The Post-Covid Rise Of QR Codes In US Retail And The Retailers That Use Them

Despite wide-scale adoption of QR codes in international markets, most notably China, QR Codes have struggled to gain adoption in the US, until now. Covid-19 has been a great accelerator of retail and technology trends, and QR code adoption is accelerating as well. An estimated 11 million households will scan a QR Code in 2020 in the USA alone, up from 9.6 million, according to Statistica, but that prediction was before Covid-19 hit. In 2019, user growth was 28% and usage growth was 35% according to Blue Bite. What will it end up being in 2020 post-Covid and how are retailers using QR codes to their advantage?

Early QR Code Friction Wasn’t Worth Limited Reward

Initially, QR codes faced limited adoption because you needed a special QR code reader app and the implementations were horrid. While Apple fixed the former by natively supporting QR codes in their photo app, the latter is only beginning to be addressed. Initially, retailers and brands used QR codes to lead to basic promotional microsites or even worse, website home pages. Shoppers were quickly turned off when the payoff wasn’t worth the trouble. QR code adoption suffered greatly from this initial, negative impression for several years. Here are some the articles highlighting there initial failures:

The Rise Of QR Codes For Contactless Payments And Loyalty

QR codes were first a way to integrate from signage to a mobile phone, but interestingly, their first mass application was integrating from the mobile phone to a terminal in payments. "There is definitely more interest in QR codes as an addition to NFC for contactless payments, driven in large part by the movement to contactless from the pandemic," Thad Peterson, senior analyst at the Aite Group. The largest QR Code payment companies in North America are Apple Pay, PayPal, and Amazon Pay. (Global Web Index, 2019)

Loyalty programs and payments used QR codes on the mobile phone to identify the individual on the loyalty account or payment system. In China and Japan, for example, QR codes processed $1.65 trillion in purchases in 2016 alone.

Retailers that use QR codes include:

QR Codes For Product Information And Marketing Apps

Penetration of QR Codes Retail By Use Case

More recently, QR codes have been proliferating at retail for providing product information at the shelf. 6 point print and limited packaging makes product exploration and comparison difficult at brick-and-mortar retail. In fact, it is estimated that by 2023, the smart packaging market will be work a staggering $7.56 billion. The US even passed a law requiring QR codes for nutritional information and GMO ingredients on packaged foods.

QR codes are one way to bridge the gap between physical exploration and digital content. Best Buy, Home Depot and Staples have adopted this approach, but it is not the primary feature of retail displays or even their labels.

Printing out labels can be quite expensive, which is why we have seen interactive smart shelves that include QR codes along with pricing and promotions. And this is where digital has a definitive advantage to print labels and simple QR codes.

This is where Perch by Raydiant shines by focusing on merging the best of physical retail and digital commerce and content consumption, with larger format media like videos that capture attention and engage customers.

Macy’s uses Perch by Raydiant in their award-winning Fragrance Bar, including the use of QR codes to provide additional information, allow for cashierless checkout and to get credit for loyalty rewards.

Nike and Diesel have begun putting individual QR codes on their sneakers and apparel, which provides both interactive content and authentication from fraud. Studies show that 65% of consumers in China think QR codes on packaging instills trust.

Ralph Lauren uses QR codes on apparel to provide styling advice for the garment, providing ongoing resource post-sale.

Zara uses QR codes on receipts and also for collection points.

QR Code Usage In Covid Times

QR codes are being increasingly used in new applications in reaction to the desire to reduce Covid-19 spread from person-to-person interaction. For exa QR codes have proliferated at restaurants to prevent the sharing of menus. Shared print collateral in stacks are now being replaced with QR codes, as well. The Vancouver Gallery has replaced its Visitor’s Guide with a QR code for example.

Coca-Cola’s just-announced software update to its Freestyle beverage dispensers use a QR code to select and dispense their drinks without customers having to use the touchscreen on the machine.

Rugby fans will be encouraged to scan a QR code to provide identities for contact tracing to enable greater safety at events. South Korea has a similar QR code system for tracking people who go out at bars and similar methods are proposed for workplace safety.

Zara has gotten creative with its window displays by integrating large QR codes in decorative designs, which can be seen on the left.

QR codes have surprising flexibility in design, so much that designers are creating their own branded QR code designs that work natively. For example, Louis Vuitton has worked with Japanese designers to create this fancy looking QR code to the left.

All this means that QR code adoption is likely to soar, with consumers more comfortable with the technology than ever, leading to greater engagement rates and ROIs across the board.

QR Code Learnings From The China Market

Retail QR Code penetration by country

There’s a lot to learn about the power of QR codes from China. QR codes underpin the most vastly used mobile payments technology in the world including Alipay and Wechat. In China, they also use QR codes for dating at bars, speed up cafeteria lines, pay for transit, monitor health and even reducing toilet paper usage. QR codes are a means of authenticating a user with independent devices, from point-of-sales, vending machines, transit gates or health monitoring devices like scales and blood pressure machines. In the US, Paypal, WhatsApp, Venmo, Facebook Messenger, SnapChat, Instagram and others use QR codes to identify users. Expect QR codes to proliferate even further for identity.

40% of global QR code coupon redemption comes from Far East and China. In China, 50% of users scan QR Codes several times a week (Packaging Insights). Once consumers begin using QR codes and get over the initial adoption, they rapidly become used frequently. Once a QR code has been scanned, you can collect first party data, enable enhance tracking across the customer lifecycle, and measure real world behavior in new ways. QR codes may seem simple, and they are, but they also unlock a whole new world of interaction data and value.

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