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.
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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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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
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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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