In this article, learn about:
How 2D barcodes improve POS speed, inventory accuracy, and customer engagement.
RFID’s ability to enable real-time tracking, omnichannel fulfillment, and frictionless checkout.
The unique opportunities (and challenges) that come with both technologies.
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The retail industry is being tested like never before. Consumer demand is unpredictable, supply networks are stretched thin, and every shelf — physical or digital — is under pressure to perform. For retailers, agility has become a competitive advantage; for merchants, precision has become survival.
That’s why technologies like RFID and 2D barcodes are having a resurgence — not as compliance checkboxes, but as catalysts for resilience. They give retailers and suppliers shared visibility at the speed of the market, bridging the gap between what’s planned and what’s actually happening on the floor, in the warehouse, or in transit.
- For supply chain leaders, RFID and 2D barcodes unlock near real-time accuracy and automation — the foundation for faster replenishment, fewer disruptions, and measurable improvement in fill rate and OTIF. With a single source of truth between retailers and suppliers, every detection becomes a chance to recover cost, prevent waste, and build trust.
- For merchandising teams, they open a new era of item-level insight and consumer engagement — every scan becomes a source of truth for inventory, authenticity, and storytelling. The same data that drives traceability also drives smarter pricing, faster assortment pivots, and healthier margins.
As the 2027 Sunrise deadline approaches, the industry is at an inflection point. Those who view RFID and 2D adoption as more than a system upgrade — as a strategy for agility and trust — will not just comply with new standards; they’ll lead with new capabilities.
Because in today’s retail, resilience isn’t built by reacting faster. It’s built by seeing sooner.
Why Now?
The retail landscape evolves at a relentless pace, often without warning. Today, however, retailers have a rare opportunity to prepare in advance with 2D barcodes. By 2027, the global standards body GS1 will require all retailers to have systems capable of scanning and reading 2D barcodes; this initiative is already underway with retail giants Walmart and Amazon, as well as big brands like PepsiCo and P&G.
Together with RFID technology, 2D barcodes are transforming how retailers operate. With 93% of retailers already leveraging RFID, many are only beginning to unlock its full potential for driving smarter, data-informed decisions.
This overview highlights the tangible advantages of these transformative technologies, why they matter, and how to implement them effectively to strengthen your retail strategy. If you're a supplier, this article can help you understand the why behind retailers' 2D barcode and RFID compliance rules.
Related Reading: The Digital Need: Why 1D Barcodes Are Getting Replaced
Important Terms
Before diving into how RFID and 2D barcodes are utilized, here is a short list defining some key terms.
2D Barcode – Stores data in two dimensions (QR Codes, GS1 DataMatrix), holding much more info than 1D barcodes for traceability and engagement.
2D Imaging Scanners – Camera-based scanners read 2D barcodes from any angle, replacing traditional 1D laser scanners.
AI (GS1 Application Identifier) – Numeric codes that define the meaning of data in a barcode, like batch, expiration date, or serial number.
Dual-marking – During transition, products carry both linear and 2D barcodes, placed carefully to avoid double scans.
Dynamic Data – Real-time or condition-based info (serial numbers, expiration dates) is important for traceability and recalls.
GS1 Digital Link URI syntax – Connects 2D barcodes to web content (coupons, safety alerts) for enhanced consumer engagement.
GS1 element string syntax – Data format using AIs in barcodes for traceability and compliance without web connectivity.
GTIN (Global Trade Item Number) – Unique product identifier essential for inventory, POS, and barcode encoding.
HRI (Human Readable Interpretation) – Text printed alongside barcodes for manual entry if scanning fails.
IPM (Items Per Minute) – Measures scanning speed at POS; 40–70 IPM is needed for efficient 2D scanning.
Point-of-Sale (POS) – Systems that process sales transactions are required to read 2D barcodes by 2027.
Restricted Circulation Numbers (RCN) – Old internal product numbers that can’t use GS1 AIs; must migrate to GTINs.
Resolver – Service linking a GS1 Digital Link barcode to dynamic info for consumers, staff, or regulators.
Sunrise 2027 – GS1 initiative requiring POS systems to read 1D and 2D GTINs by the end of 2027, often needing upgrades.
Strategic Opportunities for Retailers Implementing 2D Barcodes
The transition to 2D barcodes presents numerous advantages for retailers, fundamentally enabling a digital transformation of their operations and customer experiences. However, this implementation also involves significant initial challenges and costs, particularly when upgrading infrastructure.
Below, we've outlined some of the benefits that 2D barcode capabilities offer, so retailers can weigh the value of implementing these critical compliance standards early.
Operational Efficiency and Accuracy at Point-of-Sale (POS)
Retailers know that operational efficiency matters. When companies generate the highest quality services with the least time, money, and labor, it helps generate revenue and increase profits.
Retailers are turning to 2D barcodes for the following reasons:
Faster and Accurate Transaction Time: Retailers know that slow checkouts and transaction times mean lost dollars (just look at the checkout speed at Aldi). A 2D barcode scan shows pricing, promotional details, and inventory data. This rich data can still meet the retail productivity rate of 40 to 70 items per minute (IPM), a win/win for customers and retailers.
Support for Additional Data: Unlike the EAN/UPC family of barcodes, 2D barcodes can hold significantly more data, like the product's expiration date, batch/lot number, serial number, and weight. Scanning this extra information helps stores and suppliers work faster and ensures everything is correct from the warehouse to the checkout.
Streamlined Processes for Variable Measure Items:In-store items like deli or bakery products can use 2D barcodes to encode GTIN plus weight and price, replacing old RCNs that couldn't hold extra details like expiration or batch numbers.
Inventory Management and Waste Reduction
2D barcodes can address inventory and waste challenges that traditional linear barcodes lack the capabilities for.
Enhanced Inventory Management and Forecasting: 2D barcodes allow retailers to capture additional data (e.g., batch/lot numbers, dates) that improve inventory management efficiencies and forecasting for in-store production or online fulfillment.
Food Waste Prevention/Management: By encoding dates such as the expiration date or best-before date, retailers can automatically prevent the sale of out-of-date products at the POS. This helps staff with stock rotation, identifying stock close to expiring, and generating automatic price markdowns to promote clearance. This reduction in food waste helps conserve capital.
Safety, Traceability, and Regulatory Compliance
Enhanced Recall Readiness: Detailed item-level data (like batch/lot numbers and serial numbers) enables targeted recalls, allowing retailers to swiftly identify, isolate, and remove only the affected products. This capability minimizes consumer risk and saves time and money compared to removing all stock.
Transparency and Traceability: 2D barcodes track detailed product information throughout the supply chain (from manufacturer to consumer), meeting customer and regulator demands for greater transparency. This can include details like farm sourcing or harvest dates for fresh foods.
Product Authentication and Loss Prevention: Encoding serial numbers can support verifying product authenticity and tracking high-value or commonly stolen items, aiding anti-counterfeiting efforts, and simplifying returns management.
Regulatory Compliance: Regulatory requirements may mandate tracking and detailed product information that only 2D barcodes can support for specific product types, particularly in the food and pharmaceutical industries. Retailers need to support this transition to ensure compliance.
Food Safety Programs: Additional encoded data enables food safety and consumer safety programs at the register and on the consumer receipt. For example, a hard stop can be triggered at POS if a product has expired, preventing the sale of potentially unsafe goods.
Consumer Engagement and Digital Experience
Direct Access to Digital Content: Using GS1 Digital Link URI syntax (often in QR Codes), the barcode connects consumers to rich, web-enabled digital content using their mobile device's default camera app.
Personalized Marketing: Consumers can access additional product information (ingredients, allergens, nutritional facts, sustainability data, certifications, etc.) or customized experiences (recipes, promotions, loyalty programs, videos, customer reviews). This capability builds brand trust and loyalty.
Dynamic Content Updates: The digital information linked to a GS1 Digital Link barcode can be changed or updated instantly (e.g., changing promotions or posting safety alerts) without modifying the product packaging or reprinting the code.
Future-Proofing: Adopting 2D capabilities aligns the retailer with the Sunrise 2027 initiative, which sets the industry goal for POS systems to read and process GTINs from 2D barcodes by the end of 2027. This positions retailers for a competitive advantage in the evolving digital economy.
Transitioning to scannable 2D barcodes unlocks an entirely new generation of business uses. From moving beyond simple price lookup to greater engagement with products and consumers, 2D barcodes increase operational efficiency throughout the retail ecosystem.
Cons and Challenges of Implementing 2D Barcodes
While the advantages are significant, retailers should be aware of the practical and financial hurdles that arise during implementation and transition.
Financial and Infrastructure Challenges
High Upfront Equipment Costs: Retailers face substantial costs associated with upgrading or replacing existing barcode scanners and Point-of-Sale (POS) systems, especially if older equipment is laser-only and incapable of 2D imaging. Not all existing imaging scanners can meet the Ambition 2027 goal without updates.
Major Software Overhauls: Existing POS and inventory management systems, which are optimized for linear 1D barcodes, require substantial software updates or replacement to handle the increased volume and complex data formats correctly (GS1 Application Identifiers and GS1 Digital Link URI syntax) found in 2D barcodes. The host systems must be configured to manage granular data like expiration date, weight, and label identification numbers.
Data Management Complexity: Retailers must define what data is necessary to encode and ensure their systems are updated to collect, process, store, and use this additional data consistently, which increases complexity for IT and master data management teams.
Compatibility with Legacy Systems: Many businesses, especially smaller ones, rely on outdated IT infrastructure not designed to support advanced 2D data formats, presenting significant integration challenges.
Implementation and Operational Risks
Dual-Marking Complexity / Space Constraints: During the transition period, products must include both the traditional linear barcode and the new 2D barcode, since not all retailer systems can read 2D codes yet. Placing both can be difficult (especially on small or curved packaging) and requires precise placement to ensure quick scanning and prevent accidental double scans.
Printing and Quality Challenges: Printing high-quality 2D barcodes, particularly when adding real-time data (like serial numbers or expiration dates) on production lines or uneven surfaces, demands new equipment, planning, and strict quality control. Poor printing can lead to scanning errors, slowdowns, and bad user experiences.
Need for Supplier Collaboration and Compliance: Retailers depend on suppliers to meet 2D barcode standards and include all required data (like GTIN, serial number, and brand URL). This can be tough for smaller suppliers. Retailers also need to train employees on new systems and how to handle 2D barcode issues.
Security Concerns (Quishing): Because QR codes can contain web links, there’s a risk that hackers could create fake codes to steal personal information (also known as “Quishing”). Retailers must enforce strong security and privacy policies similar to those protecting their websites.
Web Connectivity Requirements: To make the most of 2D barcodes and GS1 Digital Link, retailers must manage online content carefully and ensure the barcode’s web link (URI) correctly leads customers to the intended digital page or resource.
As the retail industry moves toward the 2027 Sunrise, adopting 2D barcodes isn’t just about meeting compliance standards It’s about future-proofing operations, improving transparency, and enhancing customer trust.
While implementation requires investment and collaboration, the long-term benefits far outweigh the challenges. Retailers that embrace 2D barcodes early will position themselves ahead of the curve, ready to deliver smarter, faster, and more connected experiences across every point in the supply chain.
Retailers and RFID
With 93% of retailers already using RFID technology, it may seem moot to discuss its benefits. However, as suppliers continue to use RFID in new ways, it’s helpful to understand how to leverage this technology for further opportunities in operational management.
Related Reading: How Suppliers Can Level Up with 2D Barcodes and RFID Technology
RFID’s Strategic Opportunities for Retailers
Enabling Omnichannel Capabilities
RFID is a key enabler of omnichannel services, and retailers that layer multiple use cases see a higher Return on Investment (ROI).
Guaranteed Availability: By knowing stock location at any given moment, retailers can guarantee availability across all channels and fulfillment nodes, both online and in-store.
Buy Online, Pick Up In-Store (BOPIS): RFID provides real-time inventory visibility, which is crucial for delivering on BOPIS promises and preventing the risk of selling unavailable items for pickup. This saves on last-mile delivery expenses and increases foot traffic to physical stores.
Ship-from-Store (SFS): RFID facilitates SFS capabilities, helping reduce transportation and inventory holding costs.
Logistics Optimization: High-capacity RFID readers can count inventories in warehouses with high traffic volumes to select the ideal location for sourcing each order for delivery. Furthermore, RFID helps reduce split shipments by sourcing closest to the destination.
Related Reading: How Nordstrom’s RFID Strategy Impacts Suppliers
Enhancing Inventory Accuracy and Management
RFID’s top use case is inventory visibility, allowing retailers to see items with real-time accuracy and save valuable time and effort.
Near Real-Time Accuracy: RFID helps retailers accurately monitor stock levels, tracking details such as quantities, models, colors, and sizes, and quickly identifying discrepancies. The technology can achieve inventory accuracy of almost 100% and has been shown to improve accuracy by up to 13% compared to traditional methods.
Reducing Stockouts: RFID significantly improves inventory visibility, which can reduce out-of-stocks by up to 70%. This is a key intended use case for softlines (24%), hardlines (33%), and grocers (22%).
Streamlined Cycle Counts: Using a handheld RFID scanner, multiple items can be processed in minutes, enabling faster and more frequent stock takes and streamlining the inventory count process. For example, Levi's reported that complete inventory counts with a handheld reader take only 20 minutes and can be taken twice daily in stores where RFID is operational.
Automated Operations: The technology automates shipment receipts and triggers reorders based on live data.
Pinpoint Location Tracking: Retailers can use RFID to locate goods down to the specific rack or shelf within a warehouse or store.
Improving Customer Experience (CX)
Retailers can use RFID to streamline shopping and provide personalized services, an increasingly powerful demand from customers.
Frictionless Checkout: RFID enables contactless, automated payments that speed up transactions and reduce friction, addressing a major friction point in retail: the checkout process.
Cashierless Shopping: Retailers like Amazon leverage UHF RFID technology (especially for soft goods like apparel) alongside cameras and sensors to enable "Just Walk Out" technology, providing a frictionless and time-saving experience. Cashierless checkout is a strategic opportunity for retailers.
Interactive Experiences: Luxury retailers use RFID to enhance fitting rooms. For example, Ralph Lauren uses "smart mirrors" that read the RFID tag inside a clothing item, presenting an overlay of the product on a live image of the customer and allowing shoppers to change the color or pattern with a simple gesture. This personalization can build loyalty.
Related Reading: What is RFID (Radio‑Frequency Identification) at Walmart?
Enhancing Operational Efficiency and Security
RFID helps retailers improve internal processes, reduce costs, and help combat theft.
Reduced Labor Costs: RFID can significantly reduce labor costs by quickly automating inventory check-in, counting, and shipment verification. This allows employees to shift their focus from manual tasks to sales and customer service.
Source Tagging: Retailers who engage with suppliers on source tagging (applying tags at the source) see a 16% higher ROI. This practice rationalizes labor for tagging tasks once a full implementation is underway.
Loss Prevention: RFID tracks asset movement and integrates with sales and video data to provide a clearer picture of shrinkage patterns, helping to curb theft and reduce administrative errors. RFID systems can help detect theft and track stolen items.
Access Control: Beyond inventory, RFID strengthens retail security by restricting unauthorized access to sensitive areas, such as stockrooms and warehouses, by using RFID badges or key fobs for authorized personnel.
Real-Time Data and Analytics: RFID generates massive amounts of data that fuel insights. This data supports supply chain and analytics efforts and can be used to analyze in-store traffic patterns (e.g., high-traffic end caps and employee/product paths).
Asset Tracking: RFID automatically scans and updates the location of assets in real time, reducing human error. RFID provides increased visibility through the supply chain loop for companies using returnable assets (like pallets or containers), reducing theft or neglect.
RFID: Driving Retail Innovation and Efficiency
It’s clear why leading retailers like Walmart and Amazon have invested heavily in RFID over the past decade. Today, RFID is more than just an inventory tool; it provides a foundation for emerging technologies, supports collaboration with blockchain, and enables retailers to respond quickly to unexpected disruptions. For retailers looking to stay competitive, leveragingRFID is no longer optional. It is a strategic imperative.
