Are 2-D Barcodes About To Ship On Cellphones? Will That Be Enough To Make A Difference?

Written by Evan Schuman
July 10th, 2008

Retail deployment of the 2-D barcode, a technology that allows consumer cellphones to see virtually unlimited amounts of content by taking a picture of a special barcode, has slowed after an initial flurry of activity in January.

But several major cellphone carriers are preparing to bundle the 2-D barcode software with phones as they ship. Will that make a difference?

Although quite a few prominent retailers and consumer goods manufacturers—including Best Buy, the Gap, Target, Nordstrom and Procter & Gamble—investigated the technology (with many at those companies saying they were favorably impressed), the only major retailer to conduct a public trial in the U.S. has been Sears. Even the Sears trial was limited to one location (Marietta, Georgia). Nike is running a 2-D barcode trial currently in Mexico, involving newspaper advertisements.

At the same time, key retail and consumer goods players have been seriously evaluating Near-Field Communications (NFC), an alternative mobile approach. Those companies conducting recent public NFC trials include Jack In The Box, Loblaw and Sony. The 7-Eleven chain had an NFC trial running through last year.

Some have positioned NFC as the better technology, with 2-D barcode acting as a placeholder while NFC solidifies; while others suggest more of a barcode-RFID analogy, with NFC and 2-D barcode co-existing for an extended period and each playing to its strength. Applications for 2-D, for example, tend to be more format-friendly, with some Japanese companies placing them on drink coasters and other low-cost options, something that NFC would have difficulty duplicating.

But one 2-D barcode advocate is predicting that 2-D’s problems stem from how it’s deployed. Scanbuy CEO Jonathan Bulkeley, whose company sells 2-D barcodes, said that current models require consumers to download applets to their phones. That action, for example, sharply reduced the number of consumers who tried the experiment at Sears in Georgia, he said. "It needs to be bundled on the phone as they ship out," he said.

By the end of the year—and possibly as soon as the end of September—several "major" cellphone carriers will start shipping phones with 2-D barcode software already installed. If that happens, Bulkeley said, many of those retailers and consumer goods manufacturers who have been sitting on the fence will start to deploy.

Will that be enough? Marketing and communication will be a crucial next step. One of the problems with the Sears trial, Bulkeley said, was that there were far too few signs telling consumers of the trial and how specifically to participate.

"There were a few signs here and there, but certainly not to the extent that was necessary," he said.

If the major carriers all participate and most phones start shipping with the software, will it suffer the same fate as contactless payment, which is widely distributed to consumers who have no idea they have a contactless payment device in their wallet?

First, major campaigns must be launched to make sure people know that their phones have this software, to train them how to use it and to alert them to any 2-D trials in their travel paths. A consumer walking into a store that is doing a 2-D trial must know that a 2-D trial is happening.

Second, awareness doesn’t necessarily become action. Incentives must be put in place and the incentives must be compelling enough to get consumers to move out of their comfort zones.

It’s still clear that 2-D barcode has huge potential. But when it comes to mobile applications, never underestimate retail’s ability to merge the word "potential" with "unrealized."


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