Will Online Shopping Kill Barcodes?

Next to the predicted (and bogus) death of QR Codes, probably the next most prevalent doomsayer forecast is that online shopping will kill barcodes. And one of the most-oft stated causes is online shopping. This is something of a change since not too long ago the most popular reason that barcode technology was going to fail was RFID. More reasoned thinking—and actual experience—has quieted the hysterical voices. Let’s apply come of that same calm logic to barcodes and online shopping. Will the latter kill for former? No and here’s why. But first, let’s get the facts straight.

What do we mean by online shopping? Most statistical studies consider online shopping to the business-to-consumer subset of e-commerce, which includes all online transactions including business-to-business. Online shopping statistics typically include online transactions from traditional stores as well as from e-tailers such as Amazon.  What do the doomsayers consider online shopping to be? I don’t know.

But that’s not all. What marketplace are we talking about: worldwide B2C e-commerce or just the USA?

How are sales being measured: in number of shoppers, number of transactions or in total dollars spent?

And now for the big question: how do these numbers square with the total number of shoppers, transactions or dollars spent in brick-and-mortar establishments?

According to Statistica, there were 172.3 million digital shoppers in the United States in 2010, and by 2018 they predict that there will be 215.0 million.

According to The American Genius (TAG) e-commerce grew 12.6% in 2010 to a total of $176 billion, and the total is expected to grow to $279 billion this year.

Online sales are a tiny portion of retail sales

But here is the big kicker: Also according the TAG, online sales are a very small percentage of the total retail market. In 2014 online sales represented only 8% of total sales.  This number is predicted to increase to between 9-11% this year.

If these numbers are accurate and if the future of conventional stores is threatened, will online shopping kill barcodes? There are several answers, the first of which is “not anytime soon.” The second answer is “…and probably not ever.”  Why?

Many people think of barcodes as a price look-up tool, and while that is not an incorrect definition, it is an incomplete one. Price look-up is only a portion of what a barcode does—not to denigrate it, but rather just to put into its proper perspective. Think of other tools, for example a hammer. Yes it drives nails into wood, but that is a small thing compared to its larger role as a fastening device that builds homes, railroads (spikes), vehicles and heavy equipment (rivets), etc. The analogy can quickly be taken too far, but you get the idea.

What do barcodes actually do in retail?

Will online shopping kill barcodes? No because online shopping, like conventional shopping uses barcodes to track product movement, which is the primary use of barcodes.  Most shoppers are aware of this, but not fully aware of the enormity of what this encompasses. Yes it means store-level inventory control, but it the barcode is also used to:

• get the right items in the right quantity into the shipment
• get the right item into the individual package
• track the shipment as it departs from
• control raw materials, parts and subassembly inventory in manufacturing

For these and other reasons, barcodes will not be killed by online shopping because they also essential to serving and supporting online shopping systems.

Your comments and experiences are always welcome.