Manage episode 288780147 series 2903397
In this episode we are going to explore using barcodes on consumer packages for customer engagement and look away the same barcode can possibly be used to be scanned at the point of sale.
This idea is certainly not new - here is a link to a Packaging World article on this very topic from 2011:
The article specifically mentioned that QR codes would provide the ability to download coupons, enter contests, play games and other fun activities – all powered by those little barcodes.
This all seemed quite exciting, but QR codes got old quickly and the concept seemed to fade away.
Fast forward to today and there is renewed interest in using packaging to actively engage with customers.
Traditional ways to communicate to customers such as TV and print advertising are not performing as well as In the past. They are also a one-way form of communication. In addition, engagement on brand-owned social media pages is in decline.
AS a result, brand owners have a renewed interest trying to set up a direct connection to their customers based on the product packaging
Enter smart packaging – a means to allow brands to connect directly with their customers. Generally, a smart package will allow the customer to scan a barcode (yes, usually a QR Code) and be connected to an interactive website.
So QR codes are back - a lot of brands are using them – some quite creatively
Currently, there isn’t a standard to use QR codes (or any type of barcode) for customer engagement so brands are tending to encode them in different ways - often just a URL, sometimes other data.
Of course, the package’s UPC barcode still needs to be there so most items would have to have multiple barcodes – rather messy and takes up more space on the package.
In addition, barcoding for point of sale hasn’t really changed for 45 years, when it was first introduced.
Wouldn’t fit be great, if one small barcode could handle point of sale, customer engagement and much more
Last year, GS1 our favorite standards organization came out with a new concept: GS1 Digital Link.
While the name might not be too exciting, Digital Link has the potential to revolutionize how barcoding is used, to add true customer engagement and to (yes really) provide item-level serialization and traceability.
For primary packaging (what we would buy in a store), GS1’s barcoding is built around the concept of the Global Trade Item Number – GTIN. This is what is encoded in the common UPC barcode that is scanned at the checkout.
The GTIN in the item barcode basically consists of a company prefix and an SKU or stock keeping unit number. The GTIN identifies a type of product – a 12oz can of Pepsi Cola or an 8 oz bag of salt n vinegar Lay’s chips for example. Every item sold at retail and many other products that use the GS1 system (such as pharmaceutical or medical products) has a GTIN.
It is important to note that a GTIN doesn’t identify an individual item – every 12oz can of Pepsi will have the same GTIN.
In the GS1 system, each level of packaging has its own GTIN.
So in the Pepsi example, there might be the following
Single Can GTIN
6-pack of cans GTIN
Tray of 4 6-packs GTIN
Also, no additional data can be encoded in the product barcode – only the 12 digit UPC in the US or 13 digit EAN code internationally. This is why additional barcodes must currently be added to a package in the event a brand owner wants to encode more data.
Other GS1 barcodes such as GS1 128 that are usually used on logistics items such as shipping cases or pallets can be encoded with a lot more information.
Traditionally, barcodes in the GS1 system have been used in the supply chain from manufacturer to point of sale.
GS1 Digital Link promises to extend the reach of the GS1 system all the way from the manufacturer to consumer and to provide a means of interaction between the brand owner and the consumer.
So How does it work?
For the first time, GS1 is allowing a 2D QR barcode to be used as the barcode for point of sale.
Encoded within the barcode is a URI (unique resource identifier – an example of which is the familiar website URLs we use every day) and a number of other possible data fields that include:
The expiration date and many more
The ability to include all this data in one barcode means that only one barcode needs to be printed on the package and it can be used for point of sale, traceability, anti-counterfeit and for customer engagement by sending a consumer who scans the code to an interactive website.
GS1 Digital Link could prove to be the biggest revolution in barcoding since the first code was scanned in a store 45 years ago.
When will this start?
It is going to take a while and we can expect to see both traditional UPC codes and the new QR codes used side by side until the infrastructure is in place to handle the new 2D barcodes.
A survey carried out by the food marketing institute found that in the US nearly 40% of POS scanners are capable of reading 2D codes today and that will increase to about 55% by 2022.
The POS systems to handle the data are running somewhat behind, with an estimated 20% of systems being able to handle this data.
There is clearly a ways to go.
In the same survey, stakeholders saw the advantages of switching to data rich solutions such as follows:
60% better inventory accuracy
40% better customer engagement
35% recall control
33% expiration date control.
Finally, 85% of stakeholders see 3-5 years to get a higher data density solution to the current UPC established.
So there is certainly a lot of interest in GS1 Digital Link. While I’ve discussed the use of QR codes in this podcast, other data carriers that could be used (and be very interesting) are NFC RFID tags and the Digimarc system that turns the complete package into the barcode. Digimarc will be the topic of a future podcast.
Should be interesting days ahead.
GS1 Digital Link FactSheet: https://www.gs1.org/sites/default/files/digital_link_factsheet_2019.pdf
GS1 Digital Link Specification: https://www.gs1.org/docs/Digital-Link/GS1_Web_URI_Standard_i1_r_2018-07-17.pdf