Sears First Out Of Gates with 2-D Bar Codes

By Evan Schuman  |  Posted 2008-01-18

Sears First Out Of Gates with 2-D Bar Codes

Efforts to implement retail 2-D bar codes are accelerating, with Sears becoming the first U.S. retailer to begin a public trial that started in mid-December at a store in Marietta, Georgia.

Sears' name is now on a substantial list of top-tier U.S. retailers who have been seriously exploring the technology, including Best Buy, Gap, Target and Nordstrom.

There are multiple vendors pushing the technology in the United States; Best Buy and Target are working with a company called StoreXperience, while Sears and others are talking with an outfit called ScanBuy.

At the National Retail Federation show in New York City this week, some retailers and consumer goods manufacturers discussed the 2-D efforts, almost all in exchange for an agreement that they not be quoted by name as most are considering similar trials.

The technique involves having a cell phone's digital camera "look" at a small 2-D bar code on an advertisement, which launches an applet.  A server interprets the bar code and the phone then launches a Web browser and deep-links to a page on that site, typically the Web site of the advertiser.

Currently, the biggest concern, which is also likely to be the most short-lived, is that the service is available on a relatively few phones in the United States.  The concern about a shortage of supported phones was mentioned by a Sears manager involved in the trial.

Click here to read more about Sears' decision to shut down its "Manage My Home" site because of poor security controls.

ScanBuy, for example, has worked out deals with only Sprint and Alltel, according to ScanBuy CEO Jonathan Bulkeley. Such negotiations are complex because it requires deals and programming for multiple browsers, carriers, hardware manufacturers, operating systems and camera manufacturers. A code or management change from any one of those players can make the whole package unravel.

Concerns about 2-D

At the Sears trial, several hundred product advertisements in the store have the code, Bulkeley said. To simplify matters, Sears is initially having store associates use the phone and then show the results to customers, as opposed to letting consumers do their own scanning. This sidesteps some of the hurdles, such as guaranteeing that the phones used are fully compatible with the demo and that the cameras are aimed properly. On some phones, if the bar code is not directly in the center of the screen, the application won't work.

Another concern is that consumers must download the application. The applications tend to be small-both the apps for StoreXperience and ScanBuy start at about 200K, depending on the browser and the required OS needed-and can be installed in less than a minute.

Some argue, though, that the simple act of requiring any download may turn off some consumers, who simply won't bother. Bulkeley is one of them.

"There are probably only 10,000 people [in the United States] who have ever scanned a bar code," he said, adding that he wants manufacturers to pre-install this applet on mobile phones.

"I think that this will not become ubiquitous if consumers have to download it. People aren't really downloading apps to their phones. Most people are just barely getting comfortable with using the browser on their phone. We believe that downloads will not push this." The Sears trial is slated to end this June

One IT manager with a Fortune 50 consumer goods manufacturer said that his firm is in talks with ScanBuy and that they were introduced to the firm by Verizon. That manager said he is impressed with the technology and is discussing it internally, but he believes that 2-D bar code will be pushed aside by NFC (near-field communications) devices, which are still a few years away. He sees 2-D as a short-term placeholder until NFC is real.

2-D or NFC?

"Personally, I think that touchless NFC approaches will likely be more successful.  No need to aim your camera.  But Scanbuy's approaches are worth following," he said.

That consumer goods manager said that he's also looking at Snaptell, as another way to deliver similar capabilities. Snaptell "eliminates the need for the 2D bar code and takes a picture of a product with a cell phone.  That picture is then compared to images in a database, which leads to an ID," he said. "Seen that work in a demo, but skeptical if the image recognition can work under varying conditions."

That manager's thoughts about NFC were similar to others. But news this week-courtesy of a new NFC market share report this week from ABI Research-suggested that NFC is farther away than initially thought, giving 2-D more maneuvering room.

The new ABI numbers for NFC shipments dropped the 2007 estimate to 650,000 from a predicted 1.1 million and also reduced the projections for this year to 6.52 million, from a predicted 9.81 million.

Even so, Bulkeley predicts NFC and 2-D bar code co-existence based on pure economics. The nature of NFC will lend itself better for payment and POS interface but it's not practical to create one for every print ad in stores, streets and in publications. But 2-D bar codes, he argued, can be mass-produced for very little money.

"NFC will be for a payment mechanism but I'm not so sure it will be an information access mechanism," Bulkeley said. "Car and Driver (magazine) isn't going to print 400 near field codes."

Like all trials, it's not clear whether any will lead to actual deployments. And like all negotiations, it's not clear how many of the retailers who have expressed an interest will end up agreeing to a trial. A Nordstrom's manager, for example, said Thursday that the chain has decided to not pursue the discussed 2-D trial. One reason mentioned was that it was seen as placing too much of a burden on the consumer.

Retail Center Editor Evan Schuman can be reached at

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