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QR code technology: How a failed innovation became an essential technology

Published October 22, 2020

 

Six years ago, it looked like QR codes were dead. But they’ve reemerged as a crucial component for brick-and-mortar businesses to connect with their customers. Consider what was once a simple act of handing shared menus to restaurant patrons. Now? That’s not so appealing. Instead, QR codes have given brick-and-mortar businesses of all sizes—from neighborhood mom and pops to chains like Texas Roadhouse—a whole new way to interact and connect with consumers, from contactless ordering and payment to COVID-19 contact tracing

 

The rise: QR code technology is invented for efficiency

In 1994, Masahiko Hara, an engineer at Denso Wave, invented quick response codes a better, faster, stronger version of the barcode. It was quickly adopted by the manufacturing and warehousing industry, aiding in the tracking of automotive processes and parts, where it still remains king today.

Because QR codes are two-dimensional (2D) they can store information on parallel and perpendicular planes. This expands the limit of the amount of information they can hold (7,000 characters) and speeds up code reading by 10X compared to barcodes, so it’s easy to see why it was warmly embraced.

The use of QR codes later expanded in big ways, including the facilitation of cross-border mobile payments, aiding in transportation accessibility efforts, and enabling Amazon’s cashier-less retail model. But, until recently, you would have been hard-pressed to find wide-spread use of QR code technology, let alone at your local brick-and-mortar.

 

How QR code and barcodes compare

There are clear differences between a QR code and a barcode that make both appealing, but they sometimes work together for brick-and-mortar applications. Unlike 2D QR codes, barcodes are one-dimensional (1D), meaning they store information in parallel lines and spaces. This limits the amount of code they can hold (20–25 characters) curbing efficiency for scanning in bulk.

QR codes may have been invented as a more efficient alternative to barcodes, but for small businesses, tech that isn’t complex still has its place. Some business owners prefer barcodes over QR codes, especially for products that don’t require data collection. Barcodes are cost-effective, readily available and require few equipment updates.

There are also ways to combine QR codes and barcodes to provide more data to the customer and enable better tracking behind the scenes. Dutch supermarket Albert Heijn, added an extra layer of transparency to their customer’s shopping experience. In addition to the barcode scanned at purchase, QR stickers were added to some of their products allowing shoppers to scan product codes, giving Albert Heijn visibility into their production chain. 

And it wasn’t until the 2010s that QR codes had a brief heyday in consumer-facing ways—especially in the advertising industry when QR utilization became front and center in magazine ads, subway terminals and billboards. The exact reason for the sudden rise in QR code use within the advertising industry is about as unclear as the descent.

Trying to explain the spike, Bloomberg suggests it could have been due to the fact that including a QR code on an ad gave “the appearance of being tech-savvy.” They also point to something similar about today’s use of QR codes: Advertisers wanted another way to connect with consumers on a digital plane. At what point, then, did they lose favor?

 

The fall: QR codes failed move to mainstream

During their 2010 advertising renaissance, QR codes started making (sometimes peculiar) moves in an upward trend. They were scanned by a whopping 1 in 6 Canadian smartphone users in 2011. Some people even put QR codes on their loved ones’ gravestones. 

Then, the great disappearing act happened. Although they (kind of) caught on within the marketing and advertising industries, they were quickly dismissed as a fad. This could have been due to poor implementation—or maybe people needed time to process their various mishaps and security concerns.

In the end, they failed to go mainstream because:

  • They were seen as a gimmick: In 2012, known for their elaborate corn mazes, the Kraay Family Farm in Alberta, Canada set a then-Guinness World Record for the largest QR code. In an interview with ABC News, Rachel Kraay told reporters, “We were just sitting around reading magazines and stuff when we saw one of the QR codes on the cover." The idea came together as a 15-acre maze. When scanned, the code took you to the farm’s website.
  • They fell prey to security concerns: In 2015, QR codes got their fair share of flack after a ketchup bottle blunder. Heinz in Germany placed a QR code on some bottles leading consumers to a contest on their website. After Heinz failed to renew its custom URL registration, an adult content website bought it, leading those who scanned Heinz’ code to their website instead—drawing criticism for consumer use of the technology.
  • They were exploited by scammers: In 2018, a QR code scanner app scammed iOS users out of $80,000 a month. The scam was a “subscription trap,” convincing users to sign up for a $156/year subscription. The pricey sign-up offer supposedly offered those who downloaded it unlimited folders, no ads, batch scanning and more. However, the app often redirected users to irrelevant Amazon links and, sometimes, it didn’t work at all.

 

The return: Mobile payments bring new life to QR codes and COVID-19 accelerates their growth

We’ve come a long way since the “fall” of the QR code. Years before the pandemic the rise of mobile payments had brought the QR code back in a big way. Take China for example. In 2018, QR codes via mobile payments had largely already replaced cash, debit and credit cards with mobile payments exceeding $5.5 trillion in 2017 alone. India was quick to follow suit and it wasn’t long before the rest of the world began to embrace the QR code and mobile payments.

Then the pandemic hit accelerating the use of mobile payments in a world where contactless has become a big priority. And now QR codes are also being used in other social distancing ways that don’t even require the use an app to scan one. According to a MobileIron consumer sentiment study, “in the last six months, 38 percent of respondents have scanned a QR code at a restaurant, bar or café; 37 percent of respondents have scanned a QR code at a retailer, and 32 percent have scanned a QR code on a consumer product.”

Although QR codes have been appearing on products for some time, COVID-19 forced brick-and-mortar businesses to be more digitally innovative. QR codes are at the forefront of this modernization, all in the name of contactless interaction. Wired says QR codes are in their element as “the perfect touch-free medium,” and there’s plenty of data to support it.

Chinese messaging, social networking and payment software, WeChat, increased its “QR Code Economy” by 25.86 percent in Q1 2020. WeChat users scanned QR codes “over 140 billion times in total, which on average, helped each person save 29.2 hours.” Consumer sentiment around QR codes is also on the rise: Google search queries for QR codes saw a sharp spike at the end of March, and 53 percent of MobileIron research respondents want to see QR codes used more broadly in the future.

 

QR comeback: How businesses are using QR codes to connect with in-premise customers

It’s fascinating to see how businesses around the world are getting creative with the use of QR codes. Hotel chain CitizenM launched a QR-powered contactless stay experience. With it, guests can generate their own key cards, order food and drinks, and even adjust the temperature in their room.

Starbucks is known for rallying their in-store and digital experiences around customer connection. Using the data gathered from their in-app QR codes, they deliver an increasingly personalized experience with each scan.  So, even the giants have their heads in the QR code game.

By the end of the year, Coca-Cola Freestyle drink dispensers will feature “Mobile Pour,” their new QR-powered contactless drink selector. PayPal is helping small businesses facilitate contactless payments (and waiving associated fees) with QR-powered digital payments.

 

If it could speak QR code has a clear message: It’s not going anywhere

For brick-and-mortar businesses, the digital adoption of touch-free payments has been helpful during a chaotic time to connect with customers. By reducing contact in as many ways as possible, businesses can increase trust on the customer-side and speed up service making the rise of QR code a win-win. So, while it may have been a winding road to get here, today’s customer-centered use for QR code technology are here to stay.

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