Both retailers and brands are keen to make the switch from the UPC to a data-rich code, a new study from GS1 US revealed, but their state of readiness varies.
The study, “Powering the Future of Retail,” reported that 82% of retailers and 92% of brand owners support transitioning from the UPC to a data-rich 2D barcode, such as a QR code, digital watermark, RFID and/or GS1’s own DataMatrix code in the next one to five years.
GS1 is a non-profit that facilitates industry collaboration to help improve supply chain visibility and efficiency through the use of its supply chain standards system, GS1 Standards. Its study was conducted in partnership with VDC Research, which surveyed nearly 600 IT decision makers at retailers and conducted interviews with retailers, brand owners, solution providers, industry associations and academic institutions during 2018 and 2019.
While the study estimated that 68.5% of retailers use laser scanners incapable of reading a 2D barcode, 84% are evaluating or plan to migrate to advanced optical point-of-sale (POS) scanning technology. What’s more, 60% of retailers with over $1 billion in revenue are prioritizing updating their entire POS infrastructure within the next two years because of omnichannel commerce and mobile POS requirements.
Motivation for switching to more advanced barcodes and POS systems included improved inventory accuracy, product authenticity, traceability and recall management, freshness and waste prevention, and returns management.
Meanwhile, the barriers cited included cost, disruption to products and packaging, a lack of capital investment and IT staff required for technical infrastructure changes. During the transition, brands and retailers will need a flexible architecture that supports dual barcoding; GS1 cited the credit card industry’s use of human-readable numbers, magnetic swipe, NFC “tap to pay,” and chip EMV technologies as an analogy.
“Today’s UPC does not carry the additional information required to support future supply chain and customer needs,” said Dave Bornmann, senior vice president grocery and fresh, Publix Super Markets. “Before adopting a new data carrier, further considerations will be necessary to evaluate the return on investment from upgrading scanning equipment, enhancing supporting systems and the additional labor needed to collect and verify data. We are confident that in partnering with GS1 US, retailers and our trading partners can begin the challenging work of updating product data carriers and infrastructure, while also minimizing POS disruption for consumers.”