Alibaba received a $192,000 penalty for pricing during the past two Singles’ Day sales.
2-D bar codes provide that link, giving smartphone-toting shoppers instant access to mobile web content.
A consumer walking by a GNC store may notice something intriguing in the window: a big black and white square next to a sign that reads, “The most phenomenal thing you’ll do all day.” Being a savvy smartphone owner, he whips out his phone, opens his QR code reader app, aims the smartphone camera at the black and white QR code, and waits just a second for the app to scan the image. The smartphone automatically opens up the web browser and links the consumer to a mobile web page that reads: “Congratulations, you won a free Phenom coconut water drink.” This crafty use of mobile technology has been driving shoppers into GNC stores to collect their free drinks.
And that’s only one way the consumer can interact with General Nutrition Centers Inc. via QR codes. The retailer placed codes in magazine ads this year that led to additional product information and videos on its m-commerce site, where readers could click to buy products. Store signs and banners with 2-D bar codes lead to videos promoting select products. The videos show athletic men and women in action and discussing supplements and other products. GNC hosts the videos on its m-commerce site, which accounts for 20% of the retailer’s online business. GNC’s next step: placing QR codes on individual products.
GNC customers skew young, the kind of smartphone users most inclined to try out new mobile technologies, says Jeffrey R. Hennion, executive vice president and chief branding officer at GNC.
“We’re seeing a substantial number of scans and mobile traffic,” Hennion says. “And it’s been growing.”
A bridge online
GNC is just one of the retailers that have recognized the potential of QR codes and other 2-D bar code formats to easily bring the Internet into bricks-and-mortar stores. Stores have tried to accomplish that in many ways in recent years, such as by deploying web-connected kiosks or printing out online customer reviews and tacking them onto store shelves. But it’s the proliferation of smartphones with built-in cameras that makes it a snap for the consumer to access web-based content from a poster, product package, even the side of a building: Just click to open a free scanning app, point the phone at the code, and the web content appears on the phone’s screen.
The ability for consumers to comparison shop and get more information while in stores has been a big driver of 2-D bar code adoption, says John Puterbaugh, founder and CEO of mobile marketing and technology firm Nellymoser Inc. The majority of its 100 clients use 2-D bar codes. “By putting 2-D bar codes on goods in stores, you transform a small store into a big showroom.”
At the same time, Puterbaugh notes, once a consumer is accessing the web via her smartphone she can also navigate to other sites to buy. “So there are tensions and opportunities 2-D bar codes set up,” he says. And web-only retailers and other direct marketers are moving quickly to exploit those opportunities.
2-D bar codes have been popular in Asia for a decade and in Europe for the last five years, mobile technology experts say. But it was only last year when they began to take off in the U.S. What’s made the square codes interesting is that tens of millions of U.S. consumers—78.5 million by late June, web measurement firm comScore Inc. says—now have smartphones that can access web-based content by scanning 2-D bar codes. While there are several 2-D bar code formats, the most commonly used are Quick Response (QR) and Microsoft Tag.
Consumers are starting to get acquainted with 2-D codes. In June 2011, 14 million U.S. mobile phone users—6.2% of the total number of mobile phone users—scanned a QR code on their mobile device, finds comScore. A majority of consumers who scanned codes were male (60.5%) and between the ages of 18-34 (53.4%). Scanners skew affluent, with 36.1% having a household income of $100,000 or more versus 20% of all U.S. households. The study also analyzed the source and location of QR code scanning and found that users are most likely to scan codes found in newspapers and magazines and on product packaging, and they scan while at home or in a store.
“In 2010 scanning hit an inflection point,” says Mike Wehrs, president and CEO of Scanbuy Inc., which offers the free 2-D bar code reader ScanLife and runs 2-D campaigns for retailers and other businesses. “The traffic prior to 2010 was an insignificant number. Today we’re doing over 2.5 million scans a month worldwide through our platform. 18 months ago it was 100,000 a month.”
A big part of that growth is coming from retail, as major chains like GNC, Sears Holdings Corp. and Lowes Inc. sprinkle 2-D codes liberally throughout their stores and marketing materials.
QR codes are a research tool that consumers are using to inform their purchase decisions in-store, says Imran Jooma, senior vice president of e-commerce at Sears Holdings, which features QR codes throughout its Sears stores and catalogs and operates m-commerce sites and mobile apps. Sears store shoppers can even snap a QR code for a live video chat with a Sears product expert.
“QR codes give customers peace of mind, especially when it comes to big-ticket items or more complex products,” Jooma says. “They feel really good they did the research and didn’t have to go to a lot of places to do it—just a snap of a QR code and you’re surrounded by all the information you need.”