2-D Barcode To Hit America in April

Written by Evan Schuman
January 11th, 2008

A favorite of marketers and retailers for years in smartphone-embracing parts of Europe and Asia, the 2-D barcode is going to make its U.S. debut this April in some New York City consumer electronic and cosmetic retailers, according to the president of a Microsoft-backed company who says he has cut the first U.S. 2-D deal.

At its most basic, a 2-D barcode uses two elements of a typical smartphone—the digital camera and a Web browser—to create a rich 2-way data exchange. The consumer might see a poster for a particular product—or a model wearing interesting clothes—and want more information. That shopper would aim her smartphone at the 2-D barcode. A small applet on the phone would interpret the barcode, launch a browser and go to a very deep link within that site.

The consumer gets instant details about what the model is wearing or what the product’s specs are, along with a link to purchase the items immediately. Beyond the potential sale, the retailer or manufacturer would learn an awful lot about that consumer transaction. The very lengthy URL hidden in that 2-D barcode identifies the exact location of that consumer. Depending on the software being used, there is an excellent chance the consumer can be identified and associated with his/her purchase history. All of this from a tiny picture hidden unobtrusively in a corner of the poster.

Herve Pluche, president of a company called StoreXperience, said his company will be the first to bring 2-D to the U.S. and that it will debut this April at five locations in Manhattan. Asked if that rollout was definite, Pluche said that no agreement had been signed but "we do have a handshake."

He wouldn’t say who the retailer was who had agreed to the five locations, but did say that it was a chain focused in either consumer electronics or cosmetics. Pluche said that he had met with 10 retailers and that all were very interested, although he wouldn’t identify them.

A slide presentation that Pluche was using, though, did identify several companies that the slides said were "already engaged" including Best Buy, the Gap, Nordstrom and Target. Those slides said that all of those retailers—other than Gap—were being recruited in a "joint effort with the Microsoft Retail Group."

StoreXperience has been selected to be a member of a Microsoft marketing support program that has yet to be announced, according to officials working with StoreXperience. The vendor will have a booth at the National Retail Federation’s tradeshow next week and the booth will be within Microsoft Alley.

Other companies involved in these talks are the Simon Property Group, France Telecom and Epson, the slide said.

The financial return-on-investment picture is complicated. Pluche said pricing for retailers will range sharply based on the number of stores and average revenue. But he would insist on the retailers paying something "to rule out companies that wouldn’t be committed to the endeavor." He said that for a retailer that would be one of the largest 50 in the U.S., he’d want to receive anywhere from $250,000 to $450,000 to participate in a trial.

The complicated part is that different companies being talked with have very different goals for the kinds of results they want. Best Buy and other specialty retailers, for example, werer focused on delivering a strong purchase-to-visit ratio.

The slide said Best Buy and the other specialty retailers wanted to use the 2-D barcodes to "effectively compete with online shopping" and to prevent the store from "becoming a simple showroom." Whether the intent was to help their brick-and-mortar operations lose fewer sales to its online arm or merely to more effectively compete against the online operations of other retailers was not clear. But the idea of using mobile technology to help the physical store stay relevant is an interesting—and unchartered–strategy.

For brands and franchises—such as Epson and the Gap—the financial picture was quite different. For them, the performance metrics were average spend per visit and creating "new upsell and crosssell opportunities," the StoreXperience document said, as well as to "create competitive advantage by transforming the customer experience."

For companies including Simon Property, Nordstrom, Target and France Telecom, the performance metric was simply consumer adoption and usage along with delivering to the consumer "contextual advertisings and promotions."

After the April rollout, the company expects to have a next phase series of rollouts hit "in the Fall, probably September," Pluche said.

But even if the April trials happen and a smartphone-carrying consumer happens to run into them in New York City, they might not be able to participate. The mobile operating systems to be supported for the April trials will only be Blackberry/RIM and Symbian, meaning that Apple iPhone and Treo users are out of luck. Asked if the goal is to support iPhones by September, Pluche said, "Absolutely."

The only way to experience the 2-D interaction with the StoreXperience trial is by downloading a 200K rich client. But consumers who can’t do that can go to a web site and select the retailer and key in an eight-to-twelve digit PUC code visible below the 2-D barcode. "But the rich client is far superior in terms of experience," Pluche said.


4 Comments | Read 2-D Barcode To Hit America in April

  1. Franz Dill Says:

    This is not the first example of 2D codes in the US, though not yet common, the company Scanbuy is working with a number of tel carriers, such as Verizon, to deliver their Scanlife 2D codes which are read by standard cell cameras. These were introduced in Time Square on New Years Eve.

  2. Evan Schuman Says:

    Editor’s Note: Fair point. Had meant to indicate the first use of it with major retailers.

  3. Jeff Paunicka Says:

    This will be interesting to see what symbologies will be used. PDF417, ID-Matrix etc? The other issue is the royalties that will have to be paid by the cell phone companies for the use of the deoding algorithms to be put into the phones.

  4. Andrew Says:

    We are now into the middle of April has this trial begun ?


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