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Has Apple unleashed a multichannel QR code comeback?

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Apple’s latest mobile operating system, released this week, includes a native QR code reader, so the black and white squares could soon be key to multichannel shopping experiences.

  • Apple’s iOS 11 for mobile users includes a native QR code reader built into camera functionality
  • There are an estimated 700 million iPhone and iPad users
  • QR codes are widely used in China for instant payment, and in marketing to link users to content or product

Originally developed in the early 1990s, the quick response (QR) code, with its characteristic square of digital white noise, is something of a divisive technology. While early adopters hoped for a revolution, the QR code has been largely cast aside by UK retailers and consumers alike, thought of more as a gimmick.

However, this week’s release of the latest operating system for iPhones and iPads includes a native QR code-scanning capability built into the devices’ cameras, and with an estimated 700 million Apple devices in use worldwide, it looks as though the technology’s time may have come.

They’re multifunctional – a bridge between the physical and digital realms

Josh Walker, The Future Lab

QR codes work in a similar manner to barcodes, but much more rapidly. Users open a compatible app on a mobile device to scan the characteristic square of dots with their camera, and get swiftly redirected to a separate function, app, webpage or other utility, in response to the unique pattern recognised.

While the technology caused a mild stir when it first emerged, UK consumers never took to the technology because of the lack of third-party applications that can scan the codes. Apple’s iOS 11 could change that.

“Seamless integration with a product as popular as the iPhone will open up everyday opportunities for QR,” says Josh Walker, journalist at The Future Lab. “They offer as much, and more, potential as they always have. They’re multifunctional – a bridge between the physical and digital realms, and in just a few clicks can take anyone from the real world to a point of purchase online.”

Eastern promise

The reason behind Apple’s decision lies in the booming Chinese market. While QR code uptake in the UK was never significant, its fortune was somewhat different in the Far East, and the use of the technology there could show a taste of things to come closer to home.

In China QR codes are used in points of sale, marketing material and adverts to drive augmented-reality experiences

Chris Vincent, Practicology

“As marketplaces have proliferated and grown in China over the past 10 years, QR codes have been used increasingly to drive mobile activity for consumers,” explains Chris Vincent, global CEO of e-commerce advisory company Practicology. “It really is in use in everyday life in China. Retailers are using QR codes in anything from stands at points of sale, marketing material, and using it in adverts to drive augmented-reality experiences or trigger an online experience from an offline ad.”  

One core use for QR codes is payment: through functions such as Alibaba’s Alipay app, customers can use QR codes to pay for goods using their mobile device. In 2015, non-cash payments accounted for almost 60% of Chinese retail spend – and digital payments topped RMB20 trillion (£2.2 trillion) in 2016.

Consumers are increasingly mobile-centric, and the Centre for Retail Research estimates that UK consumers will spend £27bn via mobile devices in 2017.

QR code payments also make for a more seamless payment experience. Amazon Go in the US already offers a cashless, staff-free store, as does Chinese startup Bingobox, where customers scan QR codes on their wares to pay.

The iPhone QR code scanner will allow us to use the functionality of the camera to create meaningful experiences in store

Gabriele Tazzari, Yoox Net-a-Porter Group

“Technology such as QR codes is enabling consumers to shop seamlessly without human interaction, cash or cards,” explains Walker. “As convenience becomes more prevalent and low-friction retail more sought after by consumers, this could be a potential opportunity for QR codes to make some noise.”

QR codes also offer a handy way to connect the online and in-store experience, and it is this function that has particularly captured retailers’ attention. Yoox Net-A-Porter Group (YNAP), for example, is in the process of developing QR codes for the windows of its partners’ physical stores. When an item’s QR code is scanned, users will automatically be taken to an e-commerce site, where they can buy the items immediately.

Announcing the initiative this summer, YNAP research and development director Gabriele Tazzari notes that with the integration in the iPhone camera, QR codes will become important for multichannel retailers: “It will allow us to use the functionality of the camera to create meaningful experiences in store.”

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Cath Kidston is using QR codes to bring its brand story to life

Lifestyle retailer Cath Kidston is another brand looking to harness the QR code’s power to link in-store and online, but is taking a more narrative approach. Earlier this month, the brand launched a QR code-based in-store experience, with the aim of providing customers with an inside view of the brand’s story that has so far been more developed online.

“There are many ways to give consumers a better, more in-depth story of the brand online but it is much harder in retail,” says Sue Chidler, marketing director at Cath Kidston. “We wanted to be able to bring some of the experience that customers get through our blog or social channels, and experiment around how we could give a better, deeper story and more content to shoppers in our stores.” 

The resulting project, a collaboration with social media platform Pinterest, places QR codes on the tags of various Cath Kidston items in store. Scanning the code through the Pinterest app directs users to a colour-themed mood board, featuring styling ideas and inspiration.  

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“QR codes have their lovers and their haters, but we felt that in this instance it was the best way to lead people to that richer content,” explains Chidler. “People who shop in store can sometimes be somewhat overlooked, and this is trying to make sure that they are part of a richer experience.”

However, while QR codes may be on the up, they are far from perfect. “This is obviously a test for us,” says Chidler. “The challenge with QR codes is that they’re not the prettiest thing to weave into a design seamlessly. So making sure it all flows and fits and doesn’t look gratuitous in an in-store environment was really important to us as well.”

And there are still millions of existing Apple and Android devices devices that do not have native QR code readers.

Technology such as QR codes is enabling consumers to shop seamlessly without human interaction, cash or cards

Josh Walker, The Future Lab

“I don’t see people picking it up very quickly here in the long term, because it’s not proven as a winner,” says Practicology’s Vincent. “If someone really well known started using QR codes and got a really big take-up, really driving impact at the bottom line, I think we’d see a lot of people using it. It needs someone in that leader space to prove the commerciality of it here before people will actually do it.”

These negatives withstanding, QR codes’ key uses chime well with the demands of the modern shopper: linking store and online, creating compelling brand narratives and facilitating frictionless payments are already top priorities for many modern retailers.

Once QR codes are as easy, if not easier, to access than Snapchat filters or contactless Apple Pay, they could prove a potent tool in times to come.

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