Why producers and retailers should already start using GS1 Digital Link 2D barcodes
Maintaining customer loyalty; continuing to attract customers to physical stores; streamlining product recalls; adapting to changing consumer behaviour; reducing waste; and fighting theft: Producers and retailers are under constant pressure to identify new ways to address these important challenges. The drive towards the use of advanced 2D product codes with the global launch of the GS1 Digital Link standard across industries has the potential to be an advantage in all these areas.
The Digital Link barcode is the result of the global standards body GS1’s move to transition from 1D barcodes to a new 2D barcode format. 2027 will be the official sunrise period for Digital Link 2D codes, when global industry will need to ensure, by year end, that 2D codes are accepted at point-of-sales (POS). This will also mark the start of the sundown for the traditional UPC/EAN 1D GS1 barcodes, as, increasingly, more companies will aim to eliminate the use of 1D barcodes entirely.
Making digitally connected products the global standard
Under the change, barcodes will be upgraded from the traditional 1D GS1 barcode with its global trade item numbers (GTINs) of 14 numbers, to a unique 2D barcode including the GTIN, as well as the possibility to include an important amount of additional embedded product and manufacturing data that retailers and consumers can utilize. This is the first time that digitally connected products and dynamic or ‘hot data’ will be established as a standard, marking the beginnings of a critical evolution in product identification from identifying products to identifying and enabling digital twins of physical products. As a major step towards making significantly more product information accessible to the entire supply chain, it also presents key opportunities for producers and retailers.
The GS1 Digital Link is not the only new standard supported by GS1 with the potential to provide added benefits to retail businesses. From 2026, the EU will start rollout out its own Digital Product Passport, with the potential to transform how retailers, manufacturers and other businesses share product information across the supply chain, particularly in relation to sustainability. The Digital Product Passport (DPP) will be in effect a digital twin of a product linked to the physical product through data identifiers and carriers proposed by GS1, for example QRs and RFID tags, to collate and share key product data from all stages of the supply chain to facilitate product circularity. The DPP will include essential details such as a unique product identifier, compliance documentation, and information on substances of concern. It will also provide user manuals, safety instructions, and guidance on product disposal.
DPP roll-out is already imminent with the first products, car batteries, mandated to have DPPs from 2026, followed by all textiles, clothing and footwear by 2028. The EU currently plans for almost all products, with the exception of food, feed and medicines, to carry a DPP by 2030.
A critical advantage of both the new standards if adopted globally will be the ability to embed a larger amount of variable product information in one barcode used globally which would also contain pricing information for charge at POS. This increased product data in barcodes that can be scanned by mobile phones and POS scanners will provide important product information digitally for digital product twins and digitally connected products which can easily be used by several different stakeholders, including at retail.
So, what does the emergence of the 2D code as standard mean for the FMCG market and their producers and retailers? For retailers selling food products, particularly those with a short shelf life, 2D codes offer better solutions to problems such as managing pricing in response to changes in demand, reducing waste, working with brands to accelerate the product recalls process and engaging with consumers to display ingredient lists and nutritional information in multiple languages. Moving beyond the limitations of static information, the use of 2D codes can enable the brand to add more accurate best-before or eat-by dates. Yet another advantage of the dynamic nature of the GS1 Digital Link is more adaptable data for products that are liable to change in composition, such as wine. This potential for the late-stage customization of information on the label through its 2D code can deliver easier compliance achievement and widen the array of information provided to the consumer.
All types of FMCG businesses can take advantage of the GS1 Digital Link to reimagine their approach to product packaging. Going beyond the limitations of having to add the full ingredient list in multiple languages onto packaging, now, companies can potentially benefit from increased design space for bolder and more sophisticated branding.
An evolution in data provision through the supply chain to the consumers’ hand
Retailers and manufacturers are constantly hampered by complex data management processes and dependence on disparate data systems across the supply chain. Depending on the scanning device, the 2D code addresses these challenges by enabling one single QR or DataMatrix code to deliver a wide range of product information that can provide data consistency through supply chain partners, with the possibility to allocate each product a unique identifier. This enables improved inventory management, better management of a high number of suppliers, and also quick and easy access for consumers to varied information from nutrition tables to recall warnings on their smartphone. Plus, with only one code that can be used globally, companies benefit from simplified packaging and providing accurate product information available at every stage of the supply chain, and in as many languages as required.
Not only does all of this mean that consumers can access more relevant data more easily in a matter of seconds, but retailers can authenticate their products, trace their origin, better manage stock levels and product recalls, and adapt and update them more accurately in response to changing market requirements.
At the warehouse level, 2D codes present several important benefits for inventory management; firstly, by enabling the storage of a larger amount of consistent product data such as its name, GTIN, and order number and manufacturing location, eliminating any need for manual data entry and possible data integrity issues across the supply chain. Codes can store batch numbers, production dates, and expiry details for better stock rotation and quality control. With real-time data on inventory levels and movement provided through a 2D code, inventory management can be optimized, allowing for shifts in demand to be swiftly catered to, and waste reduced, in turn facilitating a reduction in costs. When it comes to product tracking along the supply chain, data such as shipping address and the carrier can also be incorporated, and the shipments’ complete movements tracked, a major advantage when dealing with dozens or even hundreds of suppliers, commonplace today.
In turn, suppliers can use QR codes to access critical information about a product, like compliance certifications, and to access extensive product information like specifications, handling instructions, and warranty information.
Another area where 2D codes like Digital Link can shine is in anti-counterfeiting efforts. From “deceptive” to “non-deceptive” counterfeit products, many brands are concerned about the potential impact of fake products. Once again, the standardization of 2D codes signals an important shift in tackling this problem. The precise, unique product identifier and manufacturing location information they can provide increases companies’ control and visibility at every stage of the supply chain.
Product recalls made easier
Slow and costly product recalls can be transformed by the added information, precise tracking and real time digital experiences provided by 2D codes. For example, 2D codes benefit US-based FMCG producers and manufacturers because they help enable compliance with the Food and Drug Administration’s (FDA) Final Rule on Requirements for Additional Traceability Records for Certain Foods, also known as the Food Traceability Final Rule. This regulation requires companies to be able to trace the movement of certain fresh food products from fruit to fish at every stage of the supply chain. QR codes are recommended for ensuring a high level of traceability and to speed up the process of their localization from days to just hours. This improvement can potentially enable retail businesses to rapidly respond to removing specific products affected by recalls, as well as avoid contamination outbreaks and costly lawsuits, providing them with a higher level of protection.
Brands can also use 2D Digital Link codes to provide real time digital information about products effected by recalls, providing a higher level of safety and protection for consumers and their brand.
2D codes are better for traceability than serialized 1D GS1 barcodes for a number of reasons. Most importantly, they can ensure that key product and supply chain information is easily accessible outside of the company’s production systems, for companies and their customers. They also allow for use of the smallest possible print size, enabling the inclusion of a greater volume of information on the packaging. Another advantage of 2D codes over serialized 1D GS1 barcodes is that, even when partially damaged, they can still be read.
Endless branding possibilities for consumer engagement
Positive customer perception and engaging with consumers is vital to every retailer. The fact that 2D codes deliver a valuable step forward in traceability and combatting anti-counterfeiting helps to maintain brand integrity and customer loyalty and protect profit margins.
2D codes also offer new and exciting ways for retail brands to advance brand awareness and most importantly ensure authentication and improve visibility. Their value in connecting physical products with digital product twin content means companies can enable 1st party data access and create engaging digital content that is both broader in scope (i.e. promotions, loyalty, benefits, product use, social media) but also more precisely targeted to align with the interests and tastes of specific demographics.
Moreover, in an age where traditional retail outlets are having to adapt to intense competition from e-commerce, the B2C communication channels that 2D codes can provide present an enviable opportunity for boosting online-to-offline (O20) and omnichannel commerce advantages not possible by relying exclusively on e-commerce. 2D codes can offer unique incentives like discounts for product loyalty, interactive experiences, and recipe information, amongst other brand engagement possibilities.
Preparing for 2D codes: next steps for retailers
For all retailers, a key priority must be updating their point of sale (POS) and mobile POS infrastructure so that their systems are capable of reading and processing 2D GS1 barcodes and their associated product attribute data before 2028. Retailers must also look at ensuring they have the technology in place to print and code individual items in 2D and with dynamic information at high speeds, especially those with their own brand products, such as major supermarket chains. Alongside this, companies must ensure their product data is clean and consistent in their IT systems in order to leverage all the data available by making sure that their inventory, supply chain management and merchandising systems are fully integrated.
Roll-out of the GS1 Digital Link is already underway while the Digital Product Passport entry is just over a couple of years away. By taking the right steps now, retailers and retail brands can fully maximize the benefits of the 2D code.
