Sunday, September 7, 2008

Adoption of 2D Barcodes in Retail Industry

On June 26, 1974 at 8:01am, the first product with a bar code, a 10-pack of Wrigley's Juicy Fruit chewing gum, was scanned at a check-out counter at a Marsh's supermarket in Troy, Ohio. This move has set the foundation for the next generation retailing which we experience today. Prior this significant initiative, barcodes were used towards the non-retail activities such as car labeling.

While the barcodes have served retail industry for the past three decades, people have started looking for alternative solutions that fits into the current digital era. There are debates on advanced technology solutions such as RFID as a replacement for barcodes. But till date the barcode seems to dominate due to its penetration and maturity.

As retailers are more conscious about the ROI, they seek solutions which can extend the capabilities of today’s barcode without investing huge sum of money. One of the key requirements is to store more information in the form of barcodes. People started to realize that 2D barcodes can be an answer to their above search.

So how these 2D barcodes differ from traditional 1D barcodes? As opposed the traditional row of black lines ( 1D barcode), 2D barcodes look like a grid and make use of a second, vertical dimension, allowing them to store more data.

About 18 month’s back I came up with the idea of using QR codes (a variant of 2D barcode) in the retail space. Till this time, the various forms of 2D barcodes were extensively used in industries such as automobile & electronics manufacturing and travel industry. Having this idea as a base, I developed the concept of mobile phone shopping using 2D barcodes and showcased it to several CXOs of leading global retail organizations. Whomever seen this solution admire this futuristic idea and confirm that this is an economically viable solution for next generation retailing. It is good to see that people have started to take the first step towards this direction through pilot projects.

Pressures due to poor economic climate and limited investments for new initiatives hold back retailers from investing money towards technologies such as RFID. At the same time, they are under pressure to improve their operational efficiency. As a result, efforts towards adoption of 2D bar codes in retail stores seem to be on the raise.

Sears, in conjunction with vendor ScanBuy, became the first U.S. retailer to begin a public trial that started in mid-December 2007 at a store in Marietta, Georgia.Sears Holdings recently completed its six-month trial and the project lead says results confirm the technology holds promise in the retailer's stores.

In the near future, 2D barcodes can be the total alternative for the traditional 1D barcodes. Right from suppliers to sales floor to point of sale, 2D barcodes can help retailers in improving operational efficiency and customer satisfaction. It will also considerably bring down the investment towards special hardware for scanning the barcodes. Once all the products are tagged with 2D barcodes, customers and store associates can scan the barcodes and access information through common devices such as mobile phones with integrated camera. The only key investment required from the retailers is the software that can be installed in the mobile phones.

There is no dount that 2D barcodes will replace the traditional 1D barcodes in a decade time.

I can assure that retailers can benefit from 2D barcodes in a big way by adopting right technology platform, standardized approach and a clear roadmap.


streetstylz said...

It should be noted that:

Scanbuy’s indirect resolution process, which they use for their proprietary EZcode, is infringing on NeoMedia Technologies’ core patents.

Scanbuy uses the indirect encoding method for their barcode resolution process.

Indirect encoding (patented by NeoMedia) is the process of linking the target information to an index (364528 for example) and putting that unique identifier into a 1D UPC/EAN or 2D barcode. The code reader on the mobile phone reads the barcode and sends the code data over the Internet to a central resolution server that will tell the mobile phone what action is associated with the index, i.e. access a URL, download media, initiate a phone call, ect.

NeoMedia Technologies has a suite of twelve issued patents covering the core concepts behind linking the physical world to the electronic world dating back to 1995. These patents cover various linkage methods including: Barcodes, RFID, Mag Stripe, Voice, and Other machine readable and keyed entry identifiers.

NeoMedia brought suit against Scanbuy. Litigation has been ongoing.

sukumar said...

nice post Ramesh.