[00:00:00] Welcome to Unpacking the Digital Shelf, where we explore brand manufacturing in the digital age.
[00:00:16] Hey everyone, Peter Crosby here from the Digital Shelf Institute. That little barcode on the box, the engine of every sale? It's getting a huge makeover, one that promises to transform the consumer's shopping journey and their interactions with your brand. All powered by the new GS1 QR code. There's a ton of opportunity packed into that code, and Kerry Morrison, Head of Retail and Marketplaces at GS1, joined Lauren Levack-Gilbert and me to make sure you're getting ready to take advantage of it.
[00:00:46] Kerry, welcome to the podcast. Thank you so much for joining us. Thank you, Peter. Great to be on here. So, I heard word that there was a raucous milestone birthday celebrated at GS1 this year, a 50th birthday for someone very special. The barcode! Was there cake, Kerry?
[00:01:11] You're absolutely right, and we had many cakes. I recall we had a giant cake at our global conference. I love it. I love it. Did you scan it? Unfortunately, no. We couldn't eat it either. It was made up of cardboard. Oh, no! Someone jumped out of it. That was going to be my next question. Did someone jump out of it? That's fantastic.
[00:01:39] Oh, you cats at GS1. You are crazy. But the cool thing is, is that in the barcode's 51st year, there's a lot of change coming, a lot of transformation, really for the next generation of Ms. Barcode. And it's turning it into a QR code. So, Kerry, you are here to tell us what the big change is and why it's so meaningful, impactful. Yeah, absolutely.
[00:02:06] Absolutely. So, I, as you know, work at GS1, GS1 UK. And like you said, we've been around for 50 years, ultimately allowing brands and retailers to trade faster and further.
[00:02:22] We were created for industry, by industry, and we're most famous for the barcode across retail industry, which allows everyone to sell their products and is scanned over 10 billion times per day. So, like I said, the barcode has been around for 50 years.
[00:02:43] And since then, it's been the backbone of global trade, allowing businesses to identify their products through a supply chain, understand quantity of product, location of product, or the specific attributes of that product. Essentially, they trigger the sale to the consumer. So, that reap at the checkout that we all know and love.
[00:03:05] And also, they're the prerequisite of product level analytics that ultimately drive your business's decision making. So, what are we doing now? Guys, this is going to be one of the most exciting transitions within retail this decade. We're moving to the next generation of barcode. Ultimately, combining two of the greatest inventions of all time, product identification with the internet.
[00:03:35] And this is QR powered by GS1. It's going to continue to do everything that the traditional barcode does, and it's going to do so much more than that. Harry, I wish you were more excited about this. It's really amazing. Tell us a little bit more about how that combination is going to power the supply chain. Absolutely.
[00:04:02] So, it's one code that's going to work harder within supply chains. Through using the QR code, not only will the product identifier sit in that code. Brands have also got the potential to add more data in there, such as a batch or a lot number or an expiry day, which we're seeing is hugely effective in preventing sale of out-of-date stock going to consumers,
[00:04:29] or assisting in recalls by preventing recalled stock from ever entering households. So, this is absolutely huge. But I think the most exciting thing about the next generation of barcode is they're going to allow brands to connect directly with their consumers through every product placed on the market.
[00:04:52] And this has got huge implications for driving revenue, enriching consumer engagement, evolving digital strategy, and collecting some really rich first-party consumer data for brands. Yeah, Carrie, I mean, that's really exciting. And I feel like the QR code got a bit of an amazing rebrand around COVID, right? Because everything was, don't touch the menu, scan the QR code.
[00:05:21] And now everybody is way more used to doing that. So, I think it's exciting to grab a product and then scan the QR code. And I think what's even more exciting to your point is then every product is a media channel, right? Because the brand can put a website behind the QR code, can message to the consumer, collect that first-party data. So, tell us what you're seeing some brands really kind of include. Yeah, absolutely, Lauren.
[00:05:50] I think what's amazing about this is it's one code. And like you said, it can do so many things. So, it's got the identifier in there. It's going to go beep at the checkout. But then through that identifier and combining it with the internet, you can be linking consumers to always-on information about specifically that product and anything else you want to share. So, we've done quite a lot of research with industry on this.
[00:06:18] We've seen 57% of businesses see loyalty, discount, and promotions as the biggest opportunity here. So, that's going to be around driving revenue for those businesses. And this has also been ranked as number one for consumers, no surprise. And the idea that they can get more through products, the idea they may get offers and discounts through those scans are hugely enticing.
[00:06:46] And imagine for brands a world where you can use your best sellers to link consumers to rest range, innovations, seasonal variants, or even tell consumers where your product's sold or link them straight to buy it. And we're seeing this as a huge hook for those smaller brands that are taking a digital-first approach to their business strategy.
[00:07:12] So, that's some ways brands can drive revenue through next generation of barcodes. We're also seeing being able to get information to consumers as really crucial. So, we're living in a self-serve world where consumers will do more themselves. They will access their pensions themselves, do online banking, book their own holidays, be their own travel advisors. And it's the same with product, really.
[00:07:37] What we're seeing from an accessibility point is that at least 10 consumers can't read back of back and many more struggle with that due to what's written on there might be quite small or in a certain font or a color. It's really difficult. Now, imagine if you are suffering from a severe allergy or you're shopping for someone that suffers from a severe allergy. That's information you need to know right there at point of purchase.
[00:08:06] So, wouldn't it be brilliant if consumers could access that information quickly, instantly, seamlessly, and digitally? I personally would love that as someone who's gluten-free, dairy-free. You have to scan every single line and there's no standardization because everybody calls it either wheat or gluten or whatever.
[00:08:30] So, I think that will be a game changer for allergies and even like nut allergies and things like that, that it'll be easier to just click and include that. As long as the brand includes the right information because the data still has to be there. Yeah, for sure. For sure. And we imagine this would be the same as getting information on back of Pat where the data would come from, the PIM systems, the product master data, and would flow through digitally as well.
[00:08:56] What we're also seeing is there's a lot of demand for consumers around additional information. So, we're actually having conversations right now with government around access to clearer health information, micro nutritionals, and giving consumers real details around, well, what's in this product? Why is it good for me? And what will it do?
[00:09:21] So, we're seeing a rise in protein and gut health with consumers looking to purchase more of these products. But it's not always clear why these products are healthy. What's the impact? What's the best time to consume these products to see the impact? And what can I expect to see as a loyal consumer of these products? And there's a lot of apps right now, Carrie. I was actually just reading an article right before this podcast around all the different apps that you can use to scan the QR codes.
[00:09:50] There's like Yuka. There's the EWG to look at more sustainable ingredients. But it would be great if you can just scan the QR code and get that information because there's definitely a need and desire, I think, especially with the rise of like micro plastics and parabens and crazy ingredients. So, I could see brands really using that to try and drive value for their specific products. Have you seen that? For sure. For sure.
[00:10:19] And I think that instructional is a really key point, Lauren. So, we're seeing the rise of air fryers across consumer households. And that really ties into, you know, cost saving, efficiency saving within households. But most brands aren't communicating things like air fryer instruction on packaging. One, because they don't want to do a whole redesign or that's not on the plan yet. And two, there might not be space on pack.
[00:10:45] And that can lead to consumers choosing another product or, you know, moving away from that brand or category. So, we see there's so many essentials for consumer engagement through information on pack that's just not there already. Harry, when you think about these landing pages that are going to be accessed from the QR code, do you have a sense of how? Because if you're talking about promotions and things like that, that's often retailer specific.
[00:11:15] Sometimes even like store location specific, right? And so, it seems like the opportunity here is huge. But also, the content creation burden will also, it sounds like, be pretty high. And I'm wondering if you've got a sense of where this work will be happening. Is it happening in shopper marketing? Is it happening in e-commerce? Do you have a sense of how that's going to be handled?
[00:11:45] For sure. So, we're seeing this as a collaboration between a number of departments. Shopper marketing, e-commerce, brand marketing, absolutely. What we've seen over the last couple of years is through the rise in e-commerce, we're seeing digital teams be ever more aligned with departments across branded manufacturers.
[00:12:08] So, they're probably the ones that will be sitting on a wealth of this content in line with those in brand marketing and also those in commercial. So, we're seeing this as a huge opportunity for brands to repurpose a lot of the content that they already have. And channel that in a way to consumers that's always on, always accessible and very, very easy to change.
[00:12:36] So, from the conversations we're having, once brands are starting to test and learn this, they're actually seeing more of an opportunity as opposed to a burden. And I think from being able to really prove that marketing material is working, that consumers are viewing it, that ROIs are so much clearer through next-gen barcodes than through, for example, you know,
[00:13:05] just putting content out there and, you know, not really understanding what the full funnel on it is looking like. Yeah, it seems like it's a perfect opportunity for conversational commerce, because most likely if a consumer is doing that, they either want the coupon, which is totally understandable, or they have questions. And so, even at least, you know, there's just me talking out of my whatever. But it does seem like it's a place where that's where agents could be really helpful
[00:13:35] to drive the most personalized experience for the consumer that's accessing the data that sits behind that conversation. So, it'll be interesting to see. I don't know if you've seen any of that happening yet, but I think that might be the best experience for the consumer and will drive more conversion as well, I think. So, we're seeing a lot of conversation around, you know, how can we leverage this to get direct consumer feedback,
[00:14:01] whether that be things like asking them to fill out a quick poll or a survey or contact directly the teams in relation to that product. So, certainly within the furniture sector and the electronics sector, we're having conversations with big brands that are very interested in using things like chatbots through this
[00:14:25] to provide really good customer service at product level because they will know from the scan exactly what product that consumer is interacting with and be able to provide a much clearer service versus through a traditional call center. Well, why don't we jump to the sort of brand examples that you've been seeing? Because I think that would be really helpful for our audience. Absolutely.
[00:14:51] So, a couple of examples of what we've seen out there in the market so far with brands that we're partnering with, either at UK or globally. Accessibility is really coming through across some big players. Unilever being a really key example of this, who sort of went first and used next generation of barcode to drive those accessibility benefits for everyone.
[00:15:19] So, this was looking at consumers with sight difficulties, reading information back of pack, but then also an element of language accessibility as well. So, the understanding that not everyone buying your product, particularly if it's a small product, will have the same language. So, making or giving consumers options to surface that data in different languages through scanning on back of pack.
[00:15:48] And I think that helped save the trouble of, you know, downloading a language app, aiming at the packaging, and then hoping for the best. So, a real move forward. And that started to segue into, I guess, further exploration of consumer engagement. And that was generally around linking consumers to rest of range and recipe inspiration as well.
[00:16:15] Making sure that consumers are using more of that product and being inspired to repeat purchase. As someone who has to travel with a gluten-free allergy, I vote yes to this, because I do have to pull out my translation app and translate every word on the packaging. So, I think this could be really, really exciting. For sure. And I think that instant trust and clarity, because you're getting that information straight from the brand,
[00:16:45] as opposed to through either a translation or an app, is really crucial for those consumers. We are seeing as well, so one of the brands we were on stage with yesterday, actually, in the UK, a company called Bayer that deals with and manufactures healthcare and well-being products to consumers.
[00:17:10] Again, began with accessibility and then started moving quite quickly into that first-party consumer data collection. Bayer saying, you know, nothing shows intent to purchase like someone scanning your product, because they've got it, they've got it in their hand. And once you can start building a picture of those consumers, you can start to understand what's working and what should be offered to consumers.
[00:17:39] They saw, you know, through using a clear call to action on their products, they were seeing a 37% scan rate, which I thought was incredible, because the industry standard is 1.1%. Absolutely incredible. And they were using... Sorry, I was just wondering if you knew what the call to action was. What made it so strong? Do you remember what it was, by any chance? I know I'm...
[00:18:06] So it was aligned to health and well-being. I can't remember exactly what it was. No, that's fine. I was just wondering whether it was promotion-related, or it was that kind of more sort of almost emotional connection with the consumer. Emotional in usage. Absolutely. Absolutely. And they worked that all the way through their campaigns, through pre-purchase campaign, all the way to post-purchase campaigns,
[00:18:34] depending on the nature of the product and the category. So examples are around really showing the benefits of certain vitamins and the application of products as well, coming through as something that consumers are interested in. So where do I consume it? How do I consume it? And with what? What else? Any retailer brands that...
[00:19:02] Oh, retailers are very, very interesting. So I'd say the first retailer to really move on this was Woolworths in Australia. And what they were looking to do was save on waste. So by encoding the sell-by date and product identifier in that same code, they were able to make a 40% reduction in waste, which is incredible.
[00:19:30] So they were able to manage their inventory according to product and shelf life. And they were able to drive an increase or to save 21% productivity within their retail stores. So they really led the way within retail. We're seeing one of the largest UK supermarkets, Tesco, pilot this in the UK.
[00:19:55] And again, they're looking at food waste, driving efficiency, and very important for retailers, avoiding fines from selling out-of-date stock to consumers. Now, these can run into tens of millions of pounds annually. So this is a huge deal because it takes cost out and it also increases consumer safety. So probably everyone else, sorry, I just wanted to ask probably everyone else who's listening might know the answer.
[00:20:25] But can you just explain a little bit more how the QR code leads to the reduction in waste? They're throwing away less price. I'm just wondering because, yeah, sorry, I don't quite make the link. Absolutely, Peter. So imagine you've got a whole chicken, right, as the product. Say you've got 50 of them in store at the moment.
[00:20:50] You don't know if those 50 are going out of date tomorrow, in which case, if you're not aware of that, if you've not got people looking and tracking that as individuals, colleagues going around the shelves in store, that could be a substantial wastage cost. And then once those are wasted the next day, you don't have any stock on shelf. So again, loss of sales.
[00:21:18] Whereas if you know how many of a product you've got at which shelf life, you've got a much better chance of managing any sort of dated stock issues before they become critical. And you've got a much better chance of managing your inventory in terms of reordering. Thank you for helping me catch up to the rest of the audience. Thank you. No worries, Peter. I think my favorite example has got to be the one from one of our UK online retailers, Ocado.
[00:21:48] So they've been rolling out next generation barcodes for about the last two years now. They're on almost 700 products within their range. And what they've been doing is they've been looking at sustainability. They have been helping consumers behave sustainably with the products we buy. And of course, you know, in every market, food waste and domestic households is a substantial issue,
[00:22:17] really bad issue. And it impacts the environment. It impacts carbon impact. And it also impacts consumer household cost. So what Ocado have been doing is they've been educating consumers on how to store the products and use the products so that much more of the product gets used. And they're also promoting circularity.
[00:22:39] So really educating consumers on how to sort packaging, how to recycle the packaging within household infrastructure. And they've seen some fantastic results that have been shared far and wide. They've also moved into consumer engagement. And they found that, you know, from the many products that have QR codes on them,
[00:23:02] when consumers are scanning them, they're on average dwelling for about 30 seconds on the product landing pages, which is just an incredible result. Yeah, getting 30 seconds of the consumer's time is, that's something. Yeah. Because we're all goldfish. We have five second attention. That's fantastic. So, Carrie, what does this really mean for all the data that the brands are collecting? Right. We talked about, you have first party data, you can provide information, you can provide language.
[00:23:31] Like, how are you seeing, what are you seeing them collect? And how are you seeing them use that data? So, we're seeing no matter how brands start their journey on next generation barcodes, they quickly move into a data collection because the data is there and it is an absolute goldmine, first party consumer data. So, what brands are looking to do, and it varies according to the brand or according to the use cage,
[00:23:56] but essentially they want to know where the consumers are scanning, when the consumers are scanning, so they can start making decisions around, do they want to have certain messages in the evening? Do they want to have certain messages in the morning? Depending on, you know, what category that product falls into. Is it an ingredient for dinner time? Or is it something that can be enjoyed on the go?
[00:24:21] They want to see what their consumers are specifically engaging with, and they want to build on that. So, we've had some great examples where brands have started off providing content, and they found out quite quickly, oh, consumers are really interested in instructional videos on how to apply, you know, this mascara or these eyelash extensions. Okay, so let's replicate that across the rest of our range,
[00:24:50] so that our consumers know what to do with our products, and hopefully they become loyal consumers and they rebuy. And you can put that on your PDP, right? So, like, it should be on then every channel because you're understanding how the consumer buys, so that can flow through every touchpoint, social, PDP, branded website, DTC, all of that. Exactly, exactly. And I think that loyalty is key as well.
[00:25:16] What we've also seen is a couple of brands start really pushing a loyalty or a subscription model. So, consumers scanning it, they're a bit more engaged, so that they've clicked on a couple of tiles, they've navigated sort of around the landing page, and then pop up, would you like to join our mailing list? Or would you like to, you know, be sent more inspiration around whether it's a usage or a recipe or whatever?
[00:25:47] And then they've got the consumer data. They've got an email address. They can be contacting consumers. But then I think there's also been feedback on, you know, we don't want to do that with every consumer, so we're going to set up some hurdles around, okay, they've clicked on five tiles, right? They've dwelled for at least a minute. So, we know they're probably going to be more likely to want to interact with us. It's like an always-on focus group. Yeah. Really. It could be.
[00:26:15] The potential, yeah. We're seeing other brands get quite smart about this. So, they want to understand behavioral data. They're asking consumers for feedback. I go back to the sustainability example. We've seen examples like this be used with government, where brands have said, look, my consumers are scanning this and they're looking at their recycling instructions and X percentage of them are clicking on, I have recycled my product as you've shown me.
[00:26:43] And they're using that to show that they're meeting their ESG targets as a business. They're taking finger on the pulse with consumers. Do you like this product? What would you change about this product? And then there's also the opportunity to do A-B market testing. So, showing different types of content and then seeing what's most popular, what's getting the most engagement, the most click-throughs, dwell time, etc.
[00:27:12] Another thing that we're seeing as well is the interaction with other KPIs. So, is this driving traffic onto my social channels? Is this driving more traffic onto my website? Are my sales going up through direct-to-consumer or Amazon? And brands can test all of this in real time. It's incredible. So, Kerry, when you think about...
[00:27:41] Because you've been walking us through some of these specific brand examples, which I assume are sort of some early adopters that are getting in early and working in partnership with you and all of that, right? For the vast majority of brands, where do you think they are in their journey in comprehending what this is, what the opportunity is, what the work is around it? Like, where are people at in sort of the maturity curve getting ready for this?
[00:28:08] So, honestly, Peter, they're in the early stages, the early stages. A lot of people still don't know this is coming. And we are actively, as a federation, trying to excite industry about the potential of the next generation of barcodes and what they can do today with the identifiers they already have. So, we're trying to get them on that journey. We're trying to raise awareness across the retail industry.
[00:28:37] And we're trying to help industry get started in line with what they want to do. And we appreciate that at every company, that might be different. And is there some sort of looming deadline or something that is on the horizon that might be pushing adoption at some point? Or is it... Yeah, what's the... I don't know. Is it the carrot or the stick? I guess that's the stick.
[00:29:05] So, we're seeing a couple of things, actually. So, first, which our listeners might have heard about is the Horizon 2027. So, this is a date, a global date, by which time the vast majority of retail scanners will be able to read and process these codes. And they can read them. Most of them can read them already. It's that processing bit.
[00:29:31] So, being able to see the QR code and then pick out the necessary data to go beep that we're still doing. A lot of industry is still doing the final touches too. But we're just about there. And then in terms of... You mentioned the stick. In terms of the stick, what we're hearing from industry is regulatory pressure. So, brands are being asked to declare more information on pack, on more products across wider territories.
[00:30:01] And without doing this digitally, it's very hard to see how that's going to happen. So, we are having discussions around things like digital product passports, which are huge in Europe, which means, again, brands have got to declare sustainability information to not just consumers, but other actors along the supply chain, such as a reprocessor or a recycler or a reseller. And that just can't be done without next generation of barcodes.
[00:30:31] So, that's what we're seeing across the market. All right. So, now, everyone listening to this podcast, their ears are now perked up. They understand the opportunities and a bit of what the work is. What are some ways in which they can get more information or learn how they can transition over to the next 50 years of barcode? So, what brands can do today is research online and then reach out to your local GS1.
[00:30:59] So, for anyone that's hearing about this for the first time, have a look online at Google GS1 QR and you can read a bit more around what's happening, some of the case studies, and a lot more detail around some of the guides. But I'd say reach out to your local GS1. We operate in 118 countries and we are absolutely here to help. We think this is going to be one of the most exciting transitions
[00:31:28] within retail this decade. So, great opportunity for brands to get started on this. And what I'd do if I was a brand or a retailer is I'd be thinking, you know, what's my business case, right? What do I want to do? What am I trying to drive? What bits of my range do I want to focus on first? And there's absolutely no one that's done all at once. Everyone that's been on this journey has started somewhere. So, is it seasonal brands?
[00:31:58] Is it innovation? Is it your best sellers? Is it products that are moving onto a different packaging or having a packaging revamp? Have a think about that. And then get going. All right. So, work with us. Work with GS1 UK. And test and learn. So, everyone that started on this journey with us, they're doing a lot of tests and learning and they are getting so much insight
[00:32:26] that's really driving and shaping, you know, elements of their business that they might not even thought would be shaped by this. Whether that is sustainability, whether it is new types of brand marketing involving things like AI and consumer experience. There's just so much possibility. But think about where you want to start first. That's super exciting. I will be at GS1 Connect in the US.
[00:32:56] And so, I want to see what the buzz is and have conversations with customers about it. It will be a lot of fun. And you were just at a conference, it sounds like yesterday, where they were discussing some of these case studies. What was the energy after these case studies? What did you feel while you were there as some of this information was being rolled out? I think people were really excited, Peter. It was very much...
[00:33:24] So, we had one event was all around connecting to consumer and first-party consumer data. One was all around sustainability and also in line with the consumer, both information to the consumer and behavioral change. And what I was feeling was a real energy around, you know, this could be what's going to drive the next big thing for us in our business or this is going to be the thing that allows us to tackle or overcome or get ahead of,
[00:33:54] you know, a bit of legislation or, you know, the bigger environmental challenges we're all facing into. Well, super exciting. Carrie, thank you so much for bringing all this knowledge to us and sharing this to get our listeners, their mindsets going and thinking about how to take advantage of this opportunity and what their path forward will be. So, happy birthday to Barcode and excited about the next 50 years.
[00:34:23] Thank you so much for joining us. Thank you very much. Thanks again to Carrie for bringing all the info on the next generation of the Barcode. Things are moving so fast these days. Keep up with it all by becoming a member of the DSI at digitalshelfinstitute.org. Thanks for being part of our community.