Understanding the GS1 DataBar Transition, an NCR White Paper

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Understanding the GS1 DataBar Transition, an NCR White Paper

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


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 1977.

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, 2014.

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 1972. 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.




1985 – Original UPC-A-based coupon released.

1997 – 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 128.

2005 – 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.

NCR Confidential Proprietary


Compliance tiers

Retailers today should be concerned about three major

tiers of bar code symbology and bar code processing

compliance.

1. 2005 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.

2005 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.

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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:

1. Omnidirectional

2. Omnidirectional Stacked

3. Expanded

4. Expanded Stacked

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 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:

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.

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, 2011.

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

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NCR Confidential Proprietary


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, 2010. 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.

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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 self-

checkout 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, 2010. 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, 2010.”

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

5 12345 67890

0

coupon

NSC

family

code

manufacturer ID

value

code

check

digit

5

NCR Confidential Proprietary


Summary

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 www.gs1us.org or contact

us at retail@ncr.com.

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NCR Confidential Proprietary


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 45479

USA

For more information on NCR,

please visit:

www.ncr.com/retail

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.

© 2009 NCR Corporation Patents Pending EB10152-0609 www.ncr.com

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