The humble barcode turns 50 and the next generation is on the way
Speaking to SmartCompany, Maria Palazzolo, CEO of GS1 Australia, explained the importance of the new 2D barcode system for retailers, brands, and the public.
Fifty years ago, a few printed lines opened a world of possibility. The humble barcode, the product-identifying stamp used by supermarkets, warehouses, and healthcare services worldwide, in June celebrated five decades of use.
That machine-readable code has come a long way since its first usage in the USA, with billions of unique barcodes now scanned each day across the globe.
Now, GS1, the international organisation which oversees the barcode standards system, is rolling out a next-generation barcode format.
Speaking to SmartCompany, Maria Palazzolo, CEO of not-for-profit GS1 Australia, explained the importance of the new 2D barcode system for retailers, brands, and the public.
In honour of five decades of the barcode, here are five key takeaways.
Where was the first barcode scanned in Australia?
Big businesses often get first dibs on cutting-edge technology, but Palazzolo says the barcode, one of the most consequential developments in the retail sector, likely saw its first Australian use by a small business.
“We believe — while we don’t have an absolute accurate record — the very first barcode scan in Australia was probably in 1980 and this happened in a very, very small Sims supermarket in Melton,” Palazzolo said.
It was actually smaller businesses that first engaged with the barcode system in day-to-day trade, she continued.
“The reality is, when you look at history from when it happened in the US, to our very first barcode scan in Australia, was very, very small retailers that actually took the opportunity, not the big ones.”
Palazzolo hopes this openness to adopting new technology will extend to the 2D barcode system, which resembles the QR codes Australians are now used to scanning with their smartphones.
When will the new barcode system become mainstream?
The 2D barcode system significantly builds upon traditional linear barcodes through the quantity of information each code can store.
Backend systems can also attach much more information to each 2D barcode, opening new possibilities for use.
GS1’s goal is for all retailers worldwide to have the capacity to scan a 2D barcode at the point of sale by 2027.
“That’s what we’re aiming for — that at least the retailer has the ability to make a decision as to whether they’re going to scan 2D barcodes or not,” Palazzolo said.
This does not mean that linear barcodes will become obsolete, and Palazzolo said there’s no established phase-out date for traditional linear barcodes.
What benefits do 2D barcodes offer to retailers?
Palazzolo believes the 2D barcodes have material benefits for retailers.
The ability to attach dynamic data to each barcode means retailers can intelligently track use-by dates.
“The checkout system will be able to stop consumers buying products that have already reached the use-by date, or alternatively, the use-by date products will be marked down a couple of days before,” she said.
Effectively selling products before their use-by date can help to reduce stock wastage, which is a “huge, huge problem for retailers,” she continued.
Early usage of 2D barcodes at Woolworths has already reduced food wastage, Palazzolo said.
Reducing the number of personnel hours required to manually mark down products nearing their use-by date can also benefit retail and grocery businesses.
How can brands make use of 2D barcodes?
Retailers are not the only potential beneficiaries of the system, with Palazzolo highlighting the potential advantages for brands.
Customers can scan 2D barcodes with their smartphones to access extra information, like recycling instructions, traceability information, and additional nutritional data.
Palazzolo suggested latecomers to the technology could find themselves at a disadvantage.
“I want all of this information that’s really important to me, and I can get it by scanning chocolate bar A, but I then try to scan chocolate bar B, and I don’t get any of that information, I start to wonder: why doesn’t that brand want to give me that data?” she said.
The square format is now familiar to everyday consumers, lowering the barriers between shoppers and additional context.
How should businesses prepare for 2027?
With new technology comes the likelihood that many businesses will need to upgrade their in-house systems.
“Every retailer is different, particularly if we’re talking with the smaller retailers,” Palazzolo said.
“But fundamentally, the first thing that I would advise retailers to do is to get hold of the equipment suppliers whose equipment they use, and find out the capabilities of the scanners and the models that they have, and find out what 2D capabilities those scanners actually have.
“You might be surprised: if they’ve actually changed the point of sale systems in the last couple of years, in some instances it may just need a switch to be flicked.”
Harnessing the full power of 2D barcodes also means making use of backend software that can read, store, and understand the extra data.
“The scanner is linked to a complicated backend system, and that’s something that absolutely needs to be looked at in parallel,” Palazzolo said.
“So you do have to talk to your IT people, talk to your systems people to find out what capabilities you have in your backend systems to be able to capture additional data.
“And then when you have captured it, what are you going to do with it? How are you going to use it? How is it going to drive decisions within your business?”
Palazzolo is confident businesses across the spectrum have the time to get up to speed before 2027, and encouraged industry participants to look deeper into 2D barcode capabilities.
“We don’t want to be saying ‘If you’re not ready by that date, then your product’s not going to be able to scan at the point of sale,’” she said.
“We want to simply be able to say, ‘Make sure that you’re working towards that date.’”
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