Walmart lets the barcode disappear

Revolution at the till — invisible Digimarc technology is already being used by early adopter Wegmans on private-label products

A newly developed barcode from the United States can fundamentally change the checkout process. It holds the information of the current EAN/UPC codes but is invisible to the human eye. Walmart is testing with it, and competitor Wegmans is already applying it to their private-label items.

It sounds like magic, but it's technology. The black and white barcode that is printed on billions of consumer packaged goods, can be replaced by an invisible code: the “Digimarc Barcode” from the U.S. firm Digimarc. Walmart CEO Doug McMillon says it has the potential to fundamentally change the checkout process. After Macmillan’s comments on his personal Instagram account, the stock price of Digimarc saw a significant boost.

The U.S. grocery retailer Wegmans is already printing the Digimarc Barcode on private-label products and is using image-based scanners at checkout that can read the invisible code with a camera.

The advantages of the technology, which first piqued the interest of the grocery industry during NRF 2014, are obvious. Packages can be printed all over with hundreds of barcodes without disturbing the package design.

The scanning speed goes up significantly according to Digimarc technology partner Datalogic. Hunting for barcodes during the scanning process becomes unnecessary, which eases the self-scanning for customers. The imaging cameras can also pick up several products at the same time. The investment should pay itself back quickly through savings in labor costs, according to the technology provider. Digimarc Barcodes also have an advantage over classic barcodes in that they can hold more information than just the EAN/UPC code that GS1 provides for identification of products. For example, it is possible to include additional marketing information on the packaging.

Not every genius invention gains adoption. That Digimarc and scanner manufacturer Datalogic have been able to get the largest retailers on their side, is a strong indication that this novelty has actual future potential. GS1 Germany is in conversation with their U.S. counterparts and currently assess Digimarc as an “interesting initiative.” According to GS1 CEO Jorg Pretzel the technology will be tested in the knowledge center of the trade organization and with several German consumer goods companies.

Digimarc Barcodes on product packaging are not going to be widely deployed any time soon. The traditional barcode is on over 10 million products worldwide, and is essential for all IT processes in trade and industry which cannot be replaced in one go. Erik Bank from Digimarc and Thomas Pahlings from scanner manufacturer Datalogic assume that the innovation will first be deployed on private-label products — like with first-mover Wegmans. A retailer controls its own packaging, whereas for national brands the entire industry has to commit.

Special inks and complex printing processes are not necessary to apply the Digimarc Barcode with the GTIN number. The secret is an algorithm that manipulates the printing data in such a way that tiny dots carry the information. These can only be read with image-based scanners together with appropriate software. The cost to create and apply the Digimarc Barcode still presents a challenge according to chief Pretzel. Interested retailers need to make the investment in image-based scanners at their point-of-sale checkout lanes. This technology is the next generation from laser-based scanning.

In Germany, the Rewe group is a pioneer in this area, as they are installing Datalogic image-based scanners in thousands of their stores.