The 21st century UPC: same design, different results

Prepared Foods, Jan, 1990 by Alan Rooks

The 21st century UPC: Same design, different results

What will the future be like? Most people imagine it will be wildly different than today, like in the sequel to the movie "Back to the Future," with its hovercraft skateboards and bullet-shaped cars. Even something as mundane as the Universal Product Code (UPC) will be dramatically different 20 to 30 years from now, right?

Not necessarily. The 21st century bar code will probably look exactly like it does today on retail packages. The big differences are likely to be behind the scenes.

One important change might be in the way the UPC is used to track shipping containers for perishable products. If batch, lot and serial numbers are bar coded, it would be much easier for retailers to manage their inventory of perishable and date-coded products, says Hal Juckett, executive vice president of the Uniform Code Council in Dayton, Ohio.

"Inventory could be tracked from a bar code on the container, indicating when that product runs out of code," he says. "That would automate a process that is manual now."

The UPC might also be applied to variable weight products, such as produce.

"We will probably see a more uniform way of controlling inventory on random weight products," says Ray Ahlgren, director of retail systems at Super Valu Stores.

Marketing milestones

However, these changes are relatively minor compared to how the use of scanning information for marketing could change in the 21st century.

Ahlgren predicts that retailers and manufacturers will be able to combine scanning information with "causal" data, such as price promotions, advertising, and demographic data to determine not only what products were sold, but why they sold and the implications for future marketing plans.

Some changes in the way scanning information is processed already are underway. For example, A.C. Nielsen Co. of Northbrook, Ill., is changing the way it collects scanning information to make it more accurate and usable. The company is currently testing what it calls a "passive monitor" that automatically collects scanning data directly from retailers' checkouts.

In the past, research firms have collected scanning data by having retailers physically send it to them on magnetic tape or diskettes. Converting and editing these materials takes up to two weeks. About 10% of this data is unusable because of data processing errors.

The passive monitor also allows marketers to see what other products were bought in conjunction with theirs. And because the system collects scanned coupon information, marketers can see the actual price consumers paid for products - not just the list price.

Previously, marketers have relied on printed sales reports, but in the future, that information will be available at the touch of a computer button. Nielsen, for example, has begun offering a "CDROM database" with two years of sales information on 424,000 items. It allows clients to access information from the Nielsen Scantrack data base.

Decision-making by computer

For both retailers and manufacturers, scanning data in the 21st century will be used not just to track sales but to actually suggest merchandising and marketing decisions. The development of "artificial intelligence" programs, which replicate human thought, is currently in its infancy but could make a powerful impact on the use of scanning data in the future.

"I think we'll see systems that weigh the variables and present a decision," says Graf. "The person operating the system will still make the final decision, but the computer will demonstrate how it arrived at its conclusion and what the consequences of that decision are."

When that happens, it will be another step toward turning scanning data into information, and that information into knowledge.

Alan Rooks is a contributing editor based in Skokie, Ill.