The barcode at 40 – a retail evolution in progress

Simon Walker (pictured) tracks the progress of the barcode since it was first adopted in June 1974.

Across the world, barcodes are an integral part of retail technology. With five billion beeps a day a familiar part of the high street shopping experience, this is one retail innovation that has stood the test of time.40 years ago, on June 26, 1974, a pack of Wrigley’s Juicy Fruit chewing gum in the US became the first item to be scanned at a supermarket checkout, a year after the retail industry adopted the GS1 barcode as a single unified standard for identifying and tracking products.

Prior to the introduction of the barcode, retail staff used label guns and the only product information it could produce was the price. While there was some resistance at first, GS1 UK, the not-for-profit company that administers the current system, claims that barcodes have improved the accuracy of product identification by a factor of 10,000 and now deliver a range of measurable benefits beyond reduced waiting time for consumers at the checkout.

Indeed, it goes on to claim that the efficiencies that the barcode has created in the supply chain have also enabled 21 per cent shorter lead times for warehouse operators, 42 per cent lower costs for distribution centres and 32 per cent fewer out-of-stocks for retailers, ultimately saving the UK retail industry £10.5 billion every year.

With branches now in 111 countries, and its standards applied in 150, GS1 now has 27,000 members in the UK alone, with 300 more signing up each month. However, 60 per cent of these new members are online retailers, requiring GS1 to consider adapting the design and function of its barcode to meet the product information demands of the multi-channel consumer.

The demands of multi-channel retail 

From stock, location and supplier data, to digital and marketing assets, retailers are faced with managing more product information than ever before, across multiple domains, countries, languages and channels. Managing this wealth and variety of information means that more sophisticated systems are needed to ensure that supply chain operations keep running efficiently.

Additionally, the growing world of multi-channel retail means that the way in which consumers are purchasing products is changing. The advent of new channels means that accurate and consistent information across consumer touchpoints is becoming ever more important. The issues for manufacturing and supply organisations are now how to maintain brand consistency and perception in order to grow revenue and drive sales.

Industry leaders, including GS1 UK, have discussed in the last year how different forms of barcodes are needed to represent these new requirements for product information. A new system could soon mean that a barcode will inform retailers about everything from package variation to expiry dates, ensuring that product information management is made as simple, accurate and effective as possible. However, its introduction is like to cause operational problem and high implementation costs in its initial stages.

Mastering the data

With a Master Data Management (MDM) solution integrated into their workflow, and configured with GS1’s product information specifications, manufacturers and suppliers will be able to easily, regularly and accurately provide the required information, saving both time and money.

By allowing manufacturers and suppliers to provide detailed product information to retailers, along with additional supporting content, the use of an MDM platform will see a reduction in time and cost across the supply chain, as well as an increase in the accuracy and timeliness of the information.

We don’t know yet what the next generation of barcode will look like, and it’s practically impossible to predict what form retail will take in the next 40 years’ time. What we do know is that a change is required and, to ease the transition MDM technology will enable manufacturers, suppliers and retailers alike to equip themselves for the growing demand for information from the multi-channel consumer.

Simon Walker is director of innovation at Stibo Systems