Are you ready to transition to the GS1 DataBar?

Transcription

1 Are you ready to transition to the GS1 DataBar? Understanding the GS1 DataBar Transition An NCR White Paper 2009 Experience a new world of interaction 2009 NCR Corporation

2 Executive summary 1 The GS1 DataBar (formerly called Reduced Space Symbology RSS) is the first new bar code symbology introduced worldwide to retail since the introduction of the European Article Number (EAN) format in As of January 1, 2011, all manufacturer coupons in the United States and Canada will fully transition to the GS1 DataBar symbology. Although the coupon issue is unique to USA and Canada, the general GS1 DataBar date for countries outside of the United States and Canada has been extended to allow for individual country-level compliance as late as January 1, Coupons are not part of any bar code transition outside of the USA and Canada. This transition will be highly beneficial for everyone in the industry, including the consumer. But, like any change in technology, it will require some preparation. Bar code history In 1949, Joseph Woodland applied for a patent, which was granted in 1952, for the first linear bar code. With the introduction of a technology that could change the face of retail globally, a set of standards would be needed to make the bar code a success. Woodland s bar code was not the code that eventually became known as the Universal Product Code (UPC), but it created the thought process which eventually led to meetings between the Grocery Manufacturers Association (GMA) and the National Association of Food Chains in 1969 to investigate this need for uniformity. These meetings led to the formation of the Uniform Grocery Product Code Council (UGPCC) which first met in Over the years the council became the Uniform Code Council (UCC) and, after merging with EAN in 2005, fell under the umbrella name of GS1. When relevant, the United States arm of GS1 is referred to as GS1 US and maintains a separate website from that of GS1. The actual bar code administered in North America was always known as the UPC. The most common 12-digit version is still known as UPC-A. Bar codes and coupons The introduction of bar codes into retail in 1974 eventually paved the way for today s scannable coupons, although coupons were never part of the original intention for UPC bar code technology. The coupon bar code didn t even exist until 1985, when it became the UPC-A Number System 5. (Number System 5 refers to the fact that the UPC-A manufacturer coupon guideline specifies 5 as the leading digit.) Since coupons were not in the original plan for bar codes, there has been a constant need to modify the system to accommodate the growing adoption of couponing. Because of this, the UPC coupon bar code has evolved a great deal since its humble beginnings Original UPC-A-based coupon released As more manufacturers applied for IDs, the realization sets in that the UPC-A will run out of digits in the future. A second bar code must now be added to coupons the Extended Coupon Code, implemented in another bar code symbology called Code 128. From 1997 on, coupons carry both UPC-A and Code From 1997 to 2005, the manufacturer ID portion of the UPC information grew from 6 digits to as many as 10. Couponing again became a victim of the UPC s success. Since then, the system has been meticulously managed to avoid issues until a new bar code solution could be introduced. The GS1 DataBar is the latest and greatest evolution of the bar code and coupon system.

3 Compliance tiers 2 Retailers today should be concerned about three major tiers of bar code symbology and bar code processing compliance Sunrise Compliance (and GTIN) 2. GS1 DataBar 2010 Sunrise Compliance 3. GS1 DataBar 2011 Coupon Compliance As new levels of compliance are introduced, the newer encompasses the standards for the predecessor, with GS1 DataBar Compliance being the latest and most encompassing Sunrise Compliance Because of rapid expansion and the need for a single global retail bar code standard, GS1 in 1997 announced the 2005 Sunrise initiative. This new initiative stated that by January 1, 2005, all companies in the United States and Canada must be capable of processing EAN-8 and EAN-13 symbologies, in addition to the standard 12-digit UPC. Prior to 2005 Sunrise, trade item vendors outside the United States and Canada who were using EAN-8 and EAN-13 symbology had to re-label their products with UPCs to be sold in the U.S. This meant applying for U.S. and Canadian bar codes with the UCC, at additional expense and time. After 2005 Sunrise, all products can now be scanned and processed globally without the need to re-label. To be 2005 Sunrise-compliant, retailers must be able to scan and process UPC as well as EAN-8 and EAN-13. They must also be able to store these symbols in their entirety (GS1 recommends also being able to store the check digit). In addition, parsing the Manufacturer ID (GS1 Manufacturer Prefix) is not allowed, nor is assigning UPC numbers with lead digits of 1, 6, 7, 8, or 9 for internal purposes. GTIN In addition to the 2005 Sunrise and GS1 DataBar 2010 Sunrise Compliance, retailers should understand one additional layer of compliance when looking into adopting the GS1 DataBar Global Trade Item Numbers (GTIN) compliance. GTIN is a database standard, and not on the GS1 DataBar 2010 Sunrise timeline, but could be very beneficial to retailers for managing the new bar codes. GTIN is an umbrella term used to describe the entire family of data structures that identifies trade items (products and services). These data structures include the data encoded in UPC, EAN-8, EAN-13, and 14-digit case-level bar codes. The introduction of GTIN compliance brings a need to store 14-digit bar code information. These 14-digit bar codes are not intended for retail point of sale (POS) at this time, but can be found in the supply chain where bulk package identification is necessary. In a GTINcompliant environment, the 14-digit bar codes are right justified and left padded with zeros. As mentioned, GTIN compliance is not currently a firm requirement for GS1 DataBar 2010 Sunrise compliance, but it will become desirable as the system grows. The 2010 implementation of GS1 DataBar allows truncation to 13 digits since the first digit is always 0 at this time. However, this may not stay true for future implementations of GS1 DataBar, and 14 digits could become necessary.

4 3 GS1 DataBar 2010 Sunrise Compliance The new GS1 DataBar format now allows for bar codes to be used on items too small for traditional UPC and EAN. It also allows additional data to be included and scanned at the POS for retailers that choose to take advantage of it. The new GS1 DataBar format has several variations, but only four apply to general retail POS: GS1 DataBar Expanded creates a whole new opportunity at POS, where lot numbers, expiration dates, unit weights, net weights and other important data can be handled and reported in real time at POS. The example illustrated here contains an item number, lot number and expiration date in an area similar in size to that used by a UPC-A: 1. Omnidirectional 2. Omnidirectional Stacked 3. Expanded 4. Expanded Stacked All of these bar codes are available to be placed on produce items for general retail sale and items within a retailer s supply chain (e.g., case-ready meat) in North America as of January 1, 2010 (GS1 DataBar Sunrise). Individual industries will add their support by releasing application guidelines over time. Guidelines already exist for produce, variable measure (most commonly meat) and coupons. The only difference between Omnidirectional and Stacked Omnidirectional is that the data is now stacked. The same goes for the expanded version. Stacked formats allow for more data to be contained in a smaller and more conveniently shaped space. GS1 DataBar Omnidirectional lends itself to applications where items may be too small for traditional UPC bar codes, or where the traditional EAN/UPC bar codes have been truncated or reduced (shrunk) to fit the small spaces, which degrades scanning speeds. The application most spoken of today is produce, and this format is currently showing up in several major retailers with positive scanning and accuracy results. GS1 DataBar 2011 Coupon Compliance There are two very compelling reasons retailers must be ready to read and process the data by GS1 DataBar Sunrise coupons and produce. Although the changes coming to produce, thanks to the GS1 DataBar transition, will be very beneficial to retailers, processing produce will not be mandatory. The same cannot be said for coupons. Being able to process coupons will be essential to all retailers. Recently, mandatory support for the new GS1 DataBar on coupons has been delayed until January 1, However, this only extends the time available for coupons to carry the UPC-A coupon code alongside the new GS1 DataBar. After January 1, 2011 the UPC-A will be removed and only the GS1 DataBar will remain. Coupons: Retailers will find that the new GS1 DataBar changes the way they currently accept and redeem coupons. Also, it is important to know that coupon

5 4 manufacturers are currently making the GS1 DataBar transition, and most are already well into the three-year plan to convert. Currently, coupons are in a transition period: Until 2008, coupons carried both the UPC-A and Code 128 Extended Coupon Code bar codes. From January 2008 until June 2008, the Code 128 bar code portion of the coupon was phased out and replaced by the new GS1 DataBar. The UPC-A portion remains. Starting January 1, 2011, manufacturers will be allowed at their discretion to drop the remaining UPC bar code and only print the new GS1 DataBar. Following this optional transition period, by June 2011, they will be required to only print the GS1 DataBar. So the question remains: Can this be ignored, and can retailers process the coupons manually without the need to scan? The short answer is, no. The nature of the new GS1 DataBar is to allow for growth, additional data, and flexibility. As this format grows, coupons will become multifaceted and more complex. A cashier today may be able to manually discount $0.90 from a purchase, but soon coupons will discount across multiple offers and work in conjunction with multiple products and multiple manufacturers IDs. This additional data allows for scenarios like, Buying two of product A and three of product B entitles you to a discount on product C. A cashier will not be able to manually enter promotions of this complexity. The only solution will be to have the ability to scan the coupon and let the POS solution do the work. Scenarios similar to this, where cashiers are unable to scan GS1 DataBar coupons, also increase the temptation for cashiers to give products away in an attempt to please the customer and speed the checkout process. Produce: Produce is the second compelling reason for retailers to adopt GS1 DataBar, and its introduction date is still January 1, Although coupons present more of a mandatory need to comply, produce presents an optional incentive to embrace the new bar code format, and adoption is completely up to the retailer. The incentive is valuable, though, and offers benefits that go directly to the bottom line. A 2001 study by NCR, the Food Marketing Institute (FMI) and GS1 (which was still the UCC at that time), at Dorothy Lane Market in Dayton, Ohio, was designed to evaluate how much produce revenue is lost at the front end due to cashier misidentification. The study found that this loss accounts for almost 1 percent of total produce revenue. This holds especially true in high staff turnover environments where cashiers tend to memorize item codes as a method to increase checkout speed, such as the more general apple PLU 4103 (Jonathan Apples). This becomes a real problem when retailers are losing revenue on items such as organics and specialty produce.

6 5 The new GS1 DataBar format eliminates this loss by allowing cashiers whether novice or experienced to scan produce instead of memorizing item codes. The FMI estimates that this could almost entirely address the 1 percent of produce revenue lost solely to misidentification using current hand-entered methods. In addition to becoming a valuable resource to cashiers, the GS1 DataBar also brings the same benefits to consumers who use the increasingly popular selfcheckout solutions. What else does the GS1 DataBar do? In addition to coupon and produce benefits, the GS1 DataBar also can carry Application Identifiers (AIs). AIs have been around for a long time, but this is the first time they have made an appearance at the POS. An AI is an additional set of codes that help identify long streams of bar code data. They are traditionally found in warehousing and shipping environments where scanners and processors need to identify bulk quantities of goods. With GS1 DataBar Expanded, this information can now be stacked and scanned at the POS. As retailers decide to implement AIs for their products and applications, a variety of new data options become available at the front end, such as net weight, price per unit, extended price and even expiration dates for perishable goods. With the increasing focus on product safety and traceability, the GS1 DataBar lays the foundation not only for immediate automatic prevention of the sale of old-dated fresh food at the POS, but also for the traceability standards and networks now being developed. IMPORTANT: A note on the change to the Coupon Sunrise Date On June 18, 2009, the Grocery Manufacturer s Association (GMA) announced that coupons would now have a deferred implementation date of January 1, 2011 rather than the planned date of January 1, Keeping in mind that almost all manufacturer coupons already have the GS1 DataBar bar code printed, GMA added that the recommendation to defer implementation should not dissuade ready retailers that are eager to capitalize on the additional capabilities of the DataBar from beginning to scan the new symbol on or before January 1, It is important to understand that the new date has not been extended to defer the printing of the GS1 DataBar on coupons, but to allow the UPC-A bar code to remain alongside the GS1 DataBar for a longer period of time. Although the date extension offers those impacted by the GS1 DataBar transition an additional year to prepare for the change, there is a restriction in the current coupon implementation. That restriction is: When the interim coupon was implemented in 2008, retailers who were not GS1 DataBar compliant lost the ability to scan the expiration date at the point of sale. As mentioned earlier, the first change to coupons in 1997 was the addition of the Code 128 Extended Coupon Code that accompanied the original UPC-A bar code on the coupon. The Code 128 Extended Coupon Code had the ability to contain the expiration date and therefore allowed this data to be scanned and processed at the point-of-sale. Remember that in 2008 the interim coupon was introduced, and the Code 128 Extended Coupon Code was eliminated in favor of using the GS1 DataBar Coupon Code beside the original UPC-A. Since the UPC-A bar code cannot support expiration dates, the only way for retailers to now process this additional information at the scanner is by having the ability to scan and process the GS1 DataBar bar code on coupons. The original 1985 UPC-A coupon structure: Figure 1: U.P.C. Coupon Code Not to scale coupon NSC family code manufacturer ID value code check digit

7 Summary 6 GS1 DataBar 2010/2011 Sunrise brings a new wave of scanning and couponing options that have never been seen before in retail. The benefits will reach everyone from manufacturers and retailers to individual consumers. It is vital that retailers understand what it takes to be compliant, especially as the deadline approaches. Retailers who initiate the GS1 DataBar transition early will benefit immediately from this new technology. To learn more about starting your own GS1 DataBar transition, or to find out if your existing technology and software are compliant, visit or contact us at retail@ncr.com.

8 Why NCR? With over 125 years of retail experience, NCR is a leading global provider of assisted- and self-service solutions. We help our clients around the world improve their customer interactions, implement change quickly and proactively, and transform their businesses to become leaders and change agents. We can help you, too. NCR Corporation 1700 S. Patterson Blvd Dayton, Ohio USA For more information on NCR, please visit: Experience a new world of interaction NCR continually improves products as new technologies and components become available. NCR, therefore, reserves the right to change specifications without prior notice. All features, functions and operations described herein may not be marketed by NCR in all parts of the world. Consult your NCR representative or NCR office for the latest information. NCR is a registered trademark or trademark of NCR Corporation in the United States and/or other countries. All brand and product names appearing in this document are trademarks, registered trademarks or service marks of their respective holders NCR Corporation Patents Pending EB