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Price codes struggle with going obsolete

Headshot for Richard Smoley.

Once in the ‘80s, I saw a magazine for the price code industry. At the time it amazed me that there should be such a thing, but there it was, complete with an editorial denying that price codes would lead to something Orwellian. (Quaint now in days when people are wondering if with Alexa, they have purchased a domestic spy.)

Over 30 years later, price codes are still with us. Nearly every pear a consumer buys has a little price code sticker to show the cash register that he or she is buying the expensive organic kind instead of the cheaper conventional kind. But do price codes have a future?

A recent webinar hosted by RetailWire addressed this question. The answer seems to be yes—in the short run. At the same time, both retailers and consumers will be expecting more from those little stickers than they are now.

The price code was invented by the grocery industry. Fifty years ago, every item in a supermarket was labeled with a little price sticker. Produce was an exception: there wasn’t much variety in those days, so a clerk didn’t have to do much thinking to recognize a bunch of bananas, weigh it, and type in the price per pound.

In 1973, leaders of the grocery industry got together and adopted a universal bar code that could improve productivity, price accuracy, and inventory control, observes Nick Tabet, vice president of product marketing for Datalogic.

For produce, the Price Lookup Number (PLU) is usually a little sticker with a four or five digit code. You can read more about the background of this system here.

Today the price code is facing some new demands. In the first place, federally mandated requirements will force food manufacturers to add nutritional information for products by 2021. Counterfeiting—copying a price code from a cheaper item and putting it on a more expensive one—remains a problem. Another pressure comes from the consumer side: customers are demanding to know more about where a product comes from and what it contains. In a poll conducted for the webinar, 90% of respondents said it was likely that consumers would soon expect to use an app to trace a product’s origins.

Heidi Dethloff, vice president of Digimarc, presents her company’s alternative. Digimarc, which her company touts as “the Barcode of Everything.” This system prints an invisible price code repeatedly over a product’s box. This solves a couple of problems: (1) it doesn’t displace the item’s brand logo or other necessary information; and (2) multiple price codes mean that at least one of them will be read even if some are unreadable. Other benefits include reduced counterfeiting, faster checkouts, and even sustainability: the product’s recycling information can be incorporated as well. The new code can also provide more information to the consumer than fits on the package.

In the long run, the price code is probably a transitional technology. Amazon’s Go stores suggest a likely direction the industry will go in: image recognition. You go into the store, and the technology recognizes both you and the things you’re buying, so you can leave the store having paid without any checkout at all. (Of course, you have to have the app.)

The chief obstacle to this technology? The cost of implementation, which is now $25 per square foot, according to Tabet.

The webinar didn’t address issues relating to the produce industry, such as the nuisance of stickers. The price code on the side of a cereal box doesn’t cause problems for consumers, but that’s not always true with produce: you have to peel a sticker off an apple before you can eat it, and if you’re eating a pear, you will probably damage the fruit. And stickers are often hard to peel off.

SPAR, an Austrian network of retailers and wholesalers, has introduced one possible wave of the future: laser labeling, which it has already applied to its mangoes to distinguish the conventional from the organic product.

Spar CEO Gerhard Drexel says, “This saves thousands of stickers and films every day that were previously required for the prescribed separation.”

Will this process work industrywide? The price code on a box of Pokémon cards probably won’t change much from factory to purchase, but that might not be true for a piece of fruit, especially the softer kind. If an item shrinks or changes in transit, will the laser label hold up?

Whatever the answer is, it usually comes back to the same thing: the solution to any problem usually creates a whole new set of problems of its own.


Richard Smoley, editor for Blue Book Services, Inc., has more than 40 years of experience in magazine writing and editing, and is the former managing editor of California Farmer magazine. A graduate of Harvard and Oxford universities, he has published eleven books.