This summer, the universal product code (UPC) barcode, used by nearly all retail stores to register products, turned 50 years old. The first officially recognized use of a UPC barcode occurred on June 26, 1974, in Troy, Ohio, with the scan of a pack of Wrigley’s chewing gum. Cashier Sharon Buchannan scanned the gum for $0.67 at a Marsh Supermarket on a register built by the National Cash Register (NCR) corporation.
The widespread adoption of the UPC has contributed to the growth of international retail supply chains. Image from Adobe Stock (Licensed use)
The UPC barcode means different things to different people. For one, the barcode may be a cryptic mark indicating the price of the product. To a software-minded person, the barcode is a key in a database schema with an index of price, inventory quantity, and other salient bits of product information. To the hardware-oriented set, the UPC barcode is the target of an electro-optical system for reading and interpreting printed lines representing a 12-digit numeric value. And finally, to retailers worldwide, the UPC barcode is the solution to an otherwise untenable operational problem.
Before the Code
Anyone who has worked a retail job is likely to shutter when they hear the phrase “inventory time.” Today, it means a quarterly or yearly semi-automated check on the physical inventory to verify against the database and account for breakage and theft. Before the widespread adoption of UPC barcodes and electronic cash registers, manually “taking inventory” was the only way to keep track of product stock.
Before the UPC, it was a once-a-month or once-a-week late-night endeavor that involved everyone in the store. Tens of thousands of items had to be manually removed from store shelves, counted, hand-recorded on paper forms, and then replaced on the shelf. Following the count, the stock and purchasing folks had to tabulate sales and losses, compare stock to min/max, and reorder set points. Keep in mind that this was all happening by pencil. Spreadsheets did not yet exist.
Product pricing was just as tedious an ordeal. Price tags were applied to each individual item with a pricing gun, a label maker that would print a price number on a small sticker. Each item was priced as it was stocked on the shelf. A price change required that each product be pulled from the shelf and relabeled by hand. Operating a store was a very manual and tedious process at the time.
The Origins of the Barcode
In the mid-1960s, the National Association of Food Chains (NAFC) recognized the need to speed up the grocery checkout process. The group launched an initiative to create automated pricing and inventory tools. Their early work led to the 1966 installation of the first “barcode” style price readers in a Kroger store in Cincinnati, Ohio. The Kroger system used a bullseye pattern limited to their stores. Though it was a Kroger-only experiment, it was deemed a success, and it led to the creation of the Universal Grocery Products Identification Code (UGPIC) in 1969.
The UPC barcode as we know it today is a direct outgrowth of that work. The Uniform Grocery Code Council was formed in 1973 and, as one of their first acts, recommended the country-wide adoption of the UPC barcode for pricing and inventory control.
Anatomy of a UPC barcode. Image used courtesy of Barcode Graphics
The 12-digit code consists of a start digit, a five-digit company prefix, a five-digit item number, and a check digit. The numbers are always printed at the bottom of the code to enable manual number entry if the code lines are damaged.
Not long after its first use, the UPC went global, with the European Article Numbering Association (EAN) working in cooperation with the U.S. association. The consolidated organization GS1 is now tasked with shepherding the standards worldwide.
The UPC Code as a System
It took about 20 years for all major retailers to fully adopt the UPC barcode system. There are still a few holdouts—usually small, independently owned stores that can’t justify the cost of an electronic system. However, the scanned barcode is generally universal.
Barcode scanners use a laser, moving mirror, and photodiode to read a printed UPC barcode. Image used courtesy of Cognex
The codes are read using a laser scan system or by other optical recognition means. The single checksum digit is used to verify the accuracy of the scan. If deemed correct, the number is sent to a database and used to look up the item. The database system will return the item price to the client point of sale (POS) system and, at the same time, decrement the stored inventory quantity. Repricing is now as fast as changing a number in a database, and inventory tracking is automatic.
Toshiba Self Checkout System 7. Image used courtesy of Toshiba
Early systems were finicky and required careful scanning techniques. Even wrinkled or slightly damaged prints would require frustrating rescans or manual code entry. Today’s systems use multiple beams to enable scanning that is reliable enough for untrained customers to scan items in self-checkout registers.
The Future of UPC-Based Shopping
The UPC barcode is still evolving. Ten digits are not enough anymore; the proliferation of businesses and products is nearly exceeding the range of two five-digit numbers. Competing and non-compatible optical code systems are also popping up in many places.
GS1 has a plan for the future of barcodes for retail and commercial item identification. The next planned incarnation replaces the current one-dimensional UPC bard code with a 2D barcode based on the QR code format, called GTIN Digital Link. The GTIN Digital Link will include a web URL and a series of product- and company-specific numbers.
2D Digital Link barcode. Image used courtesy of GS1
The code will be used by both retailers and consumers. Store customers today have access to smartphone apps that can recognize UPC codes. However, accurate access to the product and store data is not always available. With the new 2D systems, manufacturers will direct consumers to product-specific web pages with all pertinent information. Stores will be able to add their “two cents” with location-specific pricing and coupon apps. Items with complex instructions or large information sets, like prescription drugs, will connect the critical information to the 2D barcode. GS1 is proposing that the transition from UPC to GTIN start in 2027, at which time they are recommending dual use of the new system along with legacy UPC.
Beyond the Barcode
A few years ago, Amazon attempted to bypass UPC codes and scanners altogether by opening a small set of checkoutless brick-and-mortar retail stores. Customers would simply place items in their carts and walk out the door when done shopping. The store had a mass set of cameras and image recognition software to track customer activity and record sales. They have since discontinued the experiment, but that doesn’t mean they or other retailers won’t try again.
There is talk of artificial intelligence (AI)-based product scanners that will recognize items without a barcode. RFID systems also promise to track items anywhere and everywhere without optics. Until then, the UPC barcode will continue to streamline and stimulate international retail supply chains.
