Retail Applications of QR Codes
Last Updated on Thursday, 8 September 2011 11:46 Written by firstname.lastname@example.org Thursday, 8 September 2011 11:46
We’re often asked how can I use QR codes. Here’s a great article about QR code applications in the retail market (see below). Relyco provides a wide range of substrates (paper products) to help retailers promote their products and services with QR codes. These type of products include:
- Pressure seal self-mailer forms for marketing promos. Simply add a QR code for more information, special offers, online coupons, etc.
- Waterproof laser paper can be used to create signage with QR codes right on your own color lase printer as you need them. Keep offers and info fresh
- Custom personalized digital packaging and promotional items. Leverage the power of variable data printing to send/provide valued customers special offer offers. Print unique and personal QR codes right on the packaging
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.”
Like GNC, Lowe’s Inc. is including 2-D bar codes on signs in stores and in print materials, including its circulars and its Creative Ideas magazine. Instead of using QR codes, Lowe’s uses codes based on Microsoft Corp.’s Tag format. Tags are prominent in the nursery departments at Lowe’s, appearing on the cards that go into individual plants. These Tags lead to information on how to care for the plants.
“If you follow how modern customers shop, there is a fuzzy line between channels,” says Gihad Jawhar, vice president of Lowes.com. “The information customers gather from store associates, packaging, the web and the social channel all blends together in their minds. Retailers need to make that easier for them to do. One of the best ways to do this is through 2-D bar codes, to add value to the customer’s shopping experience and facilitate cross-channel research to help make a purchase decision.”
On various in-store signs Lowe’s features Tags that lead to mobile-optimized product selectors to help shoppers narrow down their product options based on brands and available features. Lowe’s targets its 2-D bar codes effort at providing information that keeps customers shopping, not enabling commerce itself.
“They are there in a store to make shopping easier—2-D bar codes are there to facilitate the customer experience, not to focus on driving sales in one channel or another, but to keep the customer within Lowe’s. That is their primary purpose,” Jawhar says. He declines to give specific figures but says the 2-D bar codes “are constantly being used.”
There is no cost to consumers to scan 2-D bar codes; several free scanning apps are available in all the major app stores. But the challenge retailers face is to educate shoppers about how and why they should use those apps to scan 2-D codes.
“One of the mistakes we see today is a lot of naked codes with no call to action, no instructions. They do very poorly,” says Bill McQuain, director of business development, start-up business group, at Microsoft Corp., which launched its Tags in January 2009. “We encourage our customers to have a strong call to action. What will happen when I scan this, and also instructions on where to get a reader app.”
McQuain suggests retailers think creatively about getting shoppers to download a reader, if they don’t already have one, as soon as they enter a store.
“When you first walk in a store there should be a display that introduces the technology,” he advises. “A contest to get people to engage early on. Contests create a lot of buzz and engagement. Scan the Tag at the entry for a chance to win a $100 shopping card. That builds awareness immediately and then when they see the Tags throughout the store they’ll have the reader and they will be able to engage.”
Further, many retailers using 2-D codes and mobile experts say it’s important to have at least a little bit of instructional text accompany each code.
Consumer brand manufacturer Mister Landscaper, which uses 2-D bar code services provider Augme Technologies, has been placing QR codes on its micro-irrigation product packages, leading consumers in stores to mobile-optimized pages of videos, instruction manuals, tips and ways to contact the company. It doesn’t take any chances when it comes to store shoppers and 2-D codes. Accompanying its codes is a patch of text that informs them on what to do and how to do it.
“Augme was really insistent we put this on everything,” says Sam Thayer, CEO of Mister Landscaper. “We thought it was ridiculous to begin with, taking up space on the packaging. Now that we’ve done it we know it was the right thing to do because there still are a ton of people who don’t know what a QR code is. Maybe three or four years down the road we won’t have to take up as much of the packaging with that text.”
Mister Landscaper sales are up this season, and Thayer says he attributes some of the growth to QR codes. Augme analytics have shown significant numbers of scans at locations throughout the U.S., Thayer reports, and the scans align with store sales.
82% of customers who scanned a QR code to watch a video also watched videos on additional Mister Landscaper products, Augme reports. 42% of consumers who did at least one scan used the mobile-optimized site’s instruction manual page and 40% viewed the how-to video page, which suggests customers are not only scanning QR codes in stores but also at home when they need help installing or using a product.
E-retailers can benefit
As important as these codes can be in stores, it’s not just store retailers and consumer brand manufacturers that can play the 2-D bar code game. Web-only merchants and direct marketers can use 2-D codes in unique ways to drive more business to web and mobile commerce.
A prime example is online marketplace operator eBay Inc., whose RedLaser 2-D bar code reader app has been downloaded 12 million times. It’s not letting the fact that it has no stores stand in the way of reaping QR code rewards. Instead, eBay has placed QR codes on signs and other materials at various racing and automobile events to promote its eBay Motors mobile app, which has the RedLaser scanner built in. (Any retailer can build a free 2-D bar code scanner into its app.) The codes lead to mobile web content about the events, GPS-based maps for the events, and links to download the eBay Motors app if they’re not already using it.
The merchant wants car enthusiasts to think eBay when they think cars. The eBay Motors app serves as a guide for each auto event, giving consumers extensive information and helping them navigate the shows. This creates a strong tie between eBay and customers, eBay says, that is valuable to the merchant.
“We’ve done NASCAR, various car shows in California, having eBay be a companion with you at these car-related events,” says Steve Yankovich, vice president of platform business solutions and mobile. “When you want to go buy a car or a part, we’re more likely to get that transaction because we’ve been providing you all this other value as well.”
Paper coupon to mobile web
Another example of a non-store retail application of QR codes comes from coupon kingpin Valpak, source of the familiar blue envelope mailed to 40 million households every month. Valpak has perhaps the biggest implementation of QR codes to date. In July it began placing on the outside of its envelopes a QR code purchased by an advertiser.
The first round of 40 million was purchased by cable network TNT, promoting one of its new original shows. A scan of the QR code led to a promotional video, followed by a mobile web page on which consumers could enter to win a trip to New York.
Such sweepstakes are becoming a popular QR code tool, as they drive brand engagement, reap consumer data such as e-mail addresses, and can ultimately lead to an m-commerce site where consumers can make purchases.
Valpak says by October it will have 160 million QR codes in consumers’ hands. While it declines to reveal the total number of scans for its July debut, it says such totals do not provide a full measure of what 2-D bar codes offer.
“Sometimes with cutting-edge technology, numbers are not really the whole story,” says Michael Vivio, president of Cox Target Media, which operates Valpak Direct Marketing. “What you have is someone who is actively sitting down to watch a promotion and enter a contest, so you have a very engaged customer there. You don’t necessarily measure this in bulk numbers. We can achieve bulk numbers, but we can achieve very high engagement with the best consumers who are digitally aware and a great demographic.”
While the implementations may be different, pioneers in 2-D bar codes all agree that there is nothing quite like the codes for connecting stores and printed materials to the mobile web, and that 2-D codes greatly enhance in-store and catalog shopping.
The Nielsen Co. says by year’s end half of all mobile phones in use will be smartphones. And one need only look around to see that 2-D bar code use is on the rise.
Smart retailers are not just planning but acting today to meet the demands of the smartphone shopper who wants plenty of information to make a purchase decision anywhere, anytime. These 2-D bar codes may prove especially critical for bricks-and-mortar stores that can use the codes to deliver sale-cinching content and keep shoppers from looking around further, whether at competitors’ stores or online.