Barcode : Definition, Complete Guide & Solutions

barcode definition and complete guide

The barcode is a traceability system used by companies in all sectors. 

In this article, we will explain exactly what these devices are used for, how they work and their usefulness in a business context.

Definition of a barcode

The barcode allows the display of data, readable by a machine. This data is materialized by the bars, which are the graphic transcription of numbers. This symbol therefore allows the automatic entry of data each time the scanned article is read.

The code is materialized by a series of 13 digits and is called Global Trade Item Number (GTIN). Barcodes are all around us, on every product we buy in a shop: food products, clothes, electronic products, etc.

The origins of the barcode

In 1952, the first patent concerning barcodes was filed by two Americans: Norman Joseph Woodland and Bernard Silver. These two engineers were looking for a solution to automate the registration of manufacturers’ products. To do this, the inventors had the idea of combining the film sound system with Morse code.

To translate these black bars and white spaces of information, the code must be scanned with a light. It was not until 20 years of technological development later that a technology could be developed and used.

It was in the early 1970s that the usefulness of the barcode became apparent. They were used in supermarkets to automate checkout work. This is the task we all still know today.

For the record, the first product with a barcode to be scanned at the checkout was a packet of Wrigley’s chewing gum. This happened in 1974 in Ohio.

The simplicity of use is what explains the success of the barcode and its survival over time. It can also be explained by its low production cost, its universality, the time saving it represents, and its reliability.

What is the purpose of a barcode?

The GTIN code, translated into a barcode, is primarily used to identify a product in circulation in the economy. Thanks to this unique coding, it is possible to know everything about a product: its composition, its country of origin, its manufacturer, etc.

This is not the only use of the barcode, which has been able to stand out in the eyes of retailers, fulfilling a number of tasks. This has made it indispensable for good business management, in particular. 

Identification is the first step in a traceability system, and automatic identification makes it possible to know everything about a product and to monitor and manage the flows and stocks of a company.

What are the advantages of barcodes?

The barcode is a standard in today’s economic and commercial industry. This is due to the number of advantages that this type of identification offers:

Time saving for the consumer

When the barcode was first introduced to the retail industry, it allowed consumers to spend less time at the checkout by reducing queues. As a result, supermarket footfall soared and sales volumes increased, resulting in lower prices for the end consumer.

Supermarkets, offering a large quantity of products for sale, have benefited from the introduction and use of barcodes. Smaller retailers, distributing a smaller quantity of products, did not initially favour these codes, as it was not profitable for them in the short term. Supermarkets were particularly successful at this time, encouraging consumers to go to the supermarkets, saving them time.

In addition to being more fluid, the checkout process is also more reliable, as the consumer gains confidence.

Better management of product flows and stocks

Whether on a small or large scale, barcoding is the most efficient and reliable method for an optimal stock management.

Using this method allows for automated, highly accurate and fast (even instantaneous) stock tracking. Similarly, when preparing orders and creating the accompanying documents, barcoding saves valuable time.

This then provides increased visibility of stock levels, making adjustments where necessary. Products are organised and tracked automatically, eliminating manual entry errors. Similarly for new SKUs, it has become easier to manage a continuous flow of new products.

Replenishment is also quicker and diversification of supply is easier, which was previously physically impossible.

Product traceability

For retailers who buy their products from different suppliers, this allows them to know which products they are buying. Moreover, at a time when consumers are generally distrustful of manufacturers, barcodes can help them control what they buy.

The fight against fraud

Each time a product code is passed through the checkout, it is directly and automatically recorded as a product sold. Such a system helps to avoid potential fraud.

Loyalty building

In addition to all the advantages already mentioned, the arrival of the barcode in commerce has led to the development and popularisation of loyalty cards. These have led to the introduction of the use of statistical data analysing consumer preferences.

What are the disadvantages of barcoding?

Although barcoding is a very efficient and beneficial system, it is as infallible as any other method of stock tracking.

Barcodes can only be read by a dedicated barcode reader, which can be a significant investment for small retailers with other priorities.

In addition, the storage of information is still limited.

What are the different types of barcode?

There are two types of barcode:

  • One-dimensional (1D) barcodes;
  • Two-dimensional (2D) barcodes.

1D barcodes are affixed directly to product packaging. 2D barcodes are referred to as QR codes or Datamatrix.

How to get a barcode?

To generate your barcodes, you can use GS1 and its CodeOnline tool. 

How to read and scan a barcode?

Barcodes are decipherable by means of a linear optical reading using a laser beam. This means that a scanner, known as a “shower head” in everyday language, must be used. This means that the identification is automatic and immediately results in the price of the article being taken into account, as well as computerised stock management.

Thanks to the numbers written under the barcode, certain information is made available without scanning a code, especially for the consumer. The most common codes are used worldwide and cover almost all consumer goods. As the name suggests, the GTIN 13 code is composed of 13 digits, which designate :

  • The first 2 or 3 numbers refer to the country of manufacture of the product. For example, after a simple Google search, you can easily find the country of origin of the product in question. Here are some of them: 500 to 509 United Kingdom, 000 to 019 USA, 300 to 379 France, 690 to 699 China, 840 to 849 Spain, … However, it is important to bear in mind that these numbers correspond to the country for which the company is a member of the GS1 System. It is therefore not necessarily the country of production that is indicated, but the location of one of the company’s head offices;
  • The following digits correspond to the company prefix assigned by GS1;
  • The following digits correspond to the reference (or product code party) assigned by the trade mark owner;
  • The last digit is a check digit to verify that the barcode is valid.

More and more smartphone applications are being developed and made available to allow consumers to scan and read the barcodes of the products in their hands. By scanning these codes with their phones, consumers can access additional information about the product.

For example, the Yuka app rates the quality of food and cosmetics out of 100 to provide health information. The consumer simply downloads the app to their phone, and scans. Thanks to this, they can, for example, find out about the nutritional qualities of the product : salt, sugar content, etc.

Finally, this code, which used to be used primarily by companies seeking to optimise their productivity and stock management, is now also used by consumers, who can check the composition of the products they buy / may buy at any time.

Where to place a barcode?

To know how to print these codes, you need to view your product. Do you want to place your code directly on the product, like on bottles or jars? Or do you want to place your barcode on a label, like on textile products?

The label is a classic format, involving the printing of your code in rectangular format. However, depending on the shape and material of the product, you can be innovative and original with staged barcodes.

The use of barcodes in e-commerce

After a long period of non-obligation for E-retailers, the declaration of a GTIN code is becoming essential for selling online, regardless of the channel chosen.

In the E-commerce sector, especially on marketplaces, having products with a GTIN code is mandatory. This allows you to gain visibility on them.

According to the GS1 organisation, 0.35% of GTIN codes are incorrect. Although some e-retailers neglect these codes, they do have an impact on their business. Indeed, Google and Amazon require the presence of these barcodes in the catalogue. If this is not the case, the referencing of the products concerned is degraded. Conversely, the more information you provide, the better you will be referenced, thus influencing your potential sales.

This information is particularly relevant when we know that 90% of search traffic comes from Google and that 28% of Internet users search directly for the desired products on Amazon’s marketplace. According to Google, product listings with a GTIN code have a 40% higher click-through rate, generating 20% more sales.

In addition, if you enter a product’s GTIN code on a marketplace, it provides you with information about the product. This allows you to expand the listing with new information and photos, for example, saving you time and credibility.

Thanks to your quality product catalogue and customer reviews, marketplaces can recommend your products in the additional sales modules.

Barcodes then allow you to manage the different information of your products, their stocks and gain visibility on your distribution channels.


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ECN Team
E-Commerce Nation is The 1st B2B Web Media about E-Commerce in Europe. The team of E-Commerce Explorers help businesses to reach new potential market through delivering useful content. Let us know in comment if you enjoyed this content.