay of the retail industry for more than 50 years. However, with its inherent data limitation, the barcode will be replaced by 2D QR codes by 2027. In a multiple-part series, Retail Mashup explores the history of barcodes and QR codes and the opportunities and challenges brands face in preparing for this evolution. Will QR codes deliver better retail experiences?
The History Of Barcode
Consumers and retailers have intertwined with barcodes for more than half a century. Do you know how this relationship was formed?
Norman Joseph Woodland and Bernard Silver were credited for inventing the barcode through a patent application in 1952. It was designed as an extension to the Morse code with thin and thick bars showcasing letters and numbers. One big difference between the invention and today’s application of bar code is in its design. Instead of the rectangular design we know today, Woodland and Silver used a circular design to enclose the barcode.
QR Codes Deliver Better Experience by 2027 – Traditional UPC Barcode
The first use case of the barcode was documented in December 1962 when the UK magazine Modern Railways noted that British Railways successfully used a barcode-reading system to read rolling stock information while traveling at up to 100 mph/ 160km/h with complete accuracy.
Barcodes In Retail
Could you guess which retail sector started using barcodes first? You would be right if you guessed supermarket chains. Barcodes were adopted by the Uniform Grocery Product Code Council in 1973 for products. Instead of the circular form factor, the council chose an updated design from George Laurer featuring vertical bars. This was done to ease printing and label creation.
This adoption led to wider use of data management and productivity gains. Tasks associated with the barcode are generally referred to as having Automatic Identification and Data Capture (AIDC) capabilities.
The barcode is celebrating 50 years in 2023.
Sainsbury’s based in the United Kingdom was given credit for the first successful implementation of the barcode system in 1972. The first North American implementation followed shortly after with Marsh Supermarket using a scanner to scan the Universal Product Code (UPC) barcode from a pack of Wrigley’s chewing gum in June 1974.
The barcode can store up to 100 characters of numbers and letters. Owing to the low cost of implementation, ease of use, and improved inventory management, barcodes have been the de facto standard for inventory identification and sales recognition at physical locations worldwide.
What Are QR Codes
While barcodes are extremely useful and will continue to play a big role in the retail industry for a few more years. Its 100-character limitation has become a significant barrier for retailers imparting a digital transformation. While technologies like radio-frequency identification (RFID) found a niche in the retail world, no other has taken over the leadership role of product identification until GS1 determined QR code will carry the torch by 2027.
Why QR code?
Quick Response (QR) Code is a two-dimensional barcode that was invented in 1994 by the Japanese company Denso Wave. Its initial use was to label automotive parts. It features a machine-readable optical image that can store four standardized forms of encoding modes (numeric, alphanumeric, byte/binary, and kanji). It also expands data storage from the barcode’s 100 characters limit up to 7,089 characters for numbers only.
The maximum number of characters a QR code can store
In practice, QR codes are used to store data for identifiers or trackers that point to a website or an application. Its popularity was boosted during the pandemic as a mechanism to reduce physical touchpoints (e.g., handling a physical menu at a restaurant). Instead of using a scanning device, users can activate the QR code by scanning it using a smartphone’s camera unit. Additionally, one feature many may not be aware of is that QR codes will work even if up to 30% of the code is missing.
QR Codes Deliver Better Experience by 2027 – Broken QR Code Example
Static vs Dynamic QR Codes
QR codes can come in two forms, static or dynamic.
Both formats are useful depending on the purchase of the code. The first option is recommended for items that require little to no tracking (i.e., access to a menu through a URL). The latter option is ideal for inventory tracking, usage analysis, and marketing management.
The two most widely recognized next-generation barcodes are QR codes powered by GS1 and GS1 DataMatrix codes. They are used to store Global Trade Item Number (GTIN) information that includes product serial numbers, pricing, lot numbers, and beyond.
Given its higher capacity, the QR code can be used more innovatively. Here are some examples:
1. Grocery: expiration date, recipes, nutritional values, allergens, waste management
2. Food/beverage: menu, sustainable practice information, food origin, nutritional values
3. Retail: inventory management, authenticity verification, real-time analytics, discount/coupon management, traffic analysis
4. Travel: enhanced experiences through boarding passes or loyalty cards, time-controlled access to spaces or amenities, agent access, one journey concept
5. Work: enhanced QR code business card, controlled access to spaces or amenities, authentication, help desk access
6. Medical: enhanced patient record access, enhanced access to medical professionals, medicine management, record keeping management
In the future parts of this series, Retail Mashup will discuss how to create a QR code, how brands can convert existing barcodes into the new format, why should customer experience be reimagined during this system conversion process, and maximizing business analytic potential.
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