Grocers and manufacturers prepare for the GS1 DataBar.
By Deena M. Amato-McCoy
When the huge crystal ball drops in New York City’s Times Square at midnight to usher in 2011, grocers and manufacturers will be marking the beginning of the end of the bar code as we know it.
The GS1 DataBar, which promises richer and more accurate data across a variety of categories, will be slowly phased in from that point. Supermarkets and suppliers are already undertaking hardware and software upgrades in anticipation of the rollout.
“From a retailer standpoint, DataBar is going to be all about the benefits grocers can achieve through new efficiencies and accuracy at the transaction processing level,” says Brian Schulte, industry-marketing director for Intermec. The Everett, Wash.-based company provides mobile computing and data collection equipment. “All data will automatically populate internal electronic forms and databases once labels are scanned, vs. relying on a cashier to scanning product codes or manually inputting data and risking the chance for keying errors.”
Adoption of the GS1 DataBar is on most supermarkets’ radars, and the good news is the industry is not scrambling to gain compliance, according to industry experts. The project dates back to 2006, when GS1, the global non-profit organization dedicated to global standards to promote efficiency, introduced the reduced space symbology code to the retail industry.
The new code will store a wealth of information to helped users identify merchandise, especially fresh foods. By using the code to manage and track merchandise, retailers expect to reduce shrink and improve category management, industry executives say.
Similar to the former RSS symbol that promised to carry more information and identify small items than the current EAN/UPC bar code, the new GS1 DataBar is a stacked bar code, meaning it has multiple layers. The basic one-dimensional UPC holds only 14 digits’ worth of information, while certain labels within this new code family have up to 71 characters.
This complex bar code was created specifically to improve identification for hard-to-mark products like fresh foods, jewelry and do-it-yourself hardware products. It also can carry GS1 Application Identifiers such as serial numbers, lot numbers and expiration dates, all of which supports product authentication and traceability, product quality and effectiveness, fresh variable measure product identification and couponing.
While The GS1 DataBar may be gaining attention in the U.S., similar codes are already widely used worldwide. “You can walk into supermarkets in different parts of the world and find a DataBar on fruits and vegetables, as well as coupons,” says Frank Riso, senior director, of retail solutions for Holtsville, N.Y.-based Motorola.
Now it is North America’s turn to get in on the game. While the initial compliance date was set for Jan. 1, 2010, an eroding economy changed the game plan, according to industry observers. “Due to the recession, GS1 pulled back. Too many retailers were shifting into survival mode, making it difficult for any company to focus on investing in new technology that would support a new symbology,” according to Riso.
Instead, the Washington, D.C.-based Grocery Manufacturers Association and the Joint Industry Coupon Committee delayed the implementation to Jan. 1, 2011. The first order of business: using GS1 DataBar to process coupon codes.
It is no secret that during the recession, coupon usage was at an all-time high.
“The desire to capture more information and track the impact of promotions helped fuel the birth of coupon DataBar usage,” says Mark Hernandez, senior product manager, bioptic scanners for Honeywell Scanning and Mobility, based in Fort Mill, S.C.
Retailers will soon experience these benefits and more, due to the upcoming January deadline, called GS1 DataBar Coupon Compliance. DataBar coupon codes can contain coupon values up to $99.99, as well as robust supplemental information including product details, expiration dates, even whether the coupon originated from a newspaper, magazine or other paper-based marketing tool. Most importantly, it takes pressure off of the cashier as the code is electronically and automatically validated at point-of-sale, which speeds up processing and eliminates acceptance errors associated with manual processing.
Fighting coupon fraud
Industry experts also expect the new code to help fight coupon fraud. “Retailers cannot escape losses due to fraudulent photocopied and altered paper-based coupons,” Hernandez explains. “The embedded serial numbers on DataBar coded coupons will be automatically captured at POS allowing retailers to instantly verify coupons and properly process discounts.”
Experts say one of the greatest gains from the GS1 DataBar could be to value of new insight into promotions. “DataBar effectively created a standard set of promotions supported by every grocery POS platform, and electronic and Internet promotions operators are leveraging this set of offers as the delivery mechanism to all POS systems,” says Tony van Seventer, StoreNext’s vice president of marketing and products for Retalix, a Plano, Texas-based enterprise solutions provider.
According to executives at major manufacturers, promotions supported by GS1 codes will be fully functional at the start of 2011. They also will be allowed to stop printing UPC codes on coupons. Experts say that UPCs will be phased off of coupons by June, giving retailers a bit of buffer to make upgrades.
Unlike the extensive IT challenges of Y2K, the DataBar is shaping up to be a much smoother transition, according to industry observers. “While retailers welcomed the delay, a majority of retailers are moving ahead and making investments in configurations,” explains Roger Walker, StoreLine product solutions manager for Retalix.
Remediation investments encompass changes to hardware, software, and in some cases, middleware. The biggest investment for many companies is the transition of existing POS and other scanners to imaging scanners that can read the new codes. The good news is since the industry has kept abreast of the upcoming GS1 deadlines, “many have used this as a justification when upgrading their scanners,” Motorola’s Riso says.
The hardware transition makes sense considering the increased functionality they offer. Laser scanners measure the thickness of bar code’s lines to decipher the code’s information. Imaging scanners however, take a picture of each stacked code and decode embedded information.
For example, they can capture data embedded on codes found on many state drivers licenses. This data can be used to automatically complete credit card applications and loyalty card membership forms.
Many chains are learning that some hardware and software needs nothing more than some coding tweaks to activate the functionality. Retalix’s StoreLine POS and store management software, for example, has supported the evolving DataBar code for some time, easing the pain for grocers. Similarly, Intermec began supporting the former RSS technology and now easily supports DataBar. “Our computer settings enable different symbologies, retailers just need to configure hardware as needed,” Schulte says.
Clearly, cost is still an issue for some. “When making the move to imaging, obviously there will be a cost involved,” says Motorola’s Riso. “But the sooner they make the transition the easier it will be to take advantage of future GS1 applications.”
These future applications are not far off. The Coupon Compliance is only the first step. With a national readiness deadline set for Jan. 1, 2014, grocers are anticipating the ability to use GS1 globally on any product. The next DataBar application that is keeping grocers on their toes is using GS1 labeling for loose produce.
While all supermarkets adhere to standard PLU codes, regardless of the chain, the codes only deliver so much value. Bananas for example, have a PLU code of 4011. The downside is this code refers to bananas a whole category, regardless of the supplier. And of course, accuracy is only as good as the cashier inputting the data into POS.
“Retailers lose up to 1% of produce revenue due to incorrectly entered PLU codes,” says Honeywell’s Hernandez. “Besides eliminating manual errors of keying in the wrong PLU code, as imagers capture GS1 codes on bananas, grocers will instantly gain insight into which grower supplied the produce, and more traceability within the supply chain.”
Other fresh categories that will follow suit include meats and cheeses, as well as sensitive categories such as health care merchandise.
Tier 1 and 2 retailers are in good shape and “have a firm grip on upgrades for hardware, software and downfield applications already set for Jan 1, 2011,” says Honeywell’s Hernandez.
Once technology is in place, retailers are ready to train cashiers, establish pilots and even begin processing DataBars on coupons. This first step is also a good precursor to pilots related to fresh categories, prior to their introduction to the industry in 2014.