Are QR codes a labeling problem or solution?

When QR codes became a vital piece of technology for Japanese auto makers in the mid-1990s, nobody could anticipate the marketing buzz the technology would eventually inspire. As of a few years ago, use of QR codes for marketing purposes skyrocketed, including a 4000% increase in usage from 2011 to 2012

However, that fast-paced adoption led to a quick drop off from consumers, who soon began ignoring the white and black pixelated boxes as QR codes lost their early luster and excitement. By 2013, marketing experts called QR codes "dead, trampled by easier-to-use apps."

Nowadays, QR codes are coming back to product labels, but not to show consumers commercials or unlock promotions. These codes serve a more practical, functional purpose: Improving industry transparency and expanding manufacturer-consumer communication beyond the information that can fit on a product label’s limited real estate. Two big food industry initiatives, SmartLabel and potentially GMO labeling, rely on QR codes to deliver important product information to the consumer.

SmartLabel on Hershey's product
The Hershey Company

The question now is whether consumers will make good use of QR codes to learn more about food and beverage products. The answer may depend on how manufacturers can show that QR codes add value to their conversations with consumers, well beyond GMO labeling.

The great QR code debate

After Congress passed the GMO labeling bill enabling manufacturers to use QR codes last month, a vocal group of consumers and public health advocates sent petitions to the White House demanding the president veto the bill. However, Politico deemed the petition “too little too late,” and the president signed the bill into law on July 29.

Opponents argue that forcing consumers to scan QR codes for product information discriminates against certain demographics, particularly low-income, elderly and rural Americans. Many in these demographics do not own smartphones, cannot always afford service, or may not understand how to use QR codes, opponents said.

However, Jim Flannery, senior executive vice president of operations and industry affairs at the Grocery Manufacturers Association and lead on the SmartLabel initiative, calls the attacks on QR codes "misguided."

"(SmartLabel) is easy to use, and I think the difference is that SmartLabel is going to provide the information consumers want," Flannery told Food Dive.

Jim Flannery
Grocery Manufacturers Association

According to Pew Research Center, 68% of U.S. adults owned a smartphone in 2015, a 35% increase since 2011. For adults ages 18 to 29, the smartphone adoption rate was 86%. But that rate dropped for older generations, including 58% for U.S. adults ages 50 to 64 and 30% for those 65 and over.

A 2014 ExactTarget report on consumers’ mobile behavior found that 34% of U.S. consumers had scanned a QR code while shopping. Data from Scanbuy indicated that QR code scans per person rose 7.5% on average from 2014 to 2015.

"Honestly, I think those concerns are primarily coming from politicians and activists and not so much from consumers," Deb Arcoleo, Hershey’s director of product transparency, told Food Dive. "…There are highly energized advocates on both sides. That probably doesn't reflect the attitudes and opinion of the majority of consumers."

Deb Arcoleo

Hershey performed qualitative research while planning an early prototype for SmartLabel. They asked test groups about QR codes and whether they would access food information by scanning a code on a product’s package.

"They said, 'This is really valuable information, and if I have to scan a QR code to get there, that's cool. Normally when I scan a QR code I get a marketing message or a video or a recipe, nothing that's really interesting to me. This is really great,'" said Arcoleo. "We did not have consumers tell us that that was a huge barrier."

Are QR codes a preferred method for accessing food information?

The Center for Food Integrity (CFI) published research reports from the past two years that found the preferred use of QR codes to access food information hovered around 8% to 9% of consumers. That’s compared to on-package statements or company or third-party websites, which consumers overwhelmingly preferred. A majority of consumers like on-package statements for information on food safety and impact on health. Most wanted websites for information on animal well being, business ethics, or labor and human rights issues.

"When we did qualitative work, how consumers want to access information is almost as diverse as the number of consumers, which creates both an opportunity and a challenge," Charlie Arnot, CEO of The Center for Food Integrity, told Food Dive. "… Regardless of what method a company chooses, it won't be right for everybody… The key here is that there's a fundamental commitment to embrace consumers’ right to know, and then to continue to explore what's the best way to get information to consumers."

Charlie Arnot
The Center for Food Integrity

However, the perception of QR codes could change. Or other innovations could replace QR codes and other technologies commonly used today.

"We're going to see that evolve over time," said Arnot. "I would be shocked if five years from today that we were talking about the same kind of technology that consumers were using to access information."

Providing "added value" remains key

Per Hershey’s feedback from test groups, Arcoleo said consumers are more motivated to scan a QR code when it offers information the consumer values.

"I'm not interested in scanning a QR code to get the latest marketing fluff," said Arcoleo. "If I'm going to get something of value to me that's going to help me make an informed purchase decision, that's fine."

"QR codes have varying uses depending on the value that the consumer gets from where that QR code took you," said Flannery. "If you use a QR code and it takes you to some place where you got a lot of value, you're going to use it again and again."

For SmartLabel, the added value goes beyond information about GMO ingredients. Accessing SmartLabel’s different tabs offers access to a variety of product, ingredient and company information. At its core, it contributes to the industry’s attempts to meet consumers’ demands for increased transparency.

"I think the real difference here, the value in SmartLabel, is the 360 attributes organized in a consistent fashion so the consumer knows what's there, knows what they can search for across categories and across brands," said Flannery. "That's the value. The QR code is just one path to that SmartLabel landing page. If they get value in the information there, then they will use the QR codes."

SmartLabel tabs
Grocery Manufacturers Association

SmartLabel: More than just a QR code

What is less known about SmartLabel is that it’s not just a QR code, but rather a web-based tool with "digital access to information" as its "essence," Flannery said.

In addition to scanning a SmartLabel QR code on a product’s packaging, consumers can get all of the same product information by:

  • Accessing the SmartLabel.org product database via a mobile or desktop web browser.
  • A web search for the product.
  • A direct link to the SmartLabel product listing from the company’s website.
  • Other existing apps GMA is working with “to become SmartLabel certified that will take the consumer to the brand landing page in two clicks or less,” Flannery said.
  • Calling the 800-number on a package to speak to a customer service representative who has access to all of the same product information listed on SmartLabel.

Arcoleo said one company that already uses SmartLabel generates 76% of its listings traffic from direct links from its own website, not QR codes.

"I think maybe sometimes people are losing sight of that," said Arcoleo. "That's the beauty of the fact that this is a web-based tool. You can get to a website lots of different ways. …You don't even really need a smartphone. You just need a connected device."

Flannery discredited a common argument. 

"This notion that the consumer has to walk up and down the aisle scanning every single thing, every single trip to the store, is a false narrative."

"We've seen statistics from our member companies that would indicate that 95% of what a shopper buys on his or her trip to the store is pretty much the same each time," said Flannery. "The consumer is not going to have to make this search every time. They'll look once for an ingredient, and then they'll know and be satisfied until they want to look for something else in the future."

Ways to access SmartLabel
Grocery Manufacturers Association

Opinions about usage of QR codes for GMO labeling and other food and beverage product information may also shift once GMA rolls out a marketing campaign to introduce consumers to the technology and its benefits. GMA is waiting for SmartLabel adoption by manufacturers to reach "critical mass," anticipated for late 2017, according to Flannery.

Until then, and until the USDA outlines the specifics of the GMO labeling law, the debate over using QR codes for GMO labeling will continue. But there’s no arguing that a critical shift has occurred across the food and beverage industry.

"You've got a fundamental commitment to embrace the consumer’s right to know, and then exploring the different ways to make sure that various consumers have access to the information they're looking for," said Arnot. "QR codes may or may not end up being the answer, but I think they're one of the different ways that consumers are looking for information today."

Filed Under: Corporate Marketing
Top image credit: FreeDigitalPhotos.net