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  1. February 2019

  2. QR codes: rebooting retail

    20 February 2019
    How seemingly out-dated technology is now transforming the way retailers configure their stores and shoppers pay for goods.
    It’s been 25 years since QR (Quick Response) codes were first introduced to the world - the scannable graphics that have featured on virtually everything from boarding passes, magazines and food products to social media - connecting users to video content, websites and product information. Arguably born ahead of its time, the technology quickly gained a somewhat poor reputation amongst users when it was initially introduced, with reports of links to inactive websites or frustrations at additional download requirements.  

     Fast forward to today, and the QR code is enjoying a definite resurgence, with 2018 research from GlobalWebIndex indicating that twice as many respondents in Europe and North America scanned a QR code in Q3 2018 compared with Q3 2015. The driver behind its revival lies within its adoption by social media/payment giants WeChat, SnapChat and AliPay, as well as new found ease of use following the launch of Apple’s iOS 11, which incorporates a native QR code reader built into the camera. 

    The retail industry in particular has embraced the use of smartphone scanning, with fashion brands and QR codes proving to be a match made in heaven. Fashion retailer Zara recently added QR codes to their clothing labels, providing a direct link online to order or obtain information on sizes, colours and manufacturing. During their January sale campaign, QR codes adorned Zara shop fronts enabled consumers to link to sale items ready for order online without the need to enter the shop. Taking this one step further, the brand unveiled its new-look digital store concept at Westfield Stratford City last year, where amongst other features, a robotic arm collects and organises packages, and delivers products in seconds following the scanning of a personal QR code.

    In the international grocery sector, retailers have taken to combining elements of online and offline shopping to create the ultimate seamless in-store experience. Chinese e-commerce giant Alibaba has done just this in their Hema store concept, with customers able to scan QR codes on food products to get information, including the exact date items were harvested, sourced and delivered. As a result of its popularity, Alibaba is rapidly expanding Hema throughout China. Amazon’s latest entrance into the grocery market ‘Amazon Go’ also relies on the use of a personalised QR profile to register users on entry/exit. On the European side, Sainsbury’s recently trialed their first till-free lane in Clapham, London, where QR codes are used to facilitate the payment of goods. 

    Retail, while being about experience, is also all about margins and any development in technology that reduces the cost of physical retailing is an important one for operators. The integration of QR codes both streamlines the shopper’s in-store experience and reduces the retailer’s overheads with fewer people required to staff a store. 

    The term ‘quick response’ now lives up to its name, and with Google Pay, Barclays PingIt and many others developing QR payment systems, it seems likely that we will see the widespread adoption of this payment method across the UK. 

    The convergence of physical and digital worlds is continuing apace and we expect the integration of QR codes to play a major role in disrupting the way we interact in-store, online and in more informal retail environments.

    Author:

    Georgie Griffiths
    Surveyor Retail Capital Markets