How 2D Barcodes Are Changing the Packaging Game

GS1 has established the Sunrise 2027 initiative, which aims to have all retail backend systems and point-of-sale (POS) infrastructures set up to accept two-dimensional (2D) barcodes by 2027. © mtrlin – stockadobe.com

The Transition to Next Generation Barcodes

By Devna Dayal from Matthews Marking Systems, with Steven Keddie senior director of GS1 standards 

The familiar linear barcode we’ve used for five decades is in transition. It’s had a good run, revolutionizing supply chains and retail processes. But the pressures for data to support the need to track and trace goods with more accuracy, the increasing use of automated systems in warehouses and factories and consumer demand for in-depth product information have all exposed the major limitations of the linear barcode.

With a limit of eight to 14 digits, linear barcodes simply lack the data capacity for robust traceability, inventory management, automation and product information. And, if the barcode is distorted or damaged in any way, laser scanners may not be able to read it accurately, potentially resulting in untraceable, discarded or returned goods.

These are among the many reasons the use of two-dimensional (2D) barcodes is on the rise. This transition is being led by GS1, the global standards organization for barcodes and administrator of the Universal Product Code (UPC) and European Article Number (EAN) barcodes. According to GS1, 2D barcodes will provide a globally recognized and standardized way to enable “improved inventory management, enhanced recall readiness, greater sustainability and ethical sourcing, better product authentication, and greater brand trust.”

So what’s the hold up? In addition to the additional complexity represented by 2D barcodes, laser scanners designed for linear barcodes cannot read 2D barcodes. This means the entire retail infrastructure must be updated to 2D-capable optical scanning equipment before a full 2D transition will be possible. Fortunately, the retail industry has already been moving to 2D optical scanners and it’s estimated that over 80% of the industry is 2D capable.

Making the transition to 2D barcodes

The transition to 2D barcodes will unlock exciting new use cases and bring much-needed improvements to supply chain efficiency and traceability. To support and accelerate this transition, GS1 has established the Sunrise 2027 initiative, which aims to have all retail backend systems and point-of-sale (POS) infrastructures set up to accept 2D barcodes by 2027.

To learn more about the upcoming retail transition to 2D barcodes and the latest developments in barcode standards, I sat down with Steven Keddie, senior director of GS1 standards and the GS1 portfolio of automatic identification and data capture technologies. Here are the highlights of our conversation.

What is driving the shift to 2D barcodes?

Everyone wants to know more about products, including consumers, brand owners, retailers and regulators. And, as a result, everyone is looking for better ways to access information about a product by scanning a code on its packaging.

This is why we developed the GS1 Digital Link URI syntax embedded in a 2D barcode (such as a QR Code) that enables both consumer and supply chain stakeholders to access unlimited brand-authorized data about products, while also supporting point-of-sale (POS) transactions.

What progress has been made toward helping the industry make the shift to 2D barcodes? Can you provide us with some examples?

Globally, the retail industry has been piloting and implementing 2D barcodes, QR Codes with GS1 Digital Link Uniform Resource Identifier (URI) or GS1 DataMatrix. Some of the world’s biggest brands are beginning to leverage QR Codes powered by GS1 on their products for consumer engagement and pilots are happening in retail environments in almost every region.

North America: Some of the earliest adopters in North America have been in the apparel and cannabis industries.

Brazil: The first retailer to adopt and scan a QR Code with GS1 Digital Link URI was Parla Deli, a Brazilian gourmet shop.

Australia: Australia’s largest retailer has more than 9 million fresh food products scanned with 2D per day in their store.

China: In Asia generally, the migration to 2D is accelerating. The largest implementation, by volume, is happening in Zhejiang province in China, where more than 67,000 companies are implementing QR Codes with GS1 Digital Link URI. Over 5,000 stores are now scanning 2D barcodes, and approximately 200 million consumers there are scanning with their smartphones.

What are some of the use cases for QR Codes and Data Matrix barcodes with the new GS1 Digital Link standard?

The main opportunities for 2D use cases include:

• Granular inventory management: Items can be managed by expiration date to ensure freshness and reduce waste.
• Sustainability: Recycling information and waste prevention.
• Traceability: Sourcing information for ingredients.
• Consumer engagement:Consumers can scan packages with their smartphones to download an instruction manual or access a how-to video, view allergen information and so much more.
• Safety:Better recall management, such as surgical recall of lettuce and other produce by only the affected batch/lot.
• Improved packaging: Reduction of the number of barcodes on a package, thus freeing up real estate on packaging and reducing confusion by stores and consumers on what should be scanned.

Each use case can unlock other opportunities. For example, by adding and capturing the expiration date in a 2D barcode the retailer now tracks the freshness of all perishable products (e.g., vegetables, prepared meals, meat, fish, etc.) from the moment they enter the store until they are sold at the point of sale.

This capability can then unlock automatic price markdowns based on product freshness, free up retail staff to focus on customers instead of auditing expiration dates on shelves, capture expired products at the point of sale (consumer safety), and so much more.

Expect to see 2D barcodes appear more frequently on your inkjet print controllers as retail adoption of the next generation barcodes expands. Image courtesy of Matthews Marking Systems.

How will the shift to 2D barcodes bring deeper changes within the supply chain and, specifically, the packaging industry?

One of the most immediate changes for the packaging industry relates to the printing and marking solutions in use for product and primary packaging. These are very dependent on the application. Most brand manufacturers of consumer products might only need their domain name and Global Trade Identification Number (GTIN) in a 2D barcode and therefore can quickly add it to their packaging artwork before production.

Other brand manufacturers may want their packaging to have more granular data like batch/lot, manufacturing date and serial numbers in addition to their domain name and GTIN. This is known as dynamic data, and it is usually printed on the production line. Today this data may already be printed as text, but adding the data into a 2D barcode unlocks new opportunities for the brands, retailers and the consumers. Brand manufacturers and packagers will need to work with their printing and coding solution provider to see if their current printing technology can do the job or if any changes must be made.

Marking and coding tech steps up

Printing 2D barcodes on high-speed production lines and on curved surfaces has challenged the printing and coding industry for years. Several providers of marking and coding equipment are developing solutions that go beyond their existing portfolio to keep up with fast line speed and still produce high-quality 2D barcodes. Accommodating the size, resolutions and quality requirements, and matrix structure of 2D barcodes is what’s driving the need for innovation and new solutions.

To be sure, there are now solutions available for the vast majority of brand manufacturers’ 2D barcode printing needs. In addition to the label and thermal transfer film printers, solutions such as laser, long-throw thermal inkjet (TIJ), piezo inkjet (PIJ), and drop-on-demand (DOD) valvejet can now be viable coding options.

While keeping a keen eye on future innovations, the time to jump ahead of the competition, build brand loyalty and delight customers with rich product and brand information delivered via the tech-friendly 2D barcode has arrived.

About the Author

Devna Dayal is director of marketing at Matthews Marking Systems, a leading supplier of coding and marking equipment. She has extensive packaging industry experience in marketing and consulting roles with Matthews Australasia and Foodmach.

Steven Keddie is the senior director of GS1 standards and the GS1 portfolio of automatic identification and data capture technologies. Learn about Sunrise 2027 at www.gs1us.org.