This year marks a major milestone in retail supply chain technology: the 50th anniversary of the very first retail barcode scan. On June 26, 1974, the first Universal Product Code (UPC) was scanned on a pack of Wrigley's Juicy Fruit gum at a grocery store in Troy, Ohio. 

Scanning items at self-checkout might not feel extraordinary today, but that first scan transformed retail forever. It ignited a wave of innovation that revolutionized the ways we manage, move and sell products globally. 

But demand progressed quickly, too. Retailers and consumers raised expectations for speed and accuracy, and as retail operations became increasingly complex and interconnected, the need arose for more advanced tools solutions for serialized data capture. 

That’s where serialized data carriers like the 2D barcode and radio frequency identification (RFID) come into play. Today, retailers can achieve real-time inventory visibility of inventory and product in transit, and ensure on-shelf availability for omnichannel fulfillment.

Increasingly, retailers are using 2D barcodes to provide customers with detailed product information, instant access to product reviews, promotional offers and integrated marketing campaigns. While most retailers aren’t currently using 2D barcodes at point-of-sale, industry leaders such as Target, Patagonia and Dillard’s have been incorporating them into their operations, with plans to expand their use.

Achieving Inventory Insight

RFID’s capabilities make it possible to automate data capture, which is particularly valuable in high-volume environments such as warehouses, distribution centers and retail stores, where manual inventory tracking can be labor intensive and error-prone.

RFID enables fast, accurate and automated inventory counts without the need for line-of-sight scanning, allowing retailers to reduce labor cost and human error, keep store shelves fully replenished, verify inbound and outbound shipments at the dock door, and easily share data with suppliers and trading partners. 

Additionally, serialized data methods support compliance with regulations such as the Food and Drug Administration’s Food Safety Modernization Act (FSMA), by helping stakeholders throughout the food chain comply with traceability and reporting requirements, while responding quickly and effectively to product recalls or safety concerns.

Operationalizing the Omnichannel

Retailers continue to fulfill orders from multiple channels, including online, in-store, and buy-online-pickup-in-store (BOPIS). RFID and 2D barcodes provide the item-level visibility needed to accurately track and manage inventory across every location, in real time.

Utilizing serialized scanning at point of sale, retailers can validate that items were sold —not stolen, or purchased from counterfeiters — to minimize issues like returns fraud and gray-market diversion. Additionally, RFID readers at store exits can detect and validate point-of-sale transactions to confirm that those serialized items were in fact legitimately purchased.

Top retailers have reported impressive results. Walmart, Nordstrom and Dillard’s are among those to have seen significant improvements in inventory accuracy, faster cycle counts and reductions in out-of-stock inventory. Their gains have been so compelling that many have been moved to mandate RFID source-tagging of products by suppliers. 

RFID and 2D barcodes deliver benefits to consumers as well. They support seamless self-checkout experiences, allowing shoppers to scan their own purchases quickly and easily, and bypass checkout lines.

2D barcodes have created new opportunities for customer engagement. QR codes on product packaging enable consumers to access detailed product information, promotional offers and more, all with the scan of a smartphone camera.

A Blueprint for Integration 

The next wave of supply chain innovation is already here, and organizations will need to adapt. As RFID costs continue to fall and the technology evolves, more retailers will adopt these tools and capture market share. 

Following are some steps that organizations should take to prepare for 2D barcodes and RFID.

• Gather a cross-functional team. The supply chain impacts every department in your organization—from purchasing and marketing to finance and IT—so it’s essential to have each perspective included in your technology plan and roll out. The goal is to ensure connection and communication so that your team is aligned, and information can move seamlessly across the organization. 
• Conduct a needs assessment. Identify your best opportunities to improve efficiency, reduce shrinkage, connect with your customers, improve sustainability and empower your employees. Ensure that your new technology rollout plan is matched to those opportunities and minimizes your biggest risks. 
• Bring technical expertise and infrastructure. Retailers need leaders and partners that not only understand how to integrate new technology, but also have the underlying infrastructure to gather, secure and share the data and insights it can deliver. This is the time to retire any outdated or manual systems that will inhibit the free flow of your new insights. 
• Pilot first, then expand. As with any new investment or experiment, it’s ideal to test and learn in smaller controlled settings. Consider testing the new technology in a single representative store or a few key markets, to learn how your team and customers respond, and work out any questions or issues before a broader rollout. 
• Develop training and resources. Even changes that will benefit the entire organization take time and energy to adopt. Your teams in stores, fulfillment centers and corporate offices will need training, milestones, resources and support teams to keep up the momentum and market the wins. Technology partners may be helpful here, but pair them with internal leaders and champions to increase buy-in.

Half a century after that first history-making scan, the continued integration of RFID and 2D barcodes with advanced technologies like artificial intelligence promises to further transform retail supply chains. Retailers that embrace them can achieve greater operational efficiency, better compliance and, above all, happier employees and more satisfied customers — a recipe for success in an often-cutthroat market.

JW Franz is the IoT and automation solutions director at Barcoding, Inc.