Op-Ed: Why The Barcode Will Soon Become The World’s Largest Consumer Engagement Platform
Niall Murphy, CEO and co-founder of smart products platform EVRYTHNG, discusses how an update to the standard will give every product a web address
Named by the BBC as one of 50 inventions to have shaped the modern economy, we take the ubiquitous barcode for granted. Used by more than two million manufacturers globally on more than four trillion individual products each year, more than five billion barcode scans take place in retail locations every day. Now, following updates to iOS and Android that mean more than two billion smartphones around the world can automatically scan standard codes, GS1 (the standards body that manages the barcode and other product coding standards) has kicked off a program to effectively update the barcode. The update will open the barcode up to work not just with point of sale systems but with smartphones too, giving every product a web address. Expected to be released in June this year, a new standard from GS1 will mean that every one of those four trillion consumer products carrying a barcode can become a platform for consumer engagement, working seamlessly with smartphones and retail systems and feeding an unprecedented amount of data and insight to the cloud. This is a big deal.
Knowledge of, and relationships with, end customers are at the heart of the competitive dynamic in the connected world we live in today. But the battle to secure that connection and insight has become ever more complex. Brands face hurdles in the shape of mobile adblocking and GDPR data compliance to get through to even make the connection with the consumer, let alone providing a compelling enough experience to engage them effectively. And then there is the battle for control of the relationship with Amazon and other e-commerce channels. Amazon’s scale means brands have to be there, but risk perpetuating disintermediation, with Amazon increasingly taking over ownership of the customer relationship, and customer insight and brand loyalty the biggest victims.
Enter a new, digitized version of the barcode that turns every consumer product into a direct-to-consumer channel with smartphone interaction and a connection to the web.
Thanks to WeChat and other major platforms, the QR code has become a roaring success in Asia, with consumers across the region scanning more than 100 million codes on packaging, tickets, in-store displays, and out-of-home advertising every day. These codes are driving revenue as well as engagement, with $1.65 trillion in mobile payments completed in China and Japan alone in 2016. The trend is taking hold in the US and Europe too, with Facebook, Snapchat, and Spotify deploying codes for consumer engagement and tapping into millennial and Generation-Z mobile-first behaviour.
But these initiatives have been hampered by three things: a lack of standardization of the consumer trigger and call to action; the cost and complexity of printing multiple codes on products and packaging for different markets and campaigns; and the inefficiency and packaging real estate challenge of implementing multiple codes for multiple applications on the product.
This is why GS1’s initiative – dubbed ‘GS1 URI’ – is so important. By replacing the barcode with a QR code that supports both point of scale systems and smartphone interaction, GS1 solves the problems of economies of scale and packaging real estate. Brands can get behind one code and a consistent user behaviour, delivering an enormous opportunity for direct-to-consumer connectivity and first-party data-generation. And it’s coming fast. With more than two billion smartphones around the world already supporting automatic, native product interaction with these codes, the audience is ready and waiting.
Picture yourself holding your phone up to the tag on a new jacket and watching a video about the materials and manufacturing processes, being shown the perfect shirt to match it, or seeing detailed care instructions. Scanning the box your new television came in to validate the warranty. Reordering razor blades when you’re running low. Playing a tabletop augmented reality game over breakfast after scanning the back of the cereal box. Unlocking an invitation to an exclusive fashion show, just by scanning the tag on your handbag. These experiences can be facilitated by internet-enabled codes, and integrating the smart functionality with an existing code as common and recognisable as the barcode will enable consumers to access them at a mass scale.
Each product item has a QR code printed on it that contains a unique web address.That web address means the product can have a digital identity in the cloud, applying all the intelligence of the web and cloud analytics to deliver sophisticated experiences to the end-customer and capture every morsel of data possible.
For brands the benefits go beyond consumer engagement to the generation of insights and efficiencies with data gathered throughout the entire product lifecycle. Product tracking and authentication can minimise supply chain risk, identify fraud and theft, and reduce the impact of product recalls. Brands can have unprecedented insight into how and where consumer use products, and how often and for how long – vital for understanding the ‘table life’ of that cereal box, for instance.
The ability to know where products are, who’s got them, and what they’re doing with them is a fundamental competitive necessity in a world where knowledge of customer and analytical effectiveness determine who wins. The data management of products is therefore a critical success factor. The upgrade of the world’s barcodes is an enormous opportunity for brands to get back into the driving seat, turn on a fire hose of product lifecycle data, and deliver compelling experiences to end-customers right at the point where they want brand engagement – when they’re interacting with the product that the brand is all about.
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