Retailers are increasingly embracing the latest 2D barcodes to help improve sustainability and customer engagement while dramatically reducing waste across the supply chain.
The data-rich barcodes, including both QR Codes and GS1 Data Matrix, serve as a digital product label.
Marcel Sieira, Chief Customer Officer of Ai Group member GS1 Australia, spoke at the recent confectionery sector conference, ConTech2022, about the benefits of 2D barcodes powered by the GS1 Digital Link standard in the food industry.
GS1 is the not-for-profit, international organisation that develops and maintains the most widely used supply chain standards (including barcodes standards).
Mr Sieira said 2D barcodes powered by GS1 Digital Link were hugely beneficial to brand owners, regulators, retailers and consumers.
“Everyone benefits,” Mr Sieira said.
“In the past, with traditional barcodes, the only thing you could embed inside that barcode was the barcode number; nothing else.
“With the new standard, as well as embedding it in a URL format, you can also capture a lot more information about the product: things like batch numbers, expiry dates, best-before dates etc."
Although the standard first became available in 2018, it is only recently that retailers have begun to embrace the technology — with phenomenal outcomes.
“What we’re starting to see is the implementation of that standard across retailers that is making it possible for brands to leverage this capability for themselves,” Mr Sieira said.
The benefits for a business moving to 2D barcodes in product labels include:
Using the technology, fellow Ai Group member Woolworths has automated point-of-sale (POS) transactions to reject products that are past their expiry date.
“Manufacturers can more effectively execute a product recall if they have a 2D barcode that contains a batch number,” Mr Sieira said.
“Existing systems don’t let you target product recalls by batch; the entire product would be blocked from POS, and everything is thrown away.”
On labels that lack these data-rich barcodes, the batch number is displayed in a human-readable form.
“This means you need people to look at the product label, then look at the expiry date and the batch number and see if that batch number is included in the recall or not,” Mr Sieira said.
“That takes a huge amount of time and effort, but if you’ve got all that data inside a barcode, then retailers can stop a specific batch of a product from being sold at POS and only lose the sales of affected batches.
“From a sustainability perspective, this standard significantly contributes to a reduction in food and packaging waste.”
Shoppers can use their smartphones to scan these barcodes to access whatever information brands make available to them.
“Consumers can be redirected to any number of online resources that the brand may want to expose them to, for whatever purpose: recipes or allergy and recycling information, among other things,” Mr Sieira said.
“So that’s what’s really changed. It sounds like a basic change but in essence, what this new standard allows that was never possible before is to have a direct link between a product and its digital twin (information that exists about that product on the web).”
Shoppers’ tendency to engage with these codes varies from country to country.
“It’s a cultural thing,” Mr Sierra said.
“Different countries have different histories with QR codes. For example, QR codes have been part of Korean and Japanese culture for many years so shoppers there are much more likely to engage with QR codes.
“In Australia, QR codes have become more universal since we were required to check into venues during the height of Covid-19.
“If you have dietary requirements or allergies, you will probably scan more frequently.
“The next step is for industry to work out how to provide information that consumers really want.”
GS1 — which is headquartered in Brussels and has offices in 115 countries — has a niche role.
It is solely responsible for allocating the series of numbers that make every barcode unique and able to be scanned and recognised by any retailer around the world.
“We don’t give manufacturers the barcode, we just give them the numbers,” Mr Sieira said.
“We manage the unique ID of products at a global level. If GS1 Australia gives Nestle Australia the number to put on a Freddo Frog, that number will be globally unique.
“It’s like a passport for products. To ensure uniqueness, you need to have central management of the issuances of these unique IDs.”
Commercial organisations build the technology, such as the scanners used to read the barcodes.
“So, the brand gets the number from GS1 then goes to a company for their technology requirements,” Mr Sieira said.
“We don’t get involved in commercial decisions. We issue the numbers and provide support and advice, but we don’t get involved in providing the technology. Instead, we partner with over 70 solution providers that know and understand our standards.”
GS1 works closely with manufacturers and retailers around the world to constantly improve the efficacy of barcodes.
If a manufacturer identifies a way in which a barcode can be improved for their business, GS1 will consult with other relevant users around the world to determine if the requirement is common across the industry.
Global input is sought, and a working group might then be established to create a specific standard to address the requirement.
“The process of developing standards is user-driven and ultimately, a global standard is created,” Mr Sieira said.
Determining if there needs to be a minimum amount of data in these barcodes is the type of issue that GS1 is presently considering – and whether this information should be the same for all industries, whether it’s food or pharmaceuticals.
The desire to digitise has intensified in recent years.
“These barcodes, with their ability to link a physical product to information available on the web, are an amazing step in managing supply chains and transforming retail,” Mr Sieira said.
“It’s becoming increasingly critical for all sorts of processes such as traceability and compliance with regulatory requirements.
“It’s not just about retailers and consumers and it doesn’t apply only to food.
“We’re applying the same concepts to medical devices, pharmaceutical products and even things like steel rods.
“The potential is huge.”
GS1 Australia has been a member of Ai Group since 2018.
“GS1 Australia has been both a partner and a member of The Australian Industry Group for many years. Ai Group provides unparalleled support for businesses of all sizes across all sectors which has become invaluable in today’s unpredictable and ever-changing business environment. Ai Group understands its membership’s needs and acts with focus to always deliver value. Its recent ConTech2022 conference is a great example of how Ai Group brings industry together to raise and discuss common issues and challenges and together develop action-oriented plans to address these issues and generate value." — Marcel Sieira, Chief Customer Officer, GS1 Australia
Wendy Larter is Ai Group's Communications Manager. She has more than 20 years’ experience as a reporter, features writer, contributor and sub-editor for newspapers and magazines including The Courier-Mail in Brisbane and Metro, News of the World, The Times and Elle in the UK.