CPGmatters: Will Insufficient Retail Readiness Postpone Next Phase for GS1 DataBar

Discussion
Jun 09, 2009
John Karolefski

By John Karolefski

Through
a special arrangement, presented here for discussion is an excerpt of a
current article from the monthly e-zine, CPGmatters.

The GS1 DataBar may not be ready for prime time.

The next phase for bringing
the revolutionary new barcode on coupons into the marketplace is in danger
of being postponed because a critical mass of retailers is not ready to
scan and process the new format, according to coupon officials.

Plans to implement the
new DataBar called for manufacturers to take
the first step of printing the new DataBar alongside
the original U.P.C.-A bar code on their coupons. Changes to the face of
coupons began January 1 of last year. The U.P.C.-A bar code was scheduled
to be fully retired in January 2010 when all retailers would be scanning
the GS1 DataBar that was to be on coupons by itself.

GS1 US, the custodian
of the implementation guidelines for the DataBar,
has not officially pushed back the implementation date. Jon Mellor, a spokesperson,
said the organization would be "working with the industry" to
determine the next steps.

The potential for postponement
is clearly evident.

"The removal of
the UPC-A barcode in January 2010 would create a significant hardship for
a large number of retailers," said Alan Williams, vice president,
applications development, Ahold Information Services, Ahold USA.

"If they are not
able to scan the GS1 DataBar and process its
content, they basically go back to cashiers having to key-enter the value
of the coupon and entering the manufacturer’s key. This is a significant
challenge for the industry," he said in a presentation at the annual
Industry Coupon Conference hosted by the Association of Coupons Professionals
(ACP) in San Antonio.

"The retailers at
this point in the process are really critical to the implementation of
the DataBar. Until they can read and process
that DataBar, the UPC-A cannot be removed from
the interim coupons now in circulation," he said, adding that the
stumbling block for retailers is the point-of-sale (POS) software and not
the hardware.

The tipping point, he
explained, was the results of a readiness survey of retailers conducted
by GS1 US. Preliminary data from the ongoing survey showed that about two
of three retailers (65 percent) said they would not be ready to process
the DataBar on coupons by January 2010. Responses
came from 26 companies representing 18,000 retail outlets and accounting
for $386 billion in sales.

"This is not a scientific
survey, so view it as directional data," cautioned Mr. Williams who
added that several large, national retailers have not responded yet. On
the positive side, 96 percent of respondents said they know about the DataBar initiative.

While nobody has been
keeping a scorecard, anecdotal evidence suggests that a critical mass of
manufacturers is ready for the GS1 DataBar. In
fact, many have been issuing coupons with the new barcode since January
of last year.

"While I cannot speak for all manufacturers, the majority of our clients
have updated their processes and made the transition to utilizing interim
GS1 DataBar coupon barcodes," said Ken Conrad, vice president
of marketing for Pinpoint Data, a leading expert on barcoding and
family code management for the promotions industry.

Meanwhile, coupon processors have also done their job in the changeover.
They have educated trading partners, updated their processing systems for
the GS1 DataBar, and worked with other processors on one-count file
updates and company prefix challenges.

Discussion Questions: What’s
causing the delay in retailer’s fully implementing the GS1 DataBar?
What repercussions might this have on the industry? What lessons can
be learned for future widescale retail technology implementations?

Please practice The RetailWire Golden Rule when submitting your comments.

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6 Comments on "CPGmatters: Will Insufficient Retail Readiness Postpone Next Phase for GS1 DataBar"


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M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
11 years 11 months ago

Why tiptoe around the elephant in this room? Retailers always expect someone else to pay for any software or equipment upgrades to their systems, including the ability to scan GS1 DataBars. I encountered this during the introduction of random-weight barcodes and the Aztek code. “If you want us to scan YOUR CODES,” retailers told us, “then update our systems.”

Bill Bittner
Guest
Bill Bittner
11 years 11 months ago
I think concerns are a little overblown. There are two aspects to any technology change. There is the data capture change, whether this is record layouts, input forms, or computer screens. In this case it is the DataBar vs the UPC-A. And then there is the software changes to make use of the data changes. As long as the new data format can provide at least the same data as the old method, any additional data can just be “dropped on the floor” until software changes are implemented to use it. In this particular case, I believe all the scanners sold in the US since the late nineties are able to scan the DataBar (originally called the Reduced Space Symbology or RSS). As noted, the challenge is doing something with the new data. DataBar contains the same data as the UPC-A along with additional data that offers more information about the coupon. I think the only problem if record layouts beyond the scanner or POS system have not been modified, will be in the save… Read more »
Bill Bittner
Guest
Bill Bittner
11 years 11 months ago

After a little more investigation, it seems the simplest thing is to simply postpone the removal of UPC-A symbols. Manufacturers are already able to accommodate both, so until retailers are ready to accept the DataBar, the only hardship would be on those manufacturers (generally smaller) who have a manufacturer ID outside number system 0.

Ralph Jacobson
Guest
11 years 11 months ago

When IBM invented the UPC and scanned the first item in 1974, we never thought it would take as many years as it did to get near, but still not fully achieve, 100% penetration on all CPG products. Now we’re wondering why this may take time to implement this technology? There are no secrets here. This involves too many stakeholders in the ecosystem to happen overnight. If the key issues (technology upgrade funding, primarily) can be resolved, we may make this happen in less than ten years. Maybe.

Mark Baum
Guest
Mark Baum
11 years 11 months ago
This is, IMHO, another example of the slow adoption curve that has accompanied most technology enhancements in the CPG/Retail industries. It has hampered or delayed benefits to trading partners over many years. It took almost 15 years after the first package of Wrigley chewing gum was scanned at a Marsh Supermarkets in Indiana — the first bar coded item scanned — for the retail community to reach critical mass on front-end systems to read UPC codes. (I would not be shocked to learn that there are still a couple of independents out there that are still using pricing guns and semi-manual registers for check out.) We have witnessed the same phenomenon (read: problem) with EDI/UCS and more recently with Data-Sync and RFID/EPC. Often, manufacturers gear up (so to speak) and retool packaging, order-to-cash systems, sometimes production lines, etc., in anticipation of retailer demands only to hurry up and wait (sometimes many years) until the retail community crosses the threshold of users to make these investments pay off. The GS1 Databar is just another example. Manufacturers… Read more »
John Morgan
Guest
John Morgan
11 years 10 months ago

It would be ideal to have retailers point-of-sale systems ready to go in January 2010, yet we shouldn’t discount all the hard work that has gone into the transition from concept to planning to the process and the journey to this point if there is a delay. Every milestone to this point has been met, and in the big picture, it would be a small setback if retailers’ point-of-sale systems were not ready and a decision to delay the transition is made.

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