GS1 US celebrated the 50th anniversary of the GTIN on March 31st, 2021. Since 1971, the GTIN has revolutionized commerce. GTIN stands for Global Trade Item Number and is the product identification number encoded into the ubiquitous UPC barcode. It has become one of the most important supply chain standards in history and a critical tool in the modern-day retail toolbelt.
Looking towards the future, the industry has prioritized moving from one-dimensional UPC barcodes to new 2D barcodes by 2027 (examples shown below). 2D Barcodes are capable of holding far more information than traditional UPC barcodes. The additional information carried by the new barcode can be used for improvements to supply chain management and additional product information communication with the end customer.
Goat Consulting Interview with GS1 US
Goat Consulting had the opportunity to interview Senior Vice President Carrie Wilkie about the anniversary and what the future holds for GS1 US and next-generation 2D barcodes.
Eric: Was there any event or trend back in ‘71 or previous to ‘71 that first drove that meeting of those executives when they decided that they wanted to create the GTIN system?
Carrie: It really started out of retail grocery. If we think about supermarkets and the impetus to get people together was really around the time that consumers were waiting in line at the checkout in the supermarket. At the time, the cashier was hand-keying all of the price data based on a sticker into a system, and so it was just really time-consuming and inefficient. And consumers were not happy about the amount of time that they were spending in the checkout line. There was also a fair amount of, I'd say, discontent over disputes on pricing. So if something was entered incorrectly as a price, the process to get it corrected was pretty intensive, again, manual. And no one wants to argue with the consumer. So if the consumer says that's the wrong price, a lot of times it got corrected to whatever the consumer said it should be. There was just really a recognition that there had to be a better way, a more efficient way to do this, but it wasn't going to work if it was just one supermarket or one retailer that was making that change.
Eric: What are the main takeaways, learnings in your mind that GS1's gained in the last 50 years of business?
Carrie: I think the biggest takeaway is that industry collaboration is really still relevant. At the time that all of these executives got together 50 years ago, they were thinking this would kind of be a one-and-done. They would assign some identifiers, and they'd be done. The thinking was that this wasn't going to be a long-term effort.
50 years later, obviously, we're still here. We've gone global. We've evolved as GS1, and I think that's really where the big realization is that industry collaboration for supply chain efficiency continues to be relevant. More industries, more sectors, more products, more types of identification beyond the GTIN and to things like locations really still requires the industry driver and the industries coming together, taking off their competitive hats and working together.
Eric: Looking at the goal of rolling out 2D barcodes in the industry by 2027, are there any hurdles or challenges that you anticipate, and how does this rollout compare to the rollout of GTINs between '71 and '73?
Carrie: Back in the 70s when they were rolling out GTINs and the linear barcodes, there were a lot of challenges in getting the lasers to work at the right angle and to reflect the light correctly. Some of the history, if you're familiar with it, the initial design was a bullseye. And part of the issue with the bullseye is that it wasn't easy to print, and it wasn't easy to scan. So if we think about how groceries go down a conveyor belt as we all shop today, you're scanning from every single angle. So getting both the shape and design and then the laser angle to work together to say, "I can scan this at any angle that is coming down the conveyor belt. I don't have to stop and orient it" was really the challenge in the 70s.
I think the challenge today is less about how we scan. Everybody's moving to camera-based optical systems. We're not looking at laser-based systems primarily anymore, and the cameras just get better and better. The bigger challenge today is connecting the backend systems. So many of us now use our phones, use the little computer that's in our pocket to shop, and a lot of retailers are actually moving to that as well through tablet-based systems and things like that. So the scanning bit is the easy bit now. It's connecting the backend system to actually know what to do with so much more information and data that can be encoded in that carrier.
Eric: Do you have any tips for brands looking to go through this transition from GTINs to 2D Barcodes? Can an existing assigned GTIN be reformatted into a 2D barcode or does a new product ID need to be assigned for the transition?
Carrie: It's absolutely just a new format for your existing GTIN. There's no need to get an additional identifier or identify that item differently. It sounds like you're familiar with the 2027 project. There's going to be some period between now and 2027 where we're going to be what we call dual marking. So you're going to see products that have that UPC barcode that we're all familiar with today and a 2D barcode as the retailers move at different rates on adopting. So the symbols will have the same GTIN. They'll have that same number encoded. That 2D symbol is capable of putting a whole lot more data in than the linear barcode that just has the GTIN in it, but they'll have absolutely the same identification.
My advice would be to brand owners, find a retailer to start doing some pilots with who's ready to do that. And also, talk to your branding and marketing teams because there's going to be, I think, some real input from those groups on how you do this dual marking and where you put the new 2D identifier. We often hear from marketing people, they don't want to put those lines and spaces and bars on their labels. So I think there's going to be some real input from the marketing teams on how we do this in an elegant way.
Eric: Aside from the transition to 2D barcodes, are there any changes or trends that you foresee for GS1 kind of moving forward in the future? What types of additional information do you think will be encoded in the new 2D barcodes?
Carrie: I would say there are probably two aspects on the horizon for the future, the first, exactly to your point, all of the information that we can put in a 2D barcode. So it serves or can serve so many different use cases and purposes, and traceability and transparency are absolutely part of the use case that can be unlocked with 2D.
I think the other part that is really applicable in the marketplace is data quality. So as we look at the attributes that are assigned to these GTINs, getting that data quality right, so that we have consistent reliable information and we can start to combat things like duplication of GTINs so where we've got products that maybe don't need a new GTIN, but they've been assigned one because there’s some confusion, or we've got products that are maybe borrowing a GTIN from another product. Just having better controls on the data quality and data accuracy that the marketplaces can rely on when they're looking at listings.
Key Take-Aways
Focus on improving customer purchase experience and supply chain efficiency is what drives GS1 US
The formation of the GTIN in ‘71 was driven by retailer’s need to standardize pricing and supply chain management. Improving the customer’s speed and ease of purchase also played a key role. These are the same needs that are driving the transition from GTINs UPCs to 2D barcodes.
Challenges that businesses face managing and using product ID’s have evolved with changes in technology
Scanning capacities of UPCs was one of the main hurdles that GS1 US had to work through when the GTIN was initially launched in ‘71. Today advances in technology have greatly reduced the hurdle of scanning capability. The main challenge faced today is connecting scanned information to backend systems and across different device types (phone, tablet, pc etc.)
2 Dimensional Bar Codes are the future of product identification
Two Dimensional barcodes substantially increase the amount and variety of information that can be used both for internal supply chain purposes and supply customers with additional product information. The transition from UPCs to 2D Barcodes can be done incrementally. The 2D Barcode is simply a different format of the existing UPC. The product’s GTIN, the actual number identifying the product, does not need to be assigned again. A UPC and the 2D Barcode can be used at the same time on product packaging.
Improving data integrity and customer purchase priority looking toward the future
Improving marketplace data quality/usage and taking full advantage of the data storage capabilities of the 2D barcode are both trends and priorities when considering the future of GS1 and the retail industry as a whole.
To learn more about the management of GTINs and the implementation of 2D barcodes contact Goat Consulting using the link below