Spiro Taktikos, MD Oceania at Markem-Imaje, takes a closer look at why producers and retailers should use the GS1 Digital Link 2D barcode.
Maintaining loyalty; attracting 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 GS1’s transition from 1D to a new 2D format, with 2027 being the official sunrise period for Digital Link, when global industry will need to ensure 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 codes.
Digitally connected global products
Under the change, barcodes will be upgraded from the traditional 1D code with its global trade item numbers (GTINs), to a unique 2D code that includes the GTIN, as well as the possibility to include additional product and manufacturing data. This is the first time that digitally connected products will be established as standard, marking a critical evolution in product identification. As a major step towards making significantly more product information accessible to the entire supply chain, it presents key opportunities for producers and retailers.
From 2026, the EU will roll out its own Digital Product Passport (DPP), which has the potential to transform how retailers, manufacturers and other businesses share product information across the supply chain, particularly in relation to sustainability. The DPP will be a digital twin of a product linked to the physical product through data identifiers and carriers proposed by GS1, such as GS1 Digital Link QR codes 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 essentials like a unique product identifier, compliance documentation, information on concerns, user manuals, safety instructions, and guidance on disposal. Roll-out is imminent with the first products, car batteries, mandated to have DPPs from 2026, followed by all textiles, clothing and footwear by 2028.
A critical advantage of both new standards if adopted globally is the ability to embed a larger amount of variable product information in one code, on top of containing pricing information for POS. This increased product data will provide important product information digitally, which can be used by several different stakeholders, including at retail.
So, what does this mean for the FMCG market and its producers and retailers? For food product retailers, particularly those with a short shelf life, 2D codes offer better solutions to problems such as managing pricing, reducing waste, managing product recalls, and consumer engagement in multiple languages. The use of 2D codes enables the brand to add more accurate best-before or eat-by dates, while also providing more adaptable data for products liable to change in composition, such as wine. This potential for the late-stage customisation of information on the packaging can deliver easier compliance, widen the array of information provided to the consumer, and open the door for SKU reduction with the use of more generic packaging.
An evolution in data provision
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, with the possibility to also allocate each product a unique identifier. This enables improved inventory and supplier management, and quick and easy access to varied information, from nutrition tables to recall warnings. Plus, with only one code 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 this mean that consumers can access more relevant data easily in a matter of seconds, but retailers can also 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 important benefits for inventory management. Enabling the storage of a larger amount of consistent product data eliminates any need for manual data entry and possible data integrity issues. Codes can also 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, inventory management can be optimised, allowing for shifts in demand to be swiftly catered to, and waste reduced, facilitating a reduction in costs. When it comes to product tracking, data like shipping address and the carrier can be incorporated, and the shipments’ complete movements tracked. In turn, suppliers can access critical product information, like compliance certifications, and extensive product information like specifications, handling instructions and also warranty information.
Product recalls made easier
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 and their overseas suppliers because they help enable compliance with the FDA’s Food Traceability Final Rule, which requires companies to trace the movement of certain fresh food products at every stage of the supply chain. QR codes are recommended for ensuring traceability and to speed up the localisation process from days to hours. This improvement potentially enables retailers to rapidly remove products affected by recalls, and avoid contamination outbreaks and costly lawsuits, while providing a higher level of safety and protection for consumers by providing real-time information on recalls.
2D codes are also better for traceability because they ensure that key information is easily accessible outside of the company’s production systems. They also allow for the smallest possible print size, enabling the inclusion of a greater volume of information on the packaging, and even when partially damaged, they can still be read.
Endless possibilities for engagement
2D codes offer new and exciting ways for retail brands to advance brand awareness, ensure authentication and improve visibility. Their value in connecting physical products with digital product content means companies can enable first-party data access and create engaging digital content that is broader in scope and more precisely targeted to align with the interests and tastes of specific demographics.
Traditional retail outlets are having to adapt to intense competition from e-commerce, the B2C communication channels that 2D codes can provide present an opportunity for boosting online-to-offline and omnichannel commerce advantages, as 2D codes can offer unique incentives like discounts for product loyalty and interactive experiences, among other brand engagement possibilities.
Preparing for 2D codes
For all retailers, a key priority must be updating their POS infrastructure so their systems are capable of reading and processing 2D codes before 2028. Retailers must also ensure they can print and code individual items in 2D with dynamic information at high speeds, especially those with their own brand products. Companies must also ensure their product data is clean and consistent in their systems in order to make sure their inventory, supply chain management and merchandising systems are fully integrated.
Roll-out of the Digital Link is already underway while the DPP is just over a couple of years away. By taking the right steps now, retailers and brands can fully maximise the benefits of the 2D code.
This article was first published in the print issue of PKN Packaging News, January-February 2025, page 40.
