2023 QR Codes in Retail Penetration Report
If you haven’t noticed at Brij, we are a little bit excited about the practical application of QR codes. QR codes are more than just monochromatic squares mindlessly slapped on to a billboard, brochure, or packaging wrapper.
When there is intention, QR codes have the potential to be gateways to brand story, product instructions, sweepstakes, marketing campaigns, and revenue. With QR codes, brands can not only create amazing experiences for their customers, but also drive business results.
To that end, we've been hard at work sharing our learnings. Earlier in the summer:
- We wrote a QR Code Adoption and Perception research report
- We released a searchable database of QR Code examples
But it left us with more questions. QR codes are clearly trending in retailers around the country, but we wondered what was the actual penetration rate in stores and if it varied store-to-store and category-to-category.
So we ventured into the popular stores with a mission to measure QR code adoption in retail.
The seven stores we visited were
- Pop Up Grocer
- Target
- Whole Foods
- Sephora
- Ulta
- CVS
- Macy’s
Their diverse product range and size of the stores provides an interesting set of insights on brand QR code usage in the retail setting.
TL:DR it’s early days for usage of QR codes on packaging and there is a big opportunity for brands to enhance their brand category, regardless of category.
Our Methodology
Our research process was straightforward. The primary focus was on grocery, convenience, and beauty items, areas where we saw the most QR codes. In each store, we broke the store down into categories and went through each aisle in search of QR codes.
We did not visit the frozen foods aisle in grocery stores, as it would require us to keep freezer doors open for a long period of time. Additionally, we recognized the presence of a QR code at the brand level not the product SKU.
Over all, we looked 2,815 brands’ products. The process was time consuming, but the research speaks for itself. Below might be the most definitive study on QR codes in U.S retail to date.
What we learned
At the Store Level
The average QR Code penetration into stores was 12.6%, meaning most brands are not putting QR codes on their products today.
The outliers were Pop Up Grocer on the high-end, and Ulta Beauty on the low-end. Ulta Beauty is probably best compared directly to Sephora. Sephora had almost half as many products as Ulta, and Ulta had considerably more in the way of hair care and appliances, which tended not to feature QR codes.
Pop Up Grocer is a boutique grocery store in New York City that features some of the trendiest new CPG brands. These brands are all relatively new compared to incumbent brands in big retailers that have been around a long time. The brands in Pop Up Grocer are small, agile, and willing to try new tactics that would take years to implement in a massive company like Coca-Cola.
(Coca-Cola actually uses QR codes. We critiqued their QR code program here. Read that article and you’ll have a better QR code strategy then they do!)
At the Category Level
The average QR code penetration across categories was 8.7%. Food and beverage had the most frequent occurrence of QR codes and the pets category had the lowest frequency of QR codes.
The category-level findings were consistent with our recent consumer QR code adoption study, where we asked consumers what category of products they were most interested in. In that survey, respondents were most interested in scanning:
- Food and beverage (65%)
- Electronics and appliances (59%)
- Supplements, health, and wellness (45%)
- Beauty, cosmetics, and personal care (38%)
- Clothing (34%)
A Quick Trip to Macy’s
While we didn’t visit appliance aisles and stores in this round of research, we did end up doing a scouting trip to Macy’s flagship store. This year, we learned Ralph Lauren was investing in QR codes heavily, so we wanted to see what other brands were doing.
We looked at just over 70 brand collections and found that only 8 collections featured QR codes. That’s just over 11%.
Note that our research was not as comprehensive as grocery and convenience store visits. We looked just these brand collections and nothing else, because of the sheer scale of Macy's store footprint (one city blog, 7 floors!).
What happens after the scan
The scanning of a QR code is just the start of a QR Code Experience. On the other end of a QR code, a brand has many options it can show to a customer. To that end, we scanned every code and classified the destination experience into these classifications:
- Product Detail Pages - online sales pages.
- SmartLabel - ingredient and nutritional information.
- Product Education - how-to content inclusive of recipes and video.
- Homepage - the home page to brand website.
- Loyalty programs - rewards, sweepstakes, and contests.
- Sustainability - information about eco-friendly supply chains.
- Bad links - 404 errors, discontinued QR codes errors.
- Linktree - mobile page with multiple link destinations
- Social Profiles - Instagram
This is what that distribution looked like.
This is consistent with what we find in the wild and at trade shows, where we find that most brands link to the home page or some other webpage.
One of the most shocking data points is that 6.5% of the QR codes we found were broken. This is more than we expected, but not surprising. One limitation of QR code generators is that they require a person to manually cut and paste destination URLs.
And when someone is doing this for a large spread of products, mistakes happen. It’s also hard to maintain when pages change. There were also a handful of messages from QR Code providers that the brand no longer had an account with them, which is an awkward message to be sharing with the public! (FWIW at Brij when a client discontinues their subscription, we direct to a QR code of their choice in perpetuity).
Those curious about SmartLabel the second most popular destination, can learn more in our 12 point critique of Coca-Cola’s QR code experience. SmartLabel is a non-profit that has its own QR code tool focused on ingredients. It’s popular with mega-brands like Modelez, Utz, Coke, Pepsi, but the user experience leaves much to be desired.
In the “Other” bucket, we saw some fun and novel use cases including exclusive discount promotions, swag shops, mobile application downloads, brand videos, store locators, SMS activations, augmented reality experiences, and even a couple of brands linking to exclusive music tracks on Spotify!
There’s a Better Way to do QR Code Experiences
The problem with traditional QR Code Generation tools is that they present the brand with a difficult choice.
- Nudge the buyer to buy more
- Tell the brand story
- Share ingredients, recipes etc.
- Help them get more value from the product
- Engage them with a contest, sweepstakes, or a game
- When in doubt send them to the home page for a catch-all experience
The result is often a narrow and limited experience for the shopper/buyer. Frankly, most brands are not thinking about the entirety of the QR Code Experience. At Brij, we define a QR Code Experience as the end-to-end experience a user has when scanning a QR code. That means the interaction with the QR code AND the final destination.
It’s a bridge between:
- Brand and consumer
- Digital and physical environment
- Pre-, point-of, and post-sale
- Retail, marketplace, and DTC
When done right, it’s an always-on brand activation, communication, and sales channel.
What do you do with your other marketing and sales channels? Whatever you thought of, you can also do that in a QR Code Experience!
We see the QR Code Experience channel as a swiss army knife that can do all of the following:
- Education and nurturing opportunities
- Capture 1st party data capture (email etc.)
- Remarketing and reorder
- Retention and Loyalty
- Drive Retail Velocity (coupon, rebates)
All of this creates a better brand experience for the customer. And anything that provides more value to customers, translates to return on investment.
And with Brij, the choice of what to do, goes away, because you can do it all. The only thing you need to think deeply about is what do you want to optimize for in the primary call-to-action, i..e email optin, product training, or pushing the next sale.
In our humble opinion, the answer for the primary CTA should usually be an exclusive offer that transfers value to the buyer, in change for contact information like phone number or email. And once you have that contact information, you can always follow up with more marketing and sales promotions.
At Brij, we like to think of the QR Code Experience as the 4th leg of the stool in an omnichannel playbook that previously consisted of the big 3: retail, DTC, and Amazon.
A massive untapped opportunity
Most brands think of retail as a sales channel, but with the addition of QR codes to packaging it’s an overlooked marketing channel.
As we learned in our store research, the it’s still early for the penetration of QR codes into retail. Today, that figure stands at 12.6%.
The craziest thing about this situation is that we can now say with certainty this number is going to 100%. GS1, the global organiztaion that manages the bar code is planning to replace bar codes with QR codes in 2027. The movement is called Sunrise 2027 (read more about it here).
While we are 3.5 years away from shifting to the QR code for compliance reasons, there are many business benefits to shift to QR codes now. Brij is helping more and more trend-setting brands do this every day. If that sounds like something your brand wants to do, drop us a line any time. Even if it's just to talk about how to start with QR codes. Book a time here.
