The humble-yet-almighty QR code

Only a couple of years ago, consumers in the West looked with bafflement at reports about the fascination of the Japanese with QR codes. Footage from a dating service, where participants searching for partners can meet each other in a reception setting, showed how pairs that hit it off exchanged their QR codes to be able to catch up later.

QR codes, which first appeared in Japan in the mid-1990s, gradually spread to other countries in Asia – most significantly, the huge Chinese market, where QR code readers are embedded in the major social media apps.

Perhaps ironically, in Europe, the QR code’s moment to shine came when the physical world was becoming far less social, during the years of Covid-19. When catering was taking its first tentative steps as the pandemic subsided, it was QR codes that enabled the adventurous to enter restaurants by replacing close contact with waiters and payment terminals with an online service.

In retrospect, this was a milestone on the road leading to the omnipresence of these pixellated black-and-white grids in the UK too. And as consumers have been reaching more readily for their smartphones to scan a QR code, it has increasingly become a customer engagement tool to be reckoned with.

The QR code as a marketing tool

One huge benefit of QR codes is that they spare users the frequently tedious task of tapping out lengthy URLS. And it’s not just consumers that benefit from this but also marketers.

Placing one on a poster or banner, where it can be comfortably scanned, will funnel people to a business’s webpage and generate leads by offering them some digital content or discount in return for contact details. But what makes QR codes especially suited to lead generation and promotion is that they can come in the company’s colours too or include a company logo.

QR codes have been a breakthrough compared to barcodes, thanks to the 3Kb of information they can store in a variety of formats, ranging from video to PDF files to text of up to 4,000 characters.

It’s the dynamic version of QR codes, however, that is the real game changer. These codes enable their owners to change where the QR code’s encoded URL leads the user, without having to generate a new code for each new destination. Dynamic QR codes can be integrated into enterprise systems too, and thereby give a boost to automation.

A creative use-case where QR codes can build a bridge between physical shops and e-commerce is when they ease the frustration of customers who have arrived at a shop after opening hours by guiding them to the business’s online iteration.

Returns are another area where QR codes can make tremendous improvements to the customer journey and its digitisation. Customers increasingly expect return policies that enable unwanted items to be returned with the help of a digital QR code that is scanned by either a locker system or a retailer in a PUDO (pick-up-drop-off) network.

In payments, such codes are also deployed to make the customer journey smoother. Scan-and-go payments, which enable customers to scan as they shop and then pay with their mobile, start and finish with QR code scans. Their role here is to take the shopper to a payment page where they can either enter payment details or use their mobile wallet to finish the transaction.

Retailers in tourist-heavy locations have also found that QR codes can generate additional revenue for them if they implement a reader and an integration to their payment system that scans the QR code on, for example, a Chinese customer’s Alipay or WeChat wallet and allows them to settle the bill with their payment method of choice.

The key to supply chain visibility

QR codes’ ability to dynamically store new snippets of time-stamped information renders them ideal for tracking goods as they proceed along the supply chain. They are more suited to the job than barcodes thanks to their error correction code (ECC) capability, which allows them to restore data if the code is dirty or damaged.

The traceability of products is instrumental to efficient inventory management, but can boost the customer experience too. Tracking down items that are out of stock at the point of purchase across all sales channels – whether digital or physical – means more items can be sold at their original price.

QR codes are also extensively used on the packaging of products where provenance plays a central role, such as food and alcoholic beverages, or where the sustainable nature of sourcing needs to be justified.

They can also be instrumental in reducing greenwashing, which will help boost the confidence of consumers in fairtrade and green products – and by extension their willingness to pay a premium to attain them. The codes can also assist environmentally conscious consumers by referring them to sites where they learn weather a particular type of packaging is recyclable in their municipality or not.

However, the fact that QR codes are editable makes them susceptible to tampering too. To keep their flexibility and fend off QR code fraud, attempts have already been made to combine them with the immutable blockchain.

By assigning hash values to QR codes, it’s possible to detect fakes by comparing the code’s hash value with the one recorded on the blockchain.

When integrated with other digital technologies, the potential of the humble QR code is endless, and, as the examples above demonstrate, retail is particularly well-positioned to make the most of it to improve efficiency and customer experience.