The barcode celebrates 60 years as research reveals savings in the UK retail industry of £10.5 billion per annum

This article is brought to you by Retail Technology Review: The barcode celebrates 60 years as research reveals savings in the UK retail industry of £10.5 billion per annum.

Research from GS1 UK, the not for profit global supply chain standards and solutions organisation and Cranfield School of Management, has revealed that barcode use enabled the UK retail industry to save £10.5 billion* last year.

The findings coincide with the 60th anniversary of the registration of the first barcode patent, which was first introduced on October 7, 1952. Over 5 million barcodes are being used around the world to manage shipments, storage, ordering, sales and products. As well as enabling huge cost reductions, since its advent, the bar code has enriched the life of British and global retailers in many ways, including:

• It takes less than a second to scan a barcode, making scanning faster than manual  collection^[1] and is 10,000 times more accurate^[2]
• Barcodes can be used, scanned and understood by anyone, anywhere when using GS1 standards
• Barcodes remove the need to manually apply labels on individual items by automating product identification
• Barcodes provide reduced costs and improved logistics efficiency
• Barcodes are continually being used in innovative ways with consumers using smartphones to check pricing, product information to meet nutritional and allergen requirements, receive location-based promotions, redeem e-vouchers on smartphones and QR codes to access websites, video and marketing material

Gary Lynch, CEO, GS1 UK says, "There's no doubt that the barcode has revolutionised retailing as we know it today. Using our locally licensed, globally reaching unique numbers in barcodes, means that retailers and manufacturers can identify and track items throughout the supply chain accurately, as well as capture essential sales data. These latest figures highlight the importance of standardised processes within modern retailing to help retailers cut costs and run efficient supply chains to improve the customer shopping experience."

"With the increasing ubiquity of smartphones and the software to scan barcodes personally, we are seeing a huge shift in the way barcodes are being used, and can be used in the future. You only need to look as far as the recent innovations by companies like Tesco, which has installed a barcode enabled virtual shopping wall in Gatwick. The virtual shopping wall allows travellers to order shopping essentials for their return from holiday using just their smartphone and Tesco's shopping app which reads the bar codes for the products. The future of the barcode is in consumers' pockets and retailers need to act to take advantage of the opportunities this presents."

GS1 UK manages a global system of unique numbers that enable businesses to manage their supply chain more efficiently through identifying and tracking products globally. Almost all retailers use these GS1 numbers encoded in barcodes. They are also widely used in Electronic Data Interchange (or electronic business messages such as invoices, purchase orders and dispatch notes) and increasingly in RFID tags (radio waves that transmit a unique identification number into a product or person for identification and tracking purposes).

Some interesting facts about barcodes:

• The first ever product to be scanned with a barcode was Wrigley's Juicy Fruit chewing gum in 1974
• The first self-scanning store in the UK was Safeway in Solihull in March 1995
• All barcode numbers issued in Singapore start 888 and those from Korea start 880. Their bar code authorities secured these prefixes because 8 is a lucky number in Chinese culture
• The barcodes on newspapers differ from most others because they include the number of the day in the week as the second from last digit and the week number in a small additional code
• At first wine companies refused to bar code their labels because they claimed the bottles were "table decoration"
• Barcode scanners linked to voice synthesisers are used to help blind people do their shopping. The devices can recognise and name over 40,000 different products
• Barcodes printed red on a white background are invisible to scanners

* The metric used within the report by Cranfield and by GS1 to demonstrate the financial impact of bar codes is from a 2011 GS1 study called "11 billion reasons to say thank you to barcodes". Expressed as a percentage of sales, the research demonstrates the direct, concrete and quantifiable savings and indirect savings from reduction in time at the checkout, fewer errors and the better use of the cashier operators' time.

Using this method whereby direct savings are attributed to be 2.8% and indirect savings 2.89%, the total saving barcodes brings to the retail industry is 5.69% of sales revenue.

ONS data reveal total retail sales in UK (excluding fuel) in 2011 of £303bn. GS1 UK estimates that two thirds of retail sales go through GS1 UK members, equating to ca. £200bn. 92.4% of GS1 UK members mark their products with a GTIN in a bar code (Annual Survey + Global Scorecard Survey). Therefore the value the barcode brings to the retail industry as a whole is £10.5bn (£200bn x 92.4% x 5.69%).

^{[1] Bar codes in Supply Chain Management http://ro.uow.edu.au/cgi/viewcontent.cgi?article=1379&context=infopapers
[2] Monarch Avery: http://www.monarch.averydennison.com/products/documents/Avery%20Dennison%20-%20Why%20Barcode.pdf}