A transition to 2D barcodes will enable better experiences for consumers and brands in the digital era—and everyone in the supply chain must be ready.
For over fifty years, manufacturers and retailers have been using barcodes to help better identify and track products. But now, as the consumer becomes more digital, current barcode standards have become limited. Now, perhaps one of the biggest changes in the retail industry is about to take place: the adoption of 2D (two-dimensional) barcodes, which is poised to dramatically enhance the experiences of consumers, brands, retailers, and every other player in between.
Leading the change is GS1, the international non-profit organization that develops and maintains barcode standards. In the midst of this transition, they are supporting industries around the world to ensure that the full potential of 2D barcodes are realized, enabling business solutions today and into the future.
The new standard
Founded in 1974 and based in Belgium, GS1 traces its origins to several organizations that came together to develop what would be the barcode, designed to identify products wherever they may come from in the world. Initially developed to speed up the check-out process in stores, it has since made it easier for products to be tracked, processed and stores, improving global supply chains across both digital and physical marketplaces.
However, current 1D (one-dimensional) barcodes are limited in their ability to meet new customer requirements. Already we have seen forms of 2D barcodes in products—often in the form of Data Matrix codes, the most common of which is the QR code—but they are only put on packaging to address a single use case, such as pointing the customer to the products website.
GS1 is planning to leverage on its set of standards to maximize the 2D barcode. It envisions one such code, coupled with a GTIN, or Global Trade Item Number, another one of their standards which identifies products and integrates previous standards such as the IAN and UPC. When combined, this barcode can enable limitless opportunities: provide customers the information they need, powering a global supply chain, and still going beep at the front end of retail stores.
The 2D barcode will enable flexibility and choice of barcode for both brands and retailers. Scanning systems—including mobile phones—should be able to read and process the desired data from any standard barcode that may appear on a product. GS1 is currently conducting global, consistent and impartial testing to ensure that scanner systems can process and ingest the right information, regardless of which (and how many) barcodes are affixed on a product.
Making this possible is the advent of new point-of-sale scanners that are capable of reading 2D barcodes. It has been projected that more than half of global retailers will be 2D capable by 2023, and upgrades continue among retailers globally. In addition, smartphones are also capable of reading certain 2D barcodes.
But this doesn’t mean the end of the current 1D barcode. Both types of barcodes will coexist for as long as there are uses for them. Manufacturers and brands, however, should at least include the product’s GTIN in every barcode.
With that said, the goal is to complete the transition by the end of 2027. By this time, retail POS scanners should be capable of reading both old and new barcodes.
How we can leverage
The transition to 2D barcodes unlocks a world of possibilities for both brands, retailers and consumers.
With one code, consumers can use their smartphones to learn more about their products whether they are in a store or not. They can also obtain information on the product across its lifespan, from the moment it is purchased, to the moment it is used, to the moment it is disposed of or recycled.
Manufacturers and brand owners can use one code to both better track their products, as they are currently able to do with 1D barcodes, but with a greater amount of possible applications—especially once solution providers leverage on them with new systems and tools. With the same code, they can engage their customers better not just by providing information about a product, but also by suggesting ideas on how to use it—say, recipes in a barcode on a can of tomato sauce.
Retailers can also use the same code to further streamline their inventory management and improve the store experience. Perhaps retailers can collaborate with brands so that a code will have, perhaps, distinct offers when bought at a certain grocery chain? Again, the possibilities are endless.
But to facilitate this transition, stakeholders should better understand how the new 2D barcode standard will be used in their own products and stores: who will scan it, where it will be scanned, what uses are they being scanned for, and what data is needed. Here are some things to consider:
- Retailers, as the ones leading the transition, should create a vision for use cases that 2D barcodes can enable. They should assess their current technical capabilities, such as scanners and back-office systems, to understand their roadmaps and enable scanning of all barcodes. There’s a good chance some, if not all, of your systems are already capable of reading 2D barcodes.
- Manufacturers and brands should bring together their supply chain and marketing teams and work on a combined barcode strategy that achieves both customer engagement and supply chain goals.
- Solution providers should consider what upgrades are necessary to enable multiple barcode scanning and printing, and support whatever end-users decide to pursue.
GS1 teams worldwide, including in the Philippines, are working with industry stakeholders to support 2D implementations and assist in the design of proof-of-concept or demonstration pilots. Visit gs1ph.org to learn more.