Published on: December 29, 2024 / Update from: December 29, 2024 - Author: Konrad Wolfenstein
Retail will change: 2D product information with category management and the GS1 2D matrix code - Image: Xpert.Digital
Digitalization in retail: Why the GS1 DataMatrix Code is the key in digital category management
Digitalization has profoundly changed retail and has increasingly steered category management towards data-based processes in recent years. A key element of this change could be the GS1 DataMatrix Code, a two-dimensional barcode that can store far more information than traditional barcodes. “The future belongs to those who see data as a strategic raw material” - in this sense, the GS1 DataMatrix is a key function for trade and industry to revolutionize category management in both online and stationary business.
But what exactly is a GS1 DataMatrix Code? Unlike a traditional EAN-13 barcode, which has been found on supermarket products for decades, a 2D code offers a higher data density. This means that more information can be stored in a relatively small square than a normal one-dimensional barcode would ever allow. This additional information opens up new possibilities: In addition to the GTIN (Global Trade Item Number), which uniquely identifies the product, data such as batch numbers, serial numbers or the best-before date can be inserted into the code. “Data diversity is the first step in generating real added value from information.” It is precisely this additional information content that can make a real difference in category management.
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How the GS1 DataMatrix is revolutionizing category management in e-commerce
In online retail, precise product data is essential to ensure a smooth customer experience. Consumers are increasingly relying on detailed information, especially when it comes to products with expiration dates or a complex series structure. The GS1 DataMatrix Code can support the following:
1. Advanced product attributes
In addition to the GTIN, retailers can also store other attributes in the code. This makes it easier to differentiate between product variants in the shop. For example, a product could look the same but have a different expiration date or belong to a different batch. By scanning the code, systems can recognize the correct information in a flash without requiring manual input.
2. Dynamic linking
E-commerce platforms benefit from linking code to online resources. As soon as a customer scans the code with their smartphone, further product details, application instructions or video instructions can be provided, for example. “Added value through context” – that is the central motto here. Customers are willing to consume additional information if it offers them a practical benefit.
3. Optimized logistics processes
In online retail, the supply chain tends to be complex as products are often shipped from different warehouses or locations. With the GS1 DataMatrix, tracking can be made easier and more transparent. Every package and every individual product can be traced precisely. This not only supports returns processes, but also ensures that inventory can be managed more efficiently.
4. Personalized recommendations
Online platforms collect extensive data about the purchasing behavior of their customers. If this data is combined with the information from the GS1 DataMatrix Code, more targeted product recommendations can be made. “Customers are the core of every purchasing strategy” – in this sense, connecting product and customer data helps to improve the overall shopping experience.
All of these factors create a solid foundation for data-driven category management. Products that are purchased frequently or have particularly high return rates can be quickly identified using the advanced data. This enables flexible and customer-centric product range design, where the needs of the customers come first.
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Importance of the GS1 DataMatrix in stationary retail
Although online retail is growing rapidly, brick-and-mortar retail is by no means written off. Many consumers still value being able to experience products directly. For successful category management, data must also be raised to a new level. The GS1 DataMatrix Code can play a key role in this.
1. Faster checkout, fewer errors
The classic cash register with a 1D barcode scanner could be supplemented or replaced by 2D scanners. This ensures more data security. In addition, cash register systems can retrieve information such as the best-before date, which can be particularly relevant for discounted goods. Item data can be recorded more correctly and quickly, incorrect bookings and incorrect pricing are reduced.
2. Enhanced shopping experience
Customers can scan the code with their smartphone to access additional information. “Informed buyers make more conscious decisions about a product.” This information offering can include, for example, ingredients, preparation tips or further application instructions. In the fresh food sector, for example, it is helpful if you scan the code and immediately find out which dishes can be prepared with the product.
3. Real-time inventory management
Especially in stationary retail, the warehouses are often located directly below or behind the sales area, which allows for immediate restocking. With the help of the GS1 DataMatrix, the inventory can be continuously monitored. As soon as a product reaches a certain sales threshold, a repeat order can be automatically triggered. This prevents important products from being sold out. At the same time, unnecessary excess inventory is reduced because order quantities can be adjusted more precisely to actual needs.
4. Targeted sales analysis
The 2D code can be linked to POS (Point of Sale) systems. Since more information is available per product, sales can be evaluated in more detail. For example, a supermarket can determine which MHD (best before) lots sell faster than others and whether customers prefer certain lots. Recalls or quality problems can also be tracked more specifically.
Synergy of online and offline strategies through omnichannel integration
The big advantage of the GS1 DataMatrix is its usability across all channels. An omnichannel approach is crucial today to seamlessly engage customers across different platforms. “Uniform product identification is at the heart of successful omnichannel trading” – this is exactly what is made easier with the GS1 DataMatrix Code.
1. Uniform product presentation
Whether in the online shop, in the app or in a brick-and-mortar store – products are identified identically. This creates trust because customers recognize the same product in different channels and therefore have a consistent brand experience.
2. Click & Collect
Many retailers now offer the option of ordering products online and then picking them up in store. With the help of the 2D code, identifying and handing over the goods can be made more efficient. The comparison between online orders and stationary inventory becomes more precise, reducing waiting times and errors.
3. Cross-channel promotions
Intelligent category management usually also plans cross-channel campaigns. Discount campaigns or special offers can be controlled channel-independently thanks to the GS1 DataMatrix code. Upon request, customers receive digital vouchers that can be redeemed in brick-and-mortar stores by scanning the code. At the same time, the stationary retailer can redirect the customer to the online shop if certain products are not in stock.
4. Synergy effects in data evaluation
Data from stationary retail can be combined with online key figures. For example, if certain product categories do particularly well online, the stationary range can be adjusted accordingly and vice versa. The extended product information in the GS1 DataMatrix provides the basis for precisely recording and analyzing sales across channels.
How the GS1 DataMatrix Code leads to better decisions in category management
The heart of category management is permanent optimization of the product portfolio and its presentation. The GS1 DataMatrix allows data from different areas to be brought together and strategic decisions to be derived from it.
1. Categorization and analysis
Products can be better classified through additional identification features (such as seasonal items, organic certification, allergy information). If a company recognizes that a certain product group is in particularly high demand, it can react more quickly. At the same time, less popular products can be removed from the range or optimized for specific target groups.
2. Placement in store
Shelf arrangement and product placement are crucial in brick-and-mortar retail. Based on the data collected, it can be determined where customers' attention is highest. The optimal arrangement leads to increasing sales and reduces inventory. If the store design is continually refined based on the data collected, a noticeable increase in sales is likely.
3. Bundling and cross-selling
If the 2D code provides information about products that are often purchased together, category management can put together targeted bundle offers. In the online shop, the system could automatically suggest suitable supplementary products, while in stationary retail the corresponding products are placed next to each other. This increases the shopping cart value and creates a pleasant shopping experience.
4. Customer loyalty through added value
“Those who understand their customers also understand their business.” By giving customers the opportunity to access additional product information, they feel valued and competently advised. In the long term, this strengthens customer satisfaction and leads to more intensive customer loyalty. In category management, this is reflected in significantly more stable demand and active word-of-mouth advertising.
Future prospects and innovation potential
Even though the GS1 DataMatrix Code is already in use in many industries (such as the pharmaceutical industry), there is enormous potential in its wider distribution in retail. New opportunities open up, especially in combination with technologies such as RFID, sensors or the Internet of Things:
Automated checkouts
Cashierless stores are no longer science fiction. Products with 2D codes could be automatically recorded when the customer leaves the store. In connection with the customer's smartphone, the payment process would take place without any waiting time.
Smart shelves
Shelves that automatically detect whether a product is still in stock are already in focus. The GS1 DataMatrix Code allows shelves to clearly record which product has been moved and how many units are still available. This creates uninterrupted transparency about the inventory.
Augmented Reality
Customers could use smartphones or AR glasses to read additional information about products in the store as soon as they pick them up or look at the code. From discount vouchers to origin information to recipe ideas – the possible applications are diverse.
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Big data analytics
The more detailed the data collected, the more insightful the analyzes will be. Artificial intelligence and machine learning can reveal patterns in purchasing behavior or potential problems. This creates a continuous improvement process in category management.
Data-driven decision making is the key to sustainable success in retail
The GS1 DataMatrix Code is much more than just a replacement for the traditional EAN barcode. Due to its higher data density and the ability to store various information in a compact form, it offers enormous potential for retail - both online and stationary. The benefits range from expanded product information and improved supply chain to customer focus and seamless omnichannel integration.
“Data-driven decision-making is the key to sustainable success in retail” – and this is exactly where the GS1 DataMatrix Code can make a decisive contribution. Both manufacturers and retailers benefit from more precise and comprehensive data, which enables them to carry out targeted category management. Ultimately, the range is optimally tailored to customer requirements, which leads to higher customer satisfaction and increased sales.
The ability to capture, analyze and act on data in real time is fundamentally changing category management. What was once based on estimates and a lot of manual work is now done with just a few scans and automated processes. Whether you are pursuing a comprehensive omnichannel concept or want to optimize individual stationary branches - the GS1 DataMatrix Code is a key to exploiting the full potential of the digital age.
More and more retailers are recognizing the relevance and switching from simple barcodes to 2D codes. This change will accelerate as soon as the first successes become visible: more precise inventory levels, less waste, more customer satisfaction. That’s why “act now to be successful tomorrow” – anyone who optimizes their category management today using the GS1 DataMatrix code will benefit in the long term. Seen in this way, this 2D matrix code is much more than a technical and functional aid. It is the driver of a new era in which data is not only collected, but actively used to offer customers a perfect shopping experience.
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