Industry News

How the barcode changed retailing and manufacturing

In 1948, N Joseph Woodland - a graduate student at the Drexel Institute in Philadelphia - was pondering a challenge from a local retailer: how to speed up the tedious process of checking out in his stores by automating transactions.
A smart young man, Woodland - known as Joseph - had worked on the Manhattan Project during the War, and had designed a better system for playing elevator music. But he was stumped.

Then, sitting on Miami Beach while visiting his grandparents, his fingertips idly combing through the sand, a thought struck him. Just like Morse code used dots and dashes to convey a message, he could use thin lines and thick lines to encode information.

A zebra-striped bull's-eye could describe a product and its price in a code that a machine could read.

The idea was workable, but with the technology of the time it was costly. But as computers advanced and lasers were invented, it became more realistic.

The striped-scan system was independently rediscovered and refined several times over the years. In the 1950s, an engineer, David Collins, put thin and thick lines on railway cars so they could be read automatically by a trackside scanner.

In the early 1970s, IBM engineer George Laurer figured out that a rectangle would be more compact than Woodland's bull's-eye.

He developed a system that used lasers and computers that were so quick they could process labelled beanbags hurled over the scanner.

Retailers v producers
Joseph Woodland's seaside doodles had become a technological reality.

Meanwhile American's grocers were also pondering the benefits of a pan-industry product code.

In September 1969, members of the administrative systems committee of the Grocery Manufacturers of America met their opposite numbers from the National Association of Food Chains. Could the retailers and the producers agree?

A 1950s advert for Wrigley's chewing gumImage copyrightALAMY
Image caption
Wrigley's chewing gum would be the first product sold via a barcode in 1974
The GMA wanted an 11-digit code, which would encompass various labelling schemes they were already using. The NAFC wanted a shorter, seven-digit code, which could be read by simpler and cheaper checkout systems.

The meeting broke up in frustration. Years of careful diplomacy - and innumerable committees, subcommittees and ad hoc committees were required before, finally, the US grocery industry agreed upon a standard for the universal product code, or UPC.

It all came to fruition in June 1974 at the checkout counter of Marsh's Supermarket in the town of Troy, Ohio, when a 31-year-old checkout assistant named Sharon Buchanan scanned a 10-pack of 50 sticks of Wrigley's juicy fruit chewing gum across a laser scanner, automatically registering the price of $0.67 (£0.55).

Shifting power
The gum was sold. The barcode had been born.

We tend to think of the barcode as a simple piece of cost-cutting technology: it helps supermarkets do their business more efficiently, and so it helps us to enjoy lower prices.

But the barcode does more than that. It changes the balance of power in the grocery industry.

That is why all those committee meetings were necessary, and it is why the food retailing industry was able to reach agreement only when the technical geeks on the committees were replaced by their bosses' bosses, the chief executives.

A 1950s US supermarket with a manual cash registerImage copyrightGETTY IMAGES
Image caption
Barcode technology required a significant investment for smaller retailers
Part of the difficulty was getting everyone to move forward on a system that did not really work without a critical mass of adopters.

It was expensive to install scanners. It was expensive to redesign packaging with barcodes - bear in mind the Miller Brewing Company was still printing labels for its bottles on a 1908 printing press.

The retailers did not want to install scanners until the manufacturers had put barcodes on their products. The manufacturers did not want to put barcodes on their products until the retailers had installed enough scanners.

But it also became apparent over time that the barcode was changing the tilt of the playing field in favour of a certain kind of retailer. For a small, family-run convenience store, the barcode scanner was an expensive solution to problems they did not really have.

But big supermarkets could spread the cost of the scanners across many more sales. They valued shorter lines at the checkout. They needed to keep track of inventory.

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