In June of 1974, the first barcode was scanned on a pack of Wrigley’s chewing gum, marking a significant milestone in retail technology. Fast forward 50 years, and we find ourselves at a pivotal juncture where the traditional barcode is giving way to something more powerful. The surge in demand for data access and product information—driven by factors such as mitigating supply chain disruptions, enhancing consumer safety and engagement, and promoting sustainable practices—has necessitated a change in solution.
Enter two-dimensional (2D) barcodes, such as QR codes, poised to revolutionize the retail landscape by bridging the gap between data requirements and existing barcode limitations. These advanced barcodes can hold more data and can be web resolvable (or connected to online information) with GS1 Digital Link. As such, 2D barcodes can provide consumers and key stakeholders with more of the information they need, precisely when they need it. See Figure 1 for a comparison of one-dimensional (1D) versus 2D barcodes.
Industry leaders have set a decisive date for the transition to accepting 2D barcodes at point of sale (POS)—an initiative known as Sunrise 2027. This shift couldn't come at a more critical time as the demands for greater product information transparency, traceability, and authentication continues to soar. Yet, this transition isn't merely about adopting a new technology; it's about embracing a paradigm shift towards greater efficiency, sustainability, and consumer empowerment.
What to know about 2D
Supply chain visibility has become paramount in today's volatile landscape. In the past year alone, major disruptions in the Red Sea and Panama Canal upended supply chains. Changing shipping lanes to ensure supply continuity during a crisis isn’t simple—and it’s not as easy as waiting for a disruption to end. Often, interruptions to the flow of supply chains can take weeks, even months to straighten out, time that retailers don’t have to spare.
One key benefit of the 2D barcode is its capacity to carry an identifier that is more granular than traditional barcodes, allowing for more precise visibility. A single scan can unlock a treasure trove of information, from nutritional details to sustainability and sourcing data as well as the path a product took to get to the consumer. The GS1 Digital Link Standard enhances this capability by ensuring every product can connect to the web, be smartphone-interactive, and still transact with POS systems. The added functionality provided by this technology gives companies the intel they need to respond to disruptions and make the right decisions about inventory management, stock levels, and more. For example, a retailer can use a fixed or hand-held scanner to request production and manufacturing information for a specific product by scanning a 2D carrier with GS1 Digital Link on a pallet in a warehouse. This provides a more precise management of inventory stock rotation while maximizing first in, first out (FIFO) and minimizing waste.
2D barcodes also serve as a vital tool for ensuring consumer safety by providing essential details such as batch/lot numbers and expiration dates to key supply chain stakeholders. This added layer of information can help companies and consumers swiftly identify a product that has been recalled or expired and take the proper steps to dispose of it. Since manufacturers frequently bear the full burden of recall costs, proactive measures to mitigate risks and ensure product quality isn’t just a safety imperative, it’s a financial one.
Similarly, 2D barcodes can provide consumers with clear, easy-to-access information that enables them to make more informed choices that align with their preferences and values. Consumers’ growing preference for having more information about the products they are purchasing is a major driver for the implementation of 2D barcodes. For example, a recent study from the global consultancy firm Simon Kucher found that 66% of consumers rank sustainability as a top consideration when they make a purchase decision. With 2D, a shopper could simply scan a package code to view information on its recyclability or access further reading about a company’s sustainability efforts before purchasing.
To meet the demands of an increasingly discerning consumer base and increasingly volatile supply chains, companies need greater product information transparency, traceability, and authentication. The shift to 2D represents a significant step forward in responding to both of these needs.
What to know about Sunrise 2027
The journey towards Sunrise 2027 demands collaboration and coordination among stakeholders across the value chain. At the heart of this technological shift lies the Global Trade Item Number (GTIN). The GTIN and the barcodes that carry the GTIN serve as the foundation for price lookup systems. In the move to 2D, there are necessary upgrades to ensure compatibility across systems for both brands and retailers.
Brands or suppliers will spearhead this evolution by increasingly labeling their products with 2D barcodes. Many brands have already begun marking products with a QR code to engage with their consumers. Those brands have a head start on the requirements for 2027 and are already beginning to replace a proprietary URL with a GS1 Digital Link, which makes that QR code capable of enabling consumer engagement, supply chain processes, and inventory management as well as the “beep” at checkout. We expect to see more brands move to 2D barcodes in the next 18 months to 24 months leading up to 2027.
Retailers must also adapt to ensure they have the ability not only to scan 2D barcodes but also to effectively interpret and utilize the data embedded within them. It is likely retailers will phase their implementations. The requirement for 2027 is for their scanners to have the capability to read a 2D barcode (such as a QR, Data Matrix, or GS1 Data Matrix barcode), extract the GTIN, serve it up to their PLU (price look-up) file, and return all of the information needed at checkout. This will first require optical, camera-based scanners. Additionally, depending on the scanner make and model, a firmware update from their scanner manufacturer may be necessary. If retailers are planning any type of hardware upgrades, they should ensure their solution choice is “2027 capable.” As retailers move to leveraging additional data (such as lot number, expiration dates, and serial number) that may be included depending on the product type and feasibility, they will need to update their POS host or other store systems to support these new use cases.
A successful transition to 2D barcodes requires retailers to embark on a journey of digital transformation. As this transition progresses, collaborative efforts and continued innovation will be key in realizing the full potential of 2D barcodes in enhancing the retail experience.
Transitioning to 2D
Pioneering brands like Puma SE and Procter & Gamble Co. have already integrated 2D barcodes into their operations, leveraging the technology to deliver enhanced consumer experiences. Puma, known for its innovation, has adopted 2D barcodes in part to enrich the shopping experience in its flagship store in New York City. By utilizing radio-frequency identification (RFID) alongside 2D barcodes at the point of sale, Puma ensures efficient loss prevention measures while simultaneously offering customers an augmented reality experience that tells the story of the shoe or other product being sold. Similarly, P&G has embraced 2D barcodes to provide consumers with comprehensive product information, ranging from nutritional details to recycling guidelines, promotions, and more.
As the transition to 2D barcodes gains momentum, it's crucial to recognize that 1D barcodes are not disappearing overnight. Retailer systems are gearing up to handle both 1D and 2D barcodes, such as UPC-A, during this transitional phase. Hangtags and packaging may feature both types of barcodes for a period. Understanding your company's technical capabilities is paramount in navigating the journey toward 2D adoption.
To get started, consider where you are now and where you want to go. Determine what you need to reach a successful pilot phase. Retailers should envision the potential use cases facilitated by 2D barcodes, evaluate their current technical infrastructure, and collaborate across departments to ensure alignment. Brands, manufacturers, and suppliers need to unite, bringing together supply chain and marketing executives to devise a cohesive barcode strategy that addresses both consumer engagement and supply chain efficiency concerns. If you’re unsure where to begin, search for a GS1-provided resource to help jumpstart your adoption journey.
50 years later, the future is here
As we approach the 50th anniversary of the first barcode scan in 2024, we are witnessing its evolution into 2D barcode technology. Sunrise 2027 marks a significant step towards a hyper-interconnected world, fostering deeper engagement between brands and consumers.
The era of 2D barcodes heralds a new dawn for retail, characterized by enhanced transparency, efficiency, and consumer empowerment. As industry leaders embrace this transformation, the possibilities for innovation and growth are boundless, propelling the retail sector into a dynamic and digitally driven future.
