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Retailers Readying for Barcode’s Successor?

Posted by admin on 2/5/14 10:00 PM
Topics: college retail, retail technology

The following excerpt is from an article written by Ed Knudson and published on NRF's Stores. Read his full article for more background on the barcode and where it could be headed next.

Traditional barcodes have certainly served the retail industry well, but technology has advanced considerably since 1974 and our little striped friend could use an update. Not only are they visually unattractive, they use up valuable space on packaging and take too long for clerks and consumers to find and scan during checkout — not to mention the ever-present risk of unscrupulous shoppers swapping barcodes in order to be charged less for expensive products.

Increase checkout speed
A new innovation of note emerged from the recent NRF annual convention: digital watermarking — a cost-effective technology that promises to bring the barcode into the 21st century by dramatically speeding checkout, improving reliability and creating unprecedented consumer engagement opportunities with today’s mobile-enabled shoppers.

Digital watermarks are imperceptible patterns that can be embedded into the images and graphics of merchandise packaging, and in some cases directly into the packaging material itself. The pattern is not visible to people, but smartphones, POS scanners and other digital imaging devices with more sensitive “eyes” can read them. Unlike today’s visible barcode, this breakthrough makes the entire package scannable with no dedicated space required.

This pattern contains the same item number data currently carried in the product’s UPC code and is invisibly repeated multiple times over the entire package. This means that checkout clerks, as well as shoppers using self-checkout, can quickly pass packages over the scanner without having to orient the barcode to the camera.

Digital watermarks not only dramatically speed up checkout, but also create new, in-store mobile engagement opportunities with shoppers. For instance, shoppers can scan a product’s watermarked packaging with their mobile devices and receive promotional messages, coupons or product pairing/upsell suggestions. Indeed, in an increasingly mobile world, it is inevitable that brands and retailers will only further incorporate mobile devices into the shopping experience.

With no visible markings, digital watermarks also improve packaging aesthetics. And, unlike yesterday’s barcode, they can also be embedded into audio and video material.

Deepen consumer engagement
The publishing and direct marketing industries have already had tremendous success incorporating digital watermarks into print editions and catalogs to enhance reader engagement. As of November 2013, more than 50 magazines including Cosmopolitan, Costco Connection and Sports Illustrated had incorporated digital watermarks into their pages, as have Bed Bath & Beyond and Sharper Image catalogs.

Because digital watermarks offer benefits across multiple channels and media, retailers and brands can use the technology to facilitate deeper consumer engagement at every touchpoint throughout the shopper’s journey.

The good old barcode isn’t going away anytime soon. But perhaps with the help of new innovations such as digital watermarks, it can keep pace with today’s rapidly evolving retail environment.

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