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Why Barcodes Look Like That (and What It Means for Your Data) · Selling on Giants: The eCommerce Marketplace Podcast

• 0:00
  SPEAKER_00: I've probably looked at a barcode tens of thousands of times in my life, and until recently, I never really thought about why it looks the way it does.
• 0:08
  SPEAKER_00: Why is a UPC that familiar horizontal rectangle made up of vertical black lines?
• 0:15
  SPEAKER_00: Why not circles?
• 0:16
  SPEAKER_00: Why not some other shape?
• 0:18
  SPEAKER_00: And how does the scanner underneath the grocery store counter actually read the thing?
• 0:23
  SPEAKER_00: Then I started digging into the history.
• 0:26
  SPEAKER_00: And what I thought was going to be a story about a barcode turned into a much bigger story about retail, entrepreneurship, logistics, standards, and ultimately data.
• 0:37
  SPEAKER_00: Because we take the barcode completely for granted today.
• 0:41
  SPEAKER_00: You grab your groceries, somebody slides them across a scanner, you hear a beep, and you move on with your life.
• 0:48
  SPEAKER_00: What I didn't appreciate was just how congested and labor-intensive shopping was before this technology existed.
• 0:55
  SPEAKER_00: I'm Will and this is Selling on Giants, where we break down the ideas, technology, and marketplace shifts changing the way brands sell.
• 1:04
  SPEAKER_00: Today I want to tell you the story of one of the most boring-looking technologies ever invented, and why I think it helped create the retail world we operate in today.
• 1:14
  SPEAKER_00: Before barcode scanners, every product in a grocery store needed to be individually priced.
• 1:22
  SPEAKER_00: Employees literally walked the aisles putting stickers on cans, boxes, bottles, and bags.
• 1:29
  SPEAKER_00: If the store changed the price, somebody had to go back through and change those stickers.
• 1:35
  SPEAKER_00: Then you got to checkout, where the cashier had to read every price and manually enter it into the register.
• 1:42
  SPEAKER_00: If a sticker was missing, smeared, or the price had changed on the shelf but not the product, everything stopped while somebody figured it out.
• 1:50
  SPEAKER_00: And inventory management wasn't exactly running on real-time dashboards either.
• 1:55
  SPEAKER_00: Managers used handwritten records, clipboards, and experience to understand what was moving and what wasn't.
• 2:02
  SPEAKER_00: I work in e-commerce, so I live inside dashboards all day.
• 2:07
  SPEAKER_00: Search data, conversion rates, inventory, ad performance, organic rank, forecasting, all of it.
• 2:14
  SPEAKER_00: It's easy to forget there was a time when retailers simply couldn't see their businesses the way we can today.
• 2:21
  SPEAKER_00: That's the environment where the barcode started.
• 2:23
  SPEAKER_00: In 1948, the president of a grocery chain approached the Drexel Institute of Technology, looking for a way to automatically identify products at checkout.
• 2:34
  SPEAKER_00: A graduate student named Bernard Silver overheard the conversation and brought the idea to his friend Joe Woodland.
• 2:41
  SPEAKER_00: Woodland became obsessed with solving it.
• 2:44
  SPEAKER_00: Eventually he moved to Miami Beach to work on the problem, and while thinking about ways to encode information visually, he remembered Morse code from his time as a Boy Scout.
• 2:54
  SPEAKER_00: He started drawing in the sand, taking dots and dashes and stretching them into lines.
• 3:00
  SPEAKER_00: Eventually, Woodland and Silver developed a circular symbol that looked like a bullseye.
• 3:05
  SPEAKER_00: The thinking made sense.
• 3:07
  SPEAKER_00: With circles, the scanner could theoretically read the code regardless of how the product was positioned.
• 3:13
  SPEAKER_00: They even built a scanner to prove it.
• 3:15
  SPEAKER_00: And this is another part of the story that I found fascinating, because today we barely noticed the scanner underneath the checkout counter.
• 3:22
  SPEAKER_00: Their prototype was enormous.
• 3:25
  SPEAKER_00: The early commercial scanners used technology like helium neon lasers, photo sensors, and rotating mirrors that bounced a beam of light upward through the glass.
• 3:35
  SPEAKER_00: Think about the engineering required just to create the little beep we completely ignore today.
• 3:40
  SPEAKER_00: The original concept worked, but barely.
• 3:44
  SPEAKER_00: Woodland and Silver patented it, and eventually Woodland went to work for IBM and tried to convince the company to develop it.
• 3:52
  SPEAKER_00: IBM essentially looked at the idea and came to a pretty frustrating conclusion.
• 3:58
  SPEAKER_00: The concept made sense, but the surrounding technology wasn't ready.
• 4:02
  SPEAKER_00: That's something entrepreneurs still deal with today.
• 4:05
  SPEAKER_00: We have this tendency to believe that if an idea is good enough, being first should automatically be an advantage.
• 4:12
  SPEAKER_00: History doesn't really work that way.
• 4:14
  SPEAKER_00: Friendster existed before MySpace became huge.
• 4:18
  SPEAKER_00: Napster showed massive consumer demand for digital music long before Spotify turned streaming into the model we recognize today.
• 4:28
  SPEAKER_00: There are countless examples of somebody seeing where the world was going, but arriving before the technology, business model, customer behavior, or economics were ready.
• 4:39
  SPEAKER_00: Sometimes being early looks exactly like being wrong.
• 4:42
  SPEAKER_00: I see smaller versions of this all the time because I get to speak with a lot of inventors and entrepreneurs through my work.
• 4:49
  SPEAKER_00: Founders can go incredibly deep into solving a problem without getting enough feedback from the people who are actually supposed to buy the solution.
• 4:57
  SPEAKER_00: And sometimes the difficult part is telling somebody that the market simply may not care.
• 5:03
  SPEAKER_00: I once talked with an entrepreneur trying to revolutionize the ice tray.
• 5:08
  SPEAKER_00: He was genuinely thinking deeply about the product and trying to improve it.
• 5:14
  SPEAKER_00: But we also live in an era when millions of refrigerators have automatic ice dispensers.
• 5:20
  SPEAKER_00: That doesn't mean nobody buys ice trays.
• 5:23
  SPEAKER_00: It means you have to ask a harder question than can I improve this?
• 5:27
  SPEAKER_00: You have to ask, is this a problem enough people still care about solving?
• 5:32
  SPEAKER_00: And founders don't always hear that because most people are nice.
• 5:36
  SPEAKER_00: Your friends and family are probably not going to look you in the eye and say, that's a terrible idea.
• 5:41
  SPEAKER_00: Customers will, usually by not buying it.
• 5:44
  SPEAKER_00: Woodland and Silver weren't necessarily wrong about the barcode.
• 5:48
  SPEAKER_00: They were early.
• 5:50
  SPEAKER_00: Eventually they sold their patent for$15,000 long before the technology became foundational to modern retail.
• 5:57
  SPEAKER_00: Silver died in 1963 at only 38 years old and never saw the system reach supermarkets at scale.
• 6:05
  SPEAKER_00: Then, about two decades after the original idea, the environment finally began to change.
• 6:11
  SPEAKER_00: Supermarkets were larger, labor was more expensive, computing had improved, retailers were handling more SKUs, and the grocery industry finally decided it needed a universal system for automatically identifying products.
• 6:27
  SPEAKER_00: Now the problem changed.
• 6:29
  SPEAKER_00: It wasn't whether the barcode should exist anymore, it was which barcode everybody should use.
• 6:35
  SPEAKER_00: Several major technology companies submitted competing designs.
• 6:39
  SPEAKER_00: RCA had an advantage because it controlled the original bullseye technology and had already demonstrated it in a real grocery environment.
• 6:48
  SPEAKER_00: But the bullseye had a practical problem.
• 6:51
  SPEAKER_00: Ink.
• 6:51
  SPEAKER_00: When circular codes were printed rapidly on packaging, the ink could smear and distort the circles.
• 6:58
  SPEAKER_00: A design can look brilliant on paper, but if millions of manufacturers can't reliably print it onto cereal boxes and soup cans, you don't really have a standard.
• 7:08
  SPEAKER_00: IBM engineer George Lorer looked at that problem and went in another direction.
• 7:13
  SPEAKER_00: Instead of circles, he designed the rectangular symbol made from vertical bars that we recognize today.
• 7:20
  SPEAKER_00: And this finally answered the question that originally sent me down this rabbit hole.
• 7:25
  SPEAKER_00: The barcode looks the way it does, partly because of printing.
• 7:29
  SPEAKER_00: The width of the vertical bars carries the information.
• 7:32
  SPEAKER_00: If ink spreads slightly up or down the length of those bars during manufacturing, the scanner can still distinguish the critical widths.
• 7:41
  SPEAKER_00: The design was also compact and could be scanned from either direction.
• 7:45
  SPEAKER_00: It wasn't necessarily prettier or more futuristic, it was more practical.
• 7:51
  SPEAKER_00: And then the story gets really interesting from a founder perspective because Joe Woodland, the guy who had spent decades working on the original bullseye idea, was working at IBM when Lore developed the competing design.
• 8:05
  SPEAKER_00: Woodland could have defended his invention.
• 8:07
  SPEAKER_00: He could have spent his energy explaining why the original design deserved another chance.
• 8:12
  SPEAKER_00: Instead, he supported Lore's version.
• 8:15
  SPEAKER_00: I love that because I see founders struggle with this constantly.
• 8:19
  SPEAKER_00: When you build something yourself, it's very easy to confuse the product with the mission.
• 8:24
  SPEAKER_00: You created the feature, so the feature has to stay.
• 8:28
  SPEAKER_00: You invented the product, so customers need to understand why they should want it.
• 8:32
  SPEAKER_00: You develop the packaging, so the packaging can't be the problem.
• 8:36
  SPEAKER_00: But sometimes the market is giving you an answer you don't want to hear.
• 8:40
  SPEAKER_00: The entrepreneurs who stay small often have trouble getting out of their own way.
• 8:45
  SPEAKER_00: They go deeper and deeper into their own idea rather than stepping outside of it and asking customers what they actually need.
• 8:53
  SPEAKER_00: Woodland could have been the inventor protecting his invention.
• 8:57
  SPEAKER_00: Instead, he was a problem solver, willing to admit somebody else had solved part of the problem better.
• 9:02
  SPEAKER_00: That distinction matters.
• 9:04
  SPEAKER_00: In 1973, the industry selected IBM's design as the universal product code.
• 9:12
  SPEAKER_00: Then IBM made another decision that helped the system spread.
• 9:16
  SPEAKER_00: It didn't patent the UPC design itself.
• 9:20
  SPEAKER_00: Everybody could use the standard.
• 9:22
  SPEAKER_00: Manufacturers could print it, retailers could scan it, technology companies could develop systems around it.
• 9:29
  SPEAKER_00: IBM could still sell computers, scanners, and infrastructure, but the language itself belonged to everybody.
• 9:36
  SPEAKER_00: That's how you get something like GS1 today.
• 9:38
  SPEAKER_00: If you sell physical products on Amazon or Walmart, GS1 probably isn't the sexiest part of your business.
• 9:46
  SPEAKER_00: Nobody gets excited on Monday morning because it's finally time to talk GTINs.
• 9:50
  SPEAKER_00: But standardized product identification is part of the infrastructure that allows modern commerce to function.
• 9:58
  SPEAKER_00: The same is true of APIs.
• 10:00
  SPEAKER_00: They're not exciting to the average consumer, but they allow systems to communicate with each other using agreed-upon rules.
• 10:07
  SPEAKER_00: The QR code is another extension of the same basic idea.
• 10:12
  SPEAKER_00: Encode information in a standardized format so machines everywhere can understand it.
• 10:17
  SPEAKER_00: These things work because everybody agrees on the language.
• 10:21
  SPEAKER_00: And retailers have enormous power to accelerate that agreement.
• 10:26
  SPEAKER_00: Walmart became one of the major forces pushing barcode adoption by requiring suppliers to use them.
• 10:33
  SPEAKER_00: Once a retailer with that much purchasing power says, if you want to sell through our system, this is how products need to be identified, suddenly adoption stops being an academic debate.
• 10:45
  SPEAKER_00: It becomes the cost of doing business.
• 10:47
  SPEAKER_00: We still see that dynamic constantly with Amazon and Walmart.
• 10:52
  SPEAKER_00: Retailers create operational requirements around catalog structure, fulfillment, product identification, shipping, inventory, compliance, and data.
• 11:04
  SPEAKER_00: Brands may hate the complexity, but once enough commerce moves through the system, the retailer effectively creates the standard.
• 11:12
  SPEAKER_00: And there's another piece of modern commerce that I think we massively underestimate because consumers barely see it anymore.
• 11:20
  SPEAKER_00: Logistics.
• 11:21
  SPEAKER_00: Getting the product from the manufacturer to the warehouse through fulfillment, onto a truck, through the last mile, and onto somebody's doorstep is incredibly expensive and complicated.
• 11:33
  SPEAKER_00: Amazon has become so good at this that they have fundamentally changed consumer expectations.
• 11:39
  SPEAKER_00: We order something and expect to know exactly where it is.
• 11:43
  SPEAKER_00: We expect it tomorrow.
• 11:44
  SPEAKER_00: Sometimes we expect it this afternoon.
• 11:47
  SPEAKER_00: That experience depends on layers of boring infrastructure underneath the purchase.
• 11:52
  SPEAKER_00: Product identifiers, scanners, warehouse systems, labels, APIs, fulfillment networks, route optimization, and last mile delivery.
• 12:03
  SPEAKER_00: Nobody gets excited about that infrastructure until it breaks.
• 12:07
  SPEAKER_00: We're going to take a quick break.
• 12:09
  SPEAKER_00: Selling on Giants is brought to you by Bellivix, where we help brands scale across marketplaces like Amazon and Walmart through marketplace management, advertising, operations, and strategy.
• 12:21
  SPEAKER_00: If your marketplace business is becoming more complex than your internal team can comfortably manage, visit Bellavics.com.
• 12:29
  SPEAKER_00: Now here is where the barcode story took a turn that I think matters most for e-commerce operators.
• 12:35
  SPEAKER_00: Even after the industry agreed on the UPC, adoption wasn't immediate.
• 12:41
  SPEAKER_00: Consumers worried that removing individual price stickers would allow retailers to manipulate prices.
• 12:47
  SPEAKER_00: There was public resistance, government scrutiny, and by the end of the 1970s, only about 1% of American grocery stores had installed scanners.
• 12:57
  SPEAKER_00: After decades of work, major corporate investment, and an industry-wide standard, almost nobody was using it yet.
• 13:05
  SPEAKER_00: But the retailers that did install scanners started discovering something.
• 13:10
  SPEAKER_00: Yes, checkout became faster, pricing errors declined, labor productivity improve.
• 13:16
  SPEAKER_00: Those were the obvious benefits and the reasons retailers thought they wanted the technology.
• 13:22
  SPEAKER_00: But every time that scanner beeped, it also created information.
• 13:27
  SPEAKER_00: Which product sold?
• 13:28
  SPEAKER_00: When did it sell?
• 13:30
  SPEAKER_00: How much sold?
• 13:32
  SPEAKER_00: What happened when the price changed?
• 13:34
  SPEAKER_00: Did moving the product change velocity?
• 13:37
  SPEAKER_00: How quickly did inventory need to be replenished?
• 13:41
  SPEAKER_00: Suddenly, retailers could begin seeing what was happening inside their businesses in a way that hadn't really existed before.
• 13:48
  SPEAKER_00: And that's the part of the story that connects directly to what we do today.
• 13:53
  SPEAKER_00: The barcode started as a checkout solution and helped turn retail into a data business.
• 13:59
  SPEAKER_00: That matters because brands tend to make one of two mistakes with data.
• 14:03
  SPEAKER_00: Some barely use it, they operate largely on intuition, and sometimes intuition is right.
• 14:09
  SPEAKER_00: Experienced operators develop good instincts, and occasionally you get lucky.
• 14:14
  SPEAKER_00: The other extreme is drowning in data.
• 14:17
  SPEAKER_00: You can analyze so many dashboards, metrics, keywords, attribution windows, reports, and trends that you completely lose the forest for the trees.
• 14:26
  SPEAKER_00: You know every number in the account, but you still don't know what decision to make.
• 14:30
  SPEAKER_00: Neither approach is particularly useful.
• 14:33
  SPEAKER_00: Data should change a decision.
• 14:35
  SPEAKER_00: If you're looking at a metric and it doesn't affect what you do next, you need to ask why you're spending so much time looking at it.
• 14:43
  SPEAKER_00: On Amazon, we have an almost absurd amount of information compared with what a grocery operator had before barcode scanning.
• 14:50
  SPEAKER_00: Search query performance can tell us how consumers behave through the funnel.
• 14:54
  SPEAKER_00: Advertising data tells us how shoppers respond to keywords and creative.
• 14:59
  SPEAKER_00: Inventory data shows velocity.
• 15:02
  SPEAKER_00: AMC can help us understand customer journeys and audiences across multiple interactions.
• 15:07
  SPEAKER_00: Having more data doesn't automatically make you smarter.
• 15:11
  SPEAKER_00: The question is whether you're using it to make a better decision.
• 15:14
  SPEAKER_00: Did you change the price?
• 15:16
  SPEAKER_00: Did you change the creative?
• 15:18
  SPEAKER_00: Did you reorder differently?
• 15:19
  SPEAKER_00: Did you stop spending against a keyword?
• 15:22
  SPEAKER_00: Did you identify a product customers want that you weren't offering?
• 15:26
  SPEAKER_00: Did you learn something?
• 15:27
  SPEAKER_00: Because otherwise, you have a very expensive dashboard telling you what already happened.
• 15:33
  SPEAKER_00: And I think there's a light AI connection here too.
• 15:36
  SPEAKER_00: Right now, everybody is focused on the visible applications of AI.
• 15:40
  SPEAKER_00: Generate the image, write the copy, summarize the spreadsheet, optimize the campaign, answer the customer question.
• 15:47
  SPEAKER_00: Those are useful, but I wonder whether we're looking at the equivalent of faster checkout.
• 15:52
  SPEAKER_00: The original benefit of the scanner was obvious.
• 15:55
  SPEAKER_00: It made checkout faster.
• 15:57
  SPEAKER_00: The much larger effect emerged once billions of transactions began producing structured data that retailers could use to run their businesses differently.
• 16:06
  SPEAKER_00: AI may follow a similar pattern.
• 16:09
  SPEAKER_00: The applications we're excited about today may not be the applications that ultimately matter most.
• 16:15
  SPEAKER_00: We may need the technology, integrations, customer behavior, standards, and business models around it to mature before the larger impact becomes obvious.
• 16:26
  SPEAKER_00: That's why I think the barcode story is so interesting.
• 16:30
  SPEAKER_00: It starts with an inventor trying to solve a checkout problem.
• 16:33
  SPEAKER_00: It takes decades for technology to catch up.
• 16:36
  SPEAKER_00: The original design loses to a more practical version.
• 16:40
  SPEAKER_00: The industry agrees on a standard.
• 16:42
  SPEAKER_00: Retailers like Walmart help force that standard throughout the supply chain.
• 16:46
  SPEAKER_00: And then everybody discovers that the real value isn't simply scanning faster.
• 16:51
  SPEAKER_00: It's knowing what happened.
• 16:52
  SPEAKER_00: That takes us all the way from a grocery store in the 1970s to how we operate Amazon and Walmart businesses today.
• 17:00
  SPEAKER_00: We have more information than retailers at any other point in history.
• 17:04
  SPEAKER_00: We can see search behavior, advertising performance, pricing, inventory movement, conversion, customer journeys, and demand almost in real time.
• 17:15
  SPEAKER_00: So maybe the most useful question isn't whether you have enough data.
• 17:20
  SPEAKER_00: Most brands already have plenty.
• 17:22
  SPEAKER_00: The question I'd leave you with is much simpler.
• 17:25
  SPEAKER_00: Am I actually using my data to make decisions?
• 17:28
  SPEAKER_00: I'm Will, and this is Selling on Giants.
• 17:31
  SPEAKER_00: If you enjoyed the episode, follow the show and leave us a review.
• 17:35
  SPEAKER_00: It helps more operators and brands find the podcast.
• 17:39
  SPEAKER_00: And the next time you hear that little beep at checkout, you might appreciate just how much is happening behind it.