By Kaitlin Friedmann, Marketing Director, Small Business Growth, GS1 US
Entrepreneurs in the retail industry are likely aware of the increased demand from consumers to know more about the products they buy. Often, the package can’t hold all the information they seek, such as product origin stories, certificates to back up sustainability claims, and more. Throughout the product life cycle, there may also be information that needs to be communicated to the end customer, such as recalls, updates, and disposal recommendations.
The retail industry is on the verge of a major change in packaging to respond to this increased demand for more information. Brands and retailers are beginning to transition UPC barcodes, a 50-year old technology, to more data-rich, robust two-dimensional barcodes (i.e. a QR code).
While we already see QR codes on packages right now, GS1 is advocating for the uniform use of one specialized code that would both “go beep” at checkout and provide access to the product information that consumers want. The GS1 Digital Link standard is what helps barcodes and other data carriers become web links—connecting a product’s unique identity to online sources of real-time information that brands control.
By shifting to 2D barcodes, brands can unlock the possibility of more meaningful digital experiences originating from the product package. The UPC has created efficiency at the checkout for years by enabling price lookup on a box of spaghetti, for example. But it is limited in its ability to provide rich amounts of data other than price look-up and product identification.
Here’s an overview of the main benefits this shift would provide to companies large and small:
- More opportunities to showcase how-to videos, stories about the product’s founder, coupons, detailed information about product origins and ingredients, and more.
- More room on product packaging to express your brand colors and identity.
- Supply chain efficiencies such as better recall management and inventory management. The 2D barcode holds more information helping to boost back-end B2B operations.
The adoption of 2D barcodes is already starting to gain momentum within the industry. Athletic apparel brand, Puma, for example, is seeing the opportunity to become a first mover and innovate to better respond to their consumer base.
Lauren Antenucci, manager of loss prevention at Puma, explained at GS1 Connect 2023, the annual conference hosted by GS1 US, how the company’s flagship store in New York City no longer has any use for traditional UPC barcodes.
“We have actually eliminated UPC barcodes from any processes in our stores. So while, we have a UPC on our tags because it’s a requirement for our wholesale consumer right now, we don’t actually use it for anything,” she explained.
Antenucci also described the benefit of having more user data to understand how shoppers interact with items in the store, down to the days and the times they were actually interacting with the codes.
“We could get increased data from these scans and really drive our business decisions based on what the consumer was interacting with,” she said.
The 2D barcode movement is not just an opportunity for big companies. Small, independent brands are enthusiastic about the emerging benefits of the migration from the UPC to the 2D barcode.
Psyche Terry, founder of Urban Hydration, a skincare line featuring natural ingredients, describes the moment she got UPCs for her product as a realization that her products could “look the part” and boost their success with retailers and marketplaces. Today, she is focused on the opportunities that come with 2D, recognizing that it is an innovative way to engage target communities and gain more as a shopper.
“I can already envision all the possibilities for our company and products with the shift to 2D barcodes,” said Terry. “Small brands as well as bigger brands can all take advantage of this moment and embrace this innovation. It’s sure to change the way we sell and shop all at the same time.”
For more information about 2D barcodes, including podcasts and guidance on adoption, please visit https://www.gs1us.org/lp/2d-barcode-innovation.