Getting Vertical - Retail

What's Next in Retail: Barcodes Get a Makeover

By Paula Bernier, Executive Editor, IP Communications Magazines  |  August 17, 2010

The barcode is making a comeback.

It never went away, of course. It’s just that recently a lot of pretty important folks have become very excited about the barcode and the new opportunities that can be created when it’s married with social networking and mobile technologies.

Indeed, a company called Stickybits offers a solution that allows people to attach barcodes to objects, which creates links between those items and online information.

In mid May Stickybits announced that it has raised $1.6 million in funding.

The dough comes from new investors First Round Capital and Lower Case Capital, as well as existing investors Mitch Kapor and Polaris Venture Partners. Chris Sacca, who was involved with many of the key partnerships early on at Google and was an angel investor in Twitter, also participated in the round. Additionally, the company brought Howard Morgan of First Round onto its board. According to Stickybits, Morgan “has been a Rabbi to entrepreneurs and has better pattern recognition than any early stage investor we know.”

Stickybits aims to capitalize on the growing prevalence of smartphones that can read barcodes with built-in cameras and combine that with social networking and location-based services. The company, which launched this spring in Austin, Texas, sells stickers with barcodes on them. Folks can put those stickers on virtually any object and use the company’s smartphone application to record a message, which is uploaded to the barcode. Then, when people scan the barcode with a smartphone, they get the message.

These barcode stickers can be applied to anything from a business card to a consumer product.

According to the Stickybits blog: “Since launching in March, we have seen some awesome uses of Stickybits, from a scavenger hunt through London to photo-tagged family trip to Disney World. Much to our surprise, people are even scanning products in grocery stores and creating social networks around brands. Through all these examples, people are using the Stickybits platform to tell stories about objects and make things more interesting.”

Scanbuy is another company offering similar capabilities. As TMCnet, the online site operated by INTERNET TELEPHONY’s parent, TMC (News - Alert), recently reported, Heineken recently adopted Scanbuy’s ScanLife application to allow users, with the help of their phones, to scan barcodes on Heineken products to download free applications for the iPhone, BlackBerry or Android-based devices.

According to Verizon (News - Alert) Business, 35 percent of all smartphone users would like to receive coupons on their mobiles, while 29 percent would like to be able to employ the devices to scan barcodes to get more information on a product.

Verizon Business explains that there currently are two types of barcodes: 1-D and 2-D. 

The 1-D version, which is used on virtually every product sold worldwide, can be used to identify the product for price and comparison shopping applications loaded on a phone.

“Retailers and even product suppliers are typically not big fans of consumer facing 1-D barcode applications, as the material is pushed out one way to the consumer without the possibility of directly sweetening the pot with a promotion or coupon,” according to Verizon Business.

2-D barcodes, however, allow retailers and suppliers to identify the product and govern the service that the mobile phone uses, the company explains. That provides the ability for the seller to offer targeted promotions and coupons when a consumer scans a product, the company explains.

Of course, this is just another version on mobile advertising, an area that’s been hot for some time, as communications companies, advertising firms and retailers move to make hay from the fact that most folks carry their mobile devices wherever they go and that location-based technologies enable them to reach those consumers wherever they are.

"Mobile advertising has enormous potential as a marketing medium, and while this industry is still in the early stages of development, AdMob has already made exceptional progress in a very short time," Susan Wojcicki, vice president of product management at Google, said in November when the search giant announced its intention to buy the mobile advertising outfit for $750 million. "AdMob is the quintessential Silicon Valley startup – generating impressive year on year revenue growth – and we're excited to welcome this talented team to Google."

Nikesh Arora, Google president of global sales, said at the recent International Advertising Association conference in Russia: "The advent of the iPhone (News - Alert), the Android devices and the BlackBerry have finally given people reason in the western world (to) start using the mobile data. And as you see that go up, you begin to see the relevance of advertising in those applications."

Ken Lee (News - Alert), director of product marketing for the Oracle Communications Service Delivery product family, says CMOs at service providers are interested not only in monetizing applications, but also in delivering advertising over mobile connections.

“Mobile marketing and advertising is expected to grow significantly in the next several years, and network operators need to stake their claim in this lucrative opportunity area,” says Shira Levine, directing analyst of next-gen OSS and policy at Infonetics (News - Alert) Research.

To move on the mobile advertising opportunity, Lee says, service providers need advertising platforms that both map to their existing operational and billing support systems, and that enable them to expose various mobile advertising campaigns to potential advertisers. For example, to the latter point, Lee says, wireless network operators could build an inventory of contextual advertising campaigns – like a campaign related to a sports event and involving the delivery of coupons via SMS; or a program tied into a movie opening with specific mobile deliverables – and easily serve up this menu of options via a Web interface to potential advertisers like BMW and Starbucks.

While it will take some time for wireless operators to put these platforms in place, populate them with various mobile advertising campaigns and create the ecosystems that will enable them to expose these menus to potential advertisers, Lee indicates that the big service providers are in a pretty good position to put all this together given they themselves are important brands that know what big advertisers might be looking for.

Barcodes could clearly become a key component of such campaigns. And wireless service providers are clearly aware of barcodes’ promise for such mobile advertising applications.

Indeed, barcodes have come a long way since they came on the scene back in 1948 when recent Drexel Institute of Technology graduates Bernard Silver and Norman Joseph Woodland developed a solution at the request of a food chain president.

Edited by Stefania Viscusi