Product IDs like UPCs play a critical role in modern-day eCommerce and retail. They provide product identification that is key to tracking and managing inventory across sales channels. GS1 US and the GTIN (Global Trade Identification Number) have revolutionized commerce and product identification, over the past 50 years.
Looking towards the future, consumers expect increasing amounts of relevant information about the products they are purchasing and more complex supply chains demand more flexible product identification solutions. The next generation of Product IDs, the “2D Barcode” has the capacity to hold substantially more information than the traditional “1D Barcode”.
GS1 US has announced a goal of transitioning the industry from 1D Barcodes to 2D Barcodes by the year 2027. GS1 recently released an article that includes comments from Walmart and P&G, that details how the retail industry will be updating product packaging by 2027 with new 2D barcodes that carry more data – not only providing consumers with unlimited product details (sustainability, ethical sourcing, ingredients, etc.), but also retail players with greater supply chain visibility. In order to prepare retailers for this transition, GS1 US has released a “Barcode Capabilities Test Kit” to help businesses understand what the transition will look like for their business.
Learn more about the Barcode Capabilities Test Kit Pilot
Goat Consulting had the opportunity to interview Carrie Wilkie, Senior Vice President, Standards and Technology, GS1 US about the newly released test kit and the industry transition from 1D to 2D Barcodes.
Interview with Carrie Wilkie, Senior Vice President, Standards and Technology, GS1 US
Eric: How do retailers access the new "Barcode Capabilities Test Kit"?
Carrie: To assess readiness for Sunrise 2027 and the industry transition to 2D data carriers (barcodes), retailers can visit www.gs1us.org/sunrise2027 to download their GS1 US Barcode Capabilities Test Kit. The Test Kit provides a tool to allow retailers to evaluate their ability to scan and process 2D barcodes at the point of sale while supporting stocking and receiving functions in warehouses and distribution centers. Brand owners and solution providers can also use the Kit to develop requirements for the transition. Instructions are included in the Test Kit. Please email Sunrise2027@gs1us.org if GS1 can assist with any questions. Other resources to aid the industry include a GS1 US Advanced-Data Carriers at Point-of-Sale Getting Started Guide as well as implementation support for GS1 Digital Link – the standard that web enables barcodes by connecting the physical product to the web while providing consumers with instantly updated and brand-authorized content online via a single smartphone scan.
Eric: What are the main differences in needed readiness for "brick and mortar" vs. "e-commerce" 2D barcode usage?
Carrie: For brick-and-mortar, retailers need to be ready to handle point-of-sale scanning. With that, the first step is assessing their own readiness to accommodate and scan this more sophisticated data carrier on pack. GS1 US conducted a pilot program with three national retailers along with their associated solution providers to gauge readiness. Stemming from the study results, POS systems need to process 2D barcodes, interpret new data and maintain efficient checkout. Even though retailers in the test group had installed image scanners, testing shined the spotlight on various readiness issues in successfully scanning, processing, and storing data. Ultimately, hardware and software infrastructure across all POS formats must evolve in order to scan, read and ingest the data.
Eric: For Amazon.com sellers operating through Seller Central, inventory is managed and fulfilled through "Fulfillment by Amazon" or "Merchant Fulfillment". In "Fulfillment by Amazon" the Seller ships inventory into Amazon fulfillment centers and Amazon receives stores, picks, and ships orders. In "Merchant Fulfillment" the seller stores and picks their own inventory and ships the orders themselves. Have you heard of "Fulfillment by Amazon" receiving or storage accuracy improvements as a result of 2D barcode use?
Carrie: We are very much aware of the FBA function within Amazon, but the company has not been using GS1 barcodes for FBA – they use proprietary internal barcodes (FNSKUs) for that function. We continue to engage Amazon and help them understand the benefits of 2D barcodes, with GS1 identifiers embedded.
Eric: What are some of the improvements to inventory management that 2D barcodes provide?
Carrie: Inventory management can see serious improvements with the implementation of 2D barcodes. Since this sophisticated data carrier can deliver limitless information, businesses will recognize the ability to analyze the data for many uses cases including the maintenance of ‘first in, first out,’ discounting, confirming expiration dates, and having visibility of batch/lot number so recalled products are not sold.
Eric: Due to the variety of different parties that often offer a product on Amazon.com, displayed product information is often contributed from a variety of sources. This can result in inconsistent or inaccurate core product information (volume, dimensions, brand name, compatibility info etc.). If a manufacturer or brand owner could directly attribute this core product information to the 2D barcodes, it could help manufacturers and brand owners correct and enforce more accurate information about their products in the Amazon.com marketplace. Can you provide feedback on whether or not this core product information could potentially be directly attributed to a 2D barcode for reference by Amazon.com and end customers?
Carrie: At the core, 2D barcodes leveraging GS1 Standards enable enhanced data sharing and supply chain visibility. All product information and attributes can be encoded in 2D barcodes. Anyone can access the product data via 2D, but it all depends on what kind of data brands and manufacturers have made available via machine/phone scan. The 2D barcode has limitless information sharing capabilities that can be updated in real-time, which can potentially include more data such as batch/lot and serial numbers. Brands can also share dynamic product information with trading partners through GS1 US Data Hub. When a Global Trade Item Number (GTIN) is secured through GS1 US, brands can identify, create, manage, use, and verify data through one convenient, data-sharable platform.
Key Take-Aways
Use the newly released “Barcode Capabilities Test Kit” to check what a transition from 1D Barcodes to 2D Barcodes would look like for your business
2D Barcodes offer substantial improvements to inventory management capabilities. Some of these improvements include the maintenance of ‘first in, first out,’ discounting, confirming expiration dates, and having visibility of batch/lot number so recalled products are not sold.
If you are interested in learning more about GS1 US’s efforts in improving inventory management and identification you can visit their website.
Goat Consulting works with our clients to fully utilize the benefits of GTIN usage. If you’d like to learn more about how your business can benefit from GTIN product identification click the “Contact Us” button below.