A new barcode standard, in the works for several years and now nearing its sunrise date, could greatly improve the shopping experience while bringing added value to both retailers and brands.
The GS1 DataBar is a 14-digit code symbology that can hold more data than a traditional UPC barcode, while taking up much less space. Its diminutive size means that for the first time, it is practical to barcode hard-to-mark products like fresh foods, loose produce and items with very little surface area like individual tubes of lipstick.
The standards organization GS1 US endorsed the symbology in 2005, and has worked with retailers, brands and technology providers in the interim years to speed its adoption. The organization has set a sunrise date — the date when retailers are strongly encouraged to be able to scan the new codes — of January 1, 2010.
"The interest has suddenly spiked in the last six months," said John Wilson, NCR's senior product manager for barcode scanning solutions. "I've been doing a lot of presentations to retailers in the last six months. There are a lot of projects around retail, vying for dollars, and when you have a date of 2010, suddenly everybody says, 'We've really gotta jump on this thing.'"
Major retailers like Walmart, Loblaw's and Winn-Dixie are already up to speed with DataBar. POS vendors like HP, Microsoft, IBM, Wincor Nixdorf and NCR support the technology; Wilson said all of NCR's scanners since 2002 are DataBar-ready.
A happy medium between UPC and RFID
If you've purchased an apple at a Walmart store recently, chances are you've already come across the GS1 DataBar. Steve Arens, director of industry development for GS1 US, said produce and fresh food departments are coming onboard with the program as seasonal harvests roll in — for instance, grape and cherry providers are getting ready for this year's big harvest, and are investing in bags and labels that are DataBar-ready.
In a way, he said, the GS1 DataBar is something of a "happy medium" between traditional UPC codes and the long-term vision of the Electronic Product Code, or EPC, in which RFID-enabled tags give every single product a unique fingerprint.
GS1 DataBar doesn't quite get down to that level of granularity, but it does provide a great deal more data than a typical barcode or a four-digit PLU code. All bananas are PLU-coded 4011, for instance, but with the DataBar, retailers will be able to easily break out Dole bananas versus Chiquita ones.
DataBar codes can also contain much deeper product information, such as expiration dates. Wilson said this makes the technology very attractive not only in fresh produce but in the meat department, as well. "The consumer can be assured that the POS won't let them walk out of the store with something that is outdated," he said.
To ensure backwards compatibility, GS1 DataBar codes can also contain the product's 4-digit PLU. (Photo courtesy NCR)
The shopper will also have a better experience at checkout, Arens said, because he will no longer have to manually enter the four-digit PLUs when using self-checkout, or hope that the cashier's knowledge of produce is sufficient to correctly recognize what's in the bag.
That last point is good news for the store, too: Wilson pointed to a study performed at Dayton, Ohio-based Dorothy Lane Markets, which found that the loss at the POS by cashiers misidentifying produce adds up to one percent of revenue. "That's huge," he said, "especially considering that produce is one of the most profitable areas of the store, if it's properly registered."
PRESENTATION: Watch a 20-minute online presentation that goes deeper into the GS1 DataBar standard
|story continues below...
The Best Retail Customer Experiences 2009
Find out which retailers consumers crowned their favorites in five different categories across eight different retail segments. Get authoritative analysis from members of the Retail Customer Experience Advisory Panel on why these retailers are succeeding. And learn which retail technologies win over customers — and which ones don't matter.
"The couponing clock is ticking"
For all of its benefits to the supply chain and the customer experience, the GS1 DataBar standard might prove even more useful when it comes to promotions and couponing.
The UPC standard first came out in 1974, but it was never designed to do many of the things it is being asked to do today. Coupons have proven especially problematic, for two reasons: the growing number of manufacturers and the increasing complexity of offers.
Wilson said that when the first barcoded coupons were released in 1985, manufacturer ID codes were five digits long. Today, those codes can be as long as 10 digits, something UPC simply cannot handle. As a result, many of today's coupons require two barcodes to carry the necessary data.
Coupon-based offers themselves have gotten more complex, too. Simple BOGO offers still abound, but so do more arcane "buy three Brand X products and receive this specific item free" deals, which up to now rely on the accuracy of the cashier to execute properly. Coupons barcoded with the GS1 Databar can work with the POS to automatically make sure all conditions are met before issuing the discount.
"The potential for retailers to take advantage of additional data in the POS and supply chain applications is tremendous," said Vic Miles, retail industry technology strategist for Microsoft, whose POS for .NET product fully supports the GS1 standard. "Retailers will now be able to create more complex promotions that match the way consumers want to shop."
Wilson noted that "the couponing clock is ticking" — as of January 1, 2010, coupons circulated in the U.S. will exclusively use the DataBar format.
Possible costs of GS1 DataBar
While most POS systems purchased in the past 8 years are DataBar-compliant, retailers may encounter other costs as part of the transition. They may include:
- Scanner upgrades or replacement
- Operational costs to make application use of new data
- On-line printing capabilities
- Marketing, communication and education
- Packaging changes, though most are expected to happen in a natural product life cycle
- Deli/meat printer and scale upgrades
(Source: GS1 US)
James Bickers is the senior editor of Retail Customer Experience, and also manages webinars for Networld Media Group. He has more than 20 years experience as a journalist and innovative content strategist, with publication credits in national, international and regional publications.