Why retailers need barcodes for stock control and selling online

Barcodes are vital to your future success, whether you’re running a multi-store brick-and-mortar retail business or a small eCommerce store with big ambitions.

If we humans are good at one thing, though, it’s organising information.

Say hello to the, ahem, unsexy, barcode.

It mightn’t set your pulse racing, but its importance cannot be understated whether you’re an online or physical store retailer.

Those random lines and numbers you see daily contain a treasure trove of information.

So, what makes them so popular and indispensable for retailers?

In today’s guide, we’re taking a deep dive into the little-known world of barcodes.

We’ll discuss why barcodes are essential for retailers, regardless of whether yours is a brick-and-mortar or a retail eCommerce store.

And we’ll answer some of your late-night ponderings, such as, “Is a barcode the same as a UPC code?”

Next, we’ll look at how a barcode is made up and answer your questions on whether each barcode is unique.

We’ll then go through some of the main differences between barcodes and SKUs and barcodes and QR codes.

You’ll also want to know the big fuss with barcodes, so we’ll review some of the main benefits of using them in retail.

You’ll be sipping on your coffee and wondering, “who should use barcodes?”

Good news alert, we’ll discuss that too.

Finally, we’ll explain how you can generate barcodes for retail.

So, let’s get straight into it!

What are barcodes or Universal Product Codes (UPC)?

As we touched on earlier, humans love organising things.

And nowhere is organising things more important than in retail.

After all, thousands of different products are stored, sold and sometimes even returned daily.

With this apparent need to manage our inventory in-store and online, barcodes, specifically, UPCs, have stepped up to the plate.

Ultimately, barcodes and UPCs that might appear random are information that a scanner can read.

The information usually contains specific things such as the product’s name, where it’s located, size, colour, price, weight, expiry date and date of manufacturing.

Retailers – both online and offline – use them to speed up the customer’s check-out experience while keeping track of inventory.

Is a barcode the same as a Universal Product Code (UPC)?

Kind of, yeah.

Both are used interchangeably so often that they’re practically the same thing.

Or a better analogy might be that they’re two sides of the same coin.

This leads us nicely to your next question.

What is the makeup of a barcode?

Barcodes broadly follow the same pattern.

Each product a retailer stocks needs an identifier that can be scanned quickly and accurately and rapidly read by a machine.

That identifier takes the form of lines and numbers, usually; known as a barcode.

If we break it down further, those lines you see on a barcode are, unsurprisingly, called a barcode.

UPC barcode

They’re the machine-readable visual representation of the barcode.

The UPC is the unique 12-digit number beneath those lines.

Together, both the black lines and numbers make up the barcode.

Usually, the first six digits of a barcode are a manufacturer’s unique ID number.

So, for example, the first six numbers on a barcode on an iPhone and an iPad should be the same unique, six-digit number reserved for Apple.

Another five numbers come after the first six numbers, known as an item number.

Contained within those five digits are details about that specific product.

Depending on what information you’d like, that could include price, colour, size, location, manufacturer etc.

Finally, the last number on the twelve-digit barcode is the check digit.

GS1, one of the companies that make barcodes, explains perfectly what the check digit is:

“The last digit of all fixed-length, numeric GS1 Identification Keys is a check digit that ensures the integrity of the key.”

Are barcodes unique?

Think of a barcode-like human DNA; it’s a unique identifier shared by nothing else.

Although they all look similar, they’re all unique to specific products and manufacturers.

However, this is where it gets a little confusing.

Products that are the same will have the same barcodes.

Let’s take a 42-inch LG TV, for example.

All of these would have the same barcode because the products are identical.

In contrast, a 32-inch LG TV would have a different barcode because, while it’s similar, there are noticeable differences, such as a size difference.

What is the difference between barcodes and SKUs?

As we’ve explained, barcodes are universal and created externally by companies like GS1, usually, after the product manufacturer contacts GS1.

In contrast, you and your retail team create an SKU (Stock Taking Unit) in-house.

So, why are SKUs created in-store and for retail ecommerce stores?

To help retailers better manage their inventory, improve profits, plan ahead, be more efficient and avoid stock issues.

While a barcode is made up of lines and numbers, SKUs are letters and numbers.

In addition, SKUs are relevant only to the retailer who creates them.

The best way to think of barcodes and SKUs is that barcodes are made for manufacturers, whereas SKUs are unique to you and your retail store.

scan QR code

Difference between barcodes and QR codes

Appearance-wise, QR codes and barcodes are undeniably different.

Where they were once predominately used in China, QR codes are much more mainstream in western retail outlets in 2022.

That’s thanks to the growing popularity of smartphones, which can now be used to scan a QR code.

And in terms of what they do, they’re very similar too; they both hold machine-readable information.

QR codes – or by their full title, Quick Response Codes – hold vertically and horizontally information, known as two-dimensional.

That means QR codes enjoy a considerable advantage over barcodes in that they can hold significantly more information.

Barcodes are scanned in a line, whereas QR codes add an extra dimension to include more information.

Benefits of barcodes for retailers and multichannel retailers

Barcodes provide retailers – both single-channel and multi-channel – with various benefits.

Here’s our pick of the bunch.

1. Increased productivity and efficiency.

Modern retail is competitive, and often the difference between success and failure is how productive your company is.

So, you’ll be glad to know that retailers who use barcodes will benefit from increased productivity.

That’s because barcodes speed up the selling process and allow you to access information quickly.

Instead of entering product details manually, a super-quick barcode scan achieves the same thing in a fraction of the time.

2. Removes human error.

As humans, we must hold our hands up and say we get things wrong from time to time.

We could be tired, over-worked, underpaid, or even hungry.

And while humans frequently make mistakes in retail, barcodes and scanners don’t.

As a result, you’ll have better control over stock and sales processes, knowing that they are accurate every single time.

3. Improve the checkout experience.

Modern retail is fast-paced, and customers expect a hassle-free, lightning-quick check-out experience.

And that’s just a minimum customer expectation.

Using barcodes speeds up the check-out process by eliminating the need for manual human data entry.

As an added bonus, it also makes it easy to tally up the final total a customer is expected to pay.

4. Improves stock management.

Nothing screams ‘poorly run retailer’ quite like embarrassing out of stock issues and overstocking.

Say goodbye to those two headaches; barcodes will dramatically improve your stock management.

Back in the olden days, products had a handwritten sticker that said the price.

Nowadays? A barcode contains vital product info such as name, price, size, colour, location in the warehouse, etc.

That treasure trove of information paired with your EPOS System makes it a breeze to keep on top of your stock levels, so you never run out of best-sellers again.

5. Spot and act upon emerging trends.

In this era, known as the information age, data and analytics are used to inform our decisions today and tomorrow.

And barcodes are used widely by retailers to capture what’s happening yesterday and today to inform better planning for tomorrow.

Barcodes contain vital information on how many products are sold, when they’re sold, and other helpful information.

Let’s take a hardware store as an example.

In 2019 they sold 187 BBQ sets, and in 2020 they sold 214.

In 2021 they sold 348 BBQ sets, which shows the retailer a year-on-year improvement.

Acting on the information relayed by product barcodes, that retailer is well-informed and can make a calculated decision to stock more than 400 BBQ

sets in 2022 if previous trends continue.

6. Barcodes display professionalism.

Cast your mind back to the 1990s when you went shopping.

It wasn’t uncommon to get handwritten receipts and little slips of paper confirming your order and payment.

And as we touched on earlier, instead of barcodes, handwritten stickers were on every product.

Compare that to today, where a small barcode contains all the vital information, and you can quickly see how professional a barcode is compared to old-fashioned handwritten stickers.

7. Quickly lookup products.

“Price check on aisle 12”.

How often have you visited a retail outlet, and you’re unsure of pricing or availability?
It happens all the time.

But the good news is that a barcode contains all the vital information, allowing retail employees to quickly lookup prices, warehouse location, availability and much more.

8. Barcodes are relatively inexpensive.

Retailers are being squeezed like never before.

That’s thanks in no small part to a global pandemic, and escalating energy crisis and an ever-growing, competitive eCommerce industry.

As a result, you’ll want solutions that don’t eat into your profits.

The good news is that implementing a barcode system doesn’t have to break the bank.

The cost of a barcoding system will, of course, depend on your individual needs.

That’s because a single store with 100 products will pay much less than a multi-store retailer with thousands of products.

9. Barcodes are exceptionally versatile.

When we think of barcodes, we automatically think of a retail employee scanning a barcode at the till.

But barcodes offer much more than merely a quick check-out experience.

Barcodes are extremely versatile and can hold a wide variety of essential data for your company.

You can even use them to track products and outgoing shipments.

retail barcode scanner

Who should use barcodes?

Barcodes now enjoy widespread use throughout retail in most countries globally.

But they’re not ideal for every single retailer.

If you sell many low-price products with product lines that change regularly, barcoding might not be a great fit.

However, almost every other type of retailer can benefit from implementing a barcoding system.

Indeed, if you’re selling products online through eBay and Amazon, you’ll have to ensure they have barcodes.

How to generate barcodes for your business

OK, we’ve convinced you that implementing a barcode system makes sense.

So, now what?

Well, the process is relatively straightforward.

Barcodes are generated using software, but you don’t have to worry about that.

You have 2 options, generating barcodes yourself for free, which you can learn more about here.

Or alternatively, use GS1 to help provide you with standardised barcodes for your products.

Firstly, visit the GS1 website.

Secondly, sign up to GS1 and apply for your company prefix.

Thirdly, log in to your GS1 account and create new GTINS and barcodes.

Fourthly, order your barcodes.

You cannot print them, and then add them to your POS.

Finally, you’re ready to sell!

Not sure which is the best barcode printer and scanner to buy?

Check out our barcode scanner/printer recommendations here.

Conclusion

Barcodes might not be the latest technological fad, but they’re popular amongst retailers for a reason; they work.

And they work effectively and reliably and provide retailers with indisputable benefits.

Benefits include increased productivity and efficiency, removal of human error, an improved checkout experience, and stock management improvements.

Retailers also enjoy data to help them act on emerging trends, professionalism, and an ability to quickly look up products.

Add in the fact that barcodes can be significantly cheaper than most other systems and are highly versatile, and you’ve got unequivocal confirmation that barcodes are an absolute necessity.

To make the most of your new barcoding system, you’ll need an EPOS system that enjoys just as many benefits.

Say hello to AirPOS; our retail-focused EPOS system is compatible with barcodes and helps you save time, money, and hassle.

Sign up for a free trial of AirPOS today.

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