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