Imagine a world where every item in a store lacked a label, making it difficult to track inventory or ring up purchases efficiently. That's where the humble UPC barcode comes in! Developed initially by a former IBM engineer George Laurer a, UPCs allow retailers and online marketplaces to effortlessly identify, track, and manage their stock across all channels. The standardized codes act like a product's unique fingerprint and have revolutionized the way we shop with every scan since their debut in 1974.
The first UPC scan happened in 1974 at a Marsh Supermarket in Ohio, marking a turning point for retail automation. Today, barcodes are scanned over 10 billion times a day, identifying more than a billion products! They are truly the cornerstone of modern commerce, silently working behind the scenes to ensure a smooth shopping experience for everyone.
On June 26th GS1 US celebrated its 50-Year Barcode ‘Scanniversary’. Goat Consulting had the opportunity to interview Amber Walls, Senior Director, GS1 US about the past 50 years of barcode history and where the Universal Product Code is headed in the future.
Interview with Amber Walls, Senior Director, Global Standards GS1 US
Eric: What can you tell me about barcode history? How was the UPC born?
Amber: The first scan of the UPC was in Troy, Ohio. The initial scan in 1974 was the culmination of the perfect storm of necessity and recent technology-advancing innovations needed for its function. Keep in mind in the early 1900s, you didn't have the first self-service store where you could just go pick up your groceries until 1916 when Piggly Wiggly had that as their innovation. A lot of the technologies in play just weren't there, but you began to see things developed. Joe Woodland, who was the one of the fathers of the barcode for UPC, was looking at new creative technologies to meet a need for a complex problem. This ranged from the tech used in television introduced in 1949 at the World's Fair to phosphorescent paints. In retail, nobody wants to stand in line at the checkout, there were many keying errors and price issues. Wages and paying retail employees also became an issue. This boiled down to a need for automation that could support all stakeholders in the environment. Work on a solution came together through a collaboration between many companies and sectors who eventually agreed “this is the barcode we are going to go with”
Lots of other barcodes were tried for the first retail scan. RCA had a bulls-eye format barcode that was also developed and had an 18-month test run at Kroger. It just didn’t print as well as other options and wasn’t as scalable. There were many different formats tested and not all made it to the finish line for testing. Some designs leveraged very specific types of fonts. Others tried to use different colors and Dot/Grid Patterns. All sorts of things were getting thrown out there as potential formats. But parallel dark/light lines and spaces won out in the end for a number of reasons.
Considered UPC formats during initial design and testing
Eric: How has the barcode revolutionized retail and eCommerce?
Amber: Before we get into that let's take a step back. All barcodes do is carry information. Without value-add information that means something, a barcode is just a cool pattern. What was innovative in retail that enabled the benefits we see throughout the supply chain, is having unique identification and having actual, usable data. GS1 has GS1 Company Prefixes and UPC or GTIN Numbers that represent that product anywhere it might be. The barcode holds that in a form that can be scanned and interacted with automatically. So the revolution is getting the right information to the right place without human intervention being needed. Then you have the story right? You can pull data, you can reference things, and you can have images and reviews. Everything about that product now has a centralized place where you can begin to track and enable whatever use cases you want to bring to life.
Eric: Looking to the future, GS1 US is currently rolling out the 2D barcode in the Sunrise 2027 initiative and facilitating a transition from 1D barcodes to 2D barcodes used at retail point of sale. Where do you guys see this transition going and how will it change how retail and eCommerce use barcode technology in the future?
Amber: The 2D barcodes that we are seeing retail adopt (QR Code and Data Matrix) are hitting their 30th anniversary. The QR Code came out in the automotive industry in 1994 and has been transitioning right along with the business ever since. Much like in 1974, needed to automate and get away from manually typing things, it's the need to get more data to the right place, at the right time. You see QR Codes on menus or billboards or printed on shirts for a reason, right? You need to be able to give the consumer experience through linked information and if you need more data in the barcode itself, for the supply chain, retail, or eCommerce, those options are there. It's a game-changer. For example, it can provide an expiration date that can automatically be acted on. We're seeing dates in barcodes used to stopping the sale of expired products - which is a big win for safety. This is also enabling the ability to do dynamic price markdowns and get data on your inventory of how close things are shipping or selling to their expiration date. Batch lot number assignment supports finding products during a recall and countless other applications. You can put those points of information directly into the 2D barcode. We're also seeing a movement in some sectors of getting into serialization, where every individual instance of an object has unique product identification. Through serialization, you can get very granular information on traceability, returns, management, and authentication applications. It's about identifying your need and finding data that is suitable for your need – the technology can adapt.
Eric: Are there any new types or categories of information that can be tied to the barcode that GS1 US is particularly excited about?
Amber: Depending on what your product is and what information your customer is interested in, the thing that I am most excited that you have a choice. Your product journey, business priorities, or target customer can be used to determine what data you're integrating into the barcode. If using something like QR Code with GS1 Digital Link, those factors can also create custom online experiences for whomever scans it. There is a lot of flexibility, and it is not one size fits all but there is a few sizes that fit most, which helps the journey.
One interesting area is attribution for fresh and variable-measure foods. Weight, dimensions, price, and sourcing details are all consistent and it reduces supply chain issues. Batch/Lot information or serialization is not for every product, but what it can enable can bring immense value to businesses and consumers.
Eric: From an Amazon selling perspective, products are frequently distributed to the end customers by a variety of different parties. Brands and manufacturers often lack the needed visibility or information to track distributed units through the supply chain to the point of purchase on Amazon. Serialization provides the ability to get insight here to get a deeper understanding of how inventory is making its way into the hands of Amazon customers.
Amber: Yeah, absolutely
Eric: How can online sellers benefit from using the 2D barcode? I know we just kind of talked about the supply chain side of things, but I guess what are some other areas of benefit that you see?
Amber: Beyond the supply chain topics we already touched on, direct engagement with the consumer is at the forefront. The barcode provides information that is key to customer satisfaction and product use. It also encourages customer loyalty, brand awareness, and repeat purchases in the future. The digital information linked to from the barcode is especially impactful as the consumer has the physical product in their hand when they are viewing the information. It is reported that 77% of people believe it's important to have that digital information at the point of purchase.
We see different flavors based on who the target audience is and what their needs are. For example, you could be linking to influencers showing how to use the cosmetics product, linking to promotions to incentivize purchase or trial of another type or category of product. We also see that language translation of linked content is easier than having multiple languages of packaging printed. Also, allowing customers to read product information digitally in a bigger font in the case that they find printed packaging font too small to read. Other examples include nutrition safety information, assembly videos, product reviews, and more.
Eric: Are there things that you recommend brands or manufacturers do to increase consumer engagement and scanning or barcodes?
Amber: Scan rates currently are not always high. However, they might be linking to things like digital disclosures or nutrition where you only need to see it once you know you don't necessarily need to scan that package every time to meet your needs. But if you want folks to keep reengaging with it on packaging you might highlight “this takes you to a promotion” or a social media campaign. If that's what that type of audience is interested in serving, it's about making the experience match what they’re looking for.
We see a lot of companies that will change the experience (the 2D barcode-linked content) over time because you can change where it links to without changing the packaging. This offers great flexibility for targeting things relevant to the customer like seasonality (spring, summer, fall, winter, etc.) or limited-time events (like the Olympics for example).
GS1 US 50-Year Barcode “Scanniversary” - Frequently Asked Questions
When and where was the first barcode scanned?
On June 26 1974 a barcoded pack of Wrigley’s Juicy Fruit gum was scanned at Marsh’s Supermarket in Troy, Ohio.
What is the difference between a UPC and a GTIN
GTIN (Global Trade Item Number) is an umbrella term for a variety of product identification codes used globally. It can have 8, 12, 13, or 14 digits. Think of it as a broad category for product IDs. A UPC (Universal Product Code) is the 12-digit variety of the GTIN code.
What are the differences between a 1D and 2D Barcode
A: 1D and 2Darcodes are different in a few respects. In terms of dimension and shape a 1D barcode is composed of straight (one-dimensional) vertical lines in rectangular shape. The 2D barcode is composed of squares, dots, and other shapes (two-dimensional) in a grid. In terms of data capacity, a 1D barcode can typically under 100 characters with many in active use limited to 14 or less digits, whereas many 2D barcodes can over 2,000 characters. The scanning technology for 1D barcodes requires simple laser scanners that read the variation in vertical line widths. 2D barcodes use a 2D imager that captures the entire grid to decipher complex patterns (which allows for more data capacity).
What is the Sunrise 2027 GS1 Initiative?
Sunrise 2027 is an industry-set milestone to enable the ability to read and process 2D barcodes at retail point-of-sale by the year 2027. The initiative involves the transition of the use of 1D barcodes to 2D barcodes and the transition of scanning equipment at POS from laser scanners to 2D imager scanners.
What type of supply chain information can be tied to a 2D barcode?
2D barcodes allow for unit serialization which enables in-depth supply chain data to be attributed to each manufactured unit. This information includes but is not limited to batch or lot information, unit manufacture location, distribution partner assignment, product weight or dimension, date or time stamping of Supply Chain events, and more.
What type of merchandising information can be tied to a 2D barcode?
2D barcodes can be used to provide customers with useful digital information about the product on hand or they can be used to promote other products or services offered by the brand. Some examples of content that can be linked include but are not limited to nutrition information, assembly instruction or use videos, social media campaigns, promotional codes, or discounts to encourage the purchase of other products or seasonal content.
Conclusion
The barcode has served as the cornerstone of modern retail and eCommerce. Over the past 50 years, it has improved supply chain efficiencies, customer experience, and engagement with retail brands and products. Looking to the future, 2D-Barcodes with their increased data capacity will allow brands to tailor more custom supply chain management strategies. They also provide the opportunity for brands to tie together digital product enrichment with physical product experience to improve customer satisfaction and loyalty. Goat Consulting helps our clients clearly understand and take action to improve their product identification and validation on Amazon.com. If you have any questions about product identification or how to leverage 2D barcodes to improve supply chain visibility and customer satisfaction, click the button below to start a conversation.