Reducing food waste is key to sustainable development and fighting climate change. As such, the UN Sustainable Development Goals include a target to halve food waste by 2030[ii] – but meeting this goal will require significant investment at all levels of the value chain.
In this blog, we will discuss the role that 2D codes could play in helping to cut food waste at the consumer and retail level by providing more information on the location and age of food products.
How to optimise inventory management with the help of 2D codes
In our previous blogs, we have discussed the role of 2D codes in helping brands to gain more insight into their products and improving customer experience by providing more information on goods and services – but the benefits of 2D codes do not stop there.
Unique and batch-level 2D codes can be embedded with information to link physical products to their supply chains, allowing brands to collect and share data, track products, and manage recalls.
While other connective technologies, including RFID tags, can offer many of the same benefits, 2D codes are one of the most practical solutions available today. Creating and printing 2D codes is cheap and easy, and the technology required for scanning and accessing data is readily available and well-established.
At the retail level, including product expiration data within 2D codes can provide a solution for improving inventory management, enabling retailers to track the quantity of sellable stock on the shop floor and in the warehouse and to remove items from shelves that are past their expiration date.
Inventory management can be tedious and time-consuming, but with the help of 2D codes, it can be done faster and more efficiently. It also allows businesses to dynamically adjust the price of specific batches of products – explored more in the sections below.
What is dynamic pricing?
Dynamic pricing is a pricing strategy designed to respond to changes in the market – also known as algorithmic pricing – it entails using an algorithm to calculate the price for a product or service.
Dynamic pricing is often used in ecommerce, with companies lowering prices when demand is low and raising prices when demand is high. It can also be used to tempt consumers to buy products or services they have viewed but not bought, with a price discount applied to encourage a sale.
In stores where 2D codes are used for stock management and at the point of sale (POS), dynamic pricing systems can be used to encourage consumers to buy products nearing their expiration date. While a standard, linear barcode will only allow a POS system to retrieve a universal product code (UPC), a 2D code can link to much more granular product information, allowing retailers to adjust prices for specific product batches.
Including batch-level data within scannable POS codes allows retailers to update the prices for specific batches to incentivise purchasing. It’s a win-win from a sustainability, and a profitability perspective – retailers reduce food waste by selling products instead of throwing them away, while boosting profit margins.
In recent years, several retailers – such as Woolworths in Australia[iii], and Meny in Norway and Denmark[iv] – have trialled dynamic pricing models through date-containing 2D codes on own-brand produce. Third-party providers have also emerged to offer dynamic pricing infrastructure, including shelf labels and POS systems – examples include Wasteless. This Israeli start-up uses expiry dates and stock data to calculate the optimal product price in real time, with product data embedded within a 2D code.
What is the benefit for consumers?
Including additional information within 2D codes can also benefit the end consumer. With dynamic pricing models, like those described above, consumers can benefit from more competitive pricing and enjoy discounts on items with a reduced shelf life.
In addition, research suggests that consumers are becoming more open to the idea of scanning 2D codes to access product information. A recent study from Cornell University looked at replacing date codes on milk with scannable QR codes that would provide a best before date when scanned by a smartphone. During the two-month study, over 60% of customers purchased milk with the QR code rather than a traditional best before date[v].
Equipping products with 2D codes also opens opportunities for further internet of things applications and integration into smart home systems. Smart fridges and personal assistants equipped with technology to download information on products from a scannable 2D code – or from shopping data obtained directly from the retailer – could use the data to provide a household inventory, meal plans, and waste-saving tips.
The above may sound futuristic, but innovative tech companies are already releasing smart home systems to help consumers fight food waste. In 2019, Samsung launched the Family Hub, a smart fridge with a built-in internal camera designed to pick up the best before date from fresh produce and advise when food is approaching its expiration.
Looking to the future
There’s no escaping the benefit and relevance of 2D codes – in everything from manufacturing execution, logistics and traceability, retail stock management, and consumer awareness. If you are yet to think about the role that 2D codes could have in your business, the time to start is now – your competitors are likely already moving in this direction.
At Domino, we are committed to helping brands to prepare for a future where all products and packaging come equipped with a 2D code. Please get in touch to find out more or to speak to an expert about the right solution for your specific requirements.