Automated management of expiration dates with GS1 DataBar: A GS1 Korea Pilot and Case Study

Expiration dates are one important aspect of ensuring that the food consumers are buying is as safe as possible. Efficiently managing these dates at the point of sale is becoming a critical task for both retailers and food suppliers.

However, most expiration dates are marked on products in “human-readable” formats only, which means that the process of verifying them cannot be automated. Furthermore, there is no way to automatically incentivise shoppers to buy “less-fresh-but-still-fine” food products.

To address these issues, GS1 Korea launched a GS1 DataBar pilot with a major retailer and two of its food suppliers: LOTTE Mart, a hypermarket chain with 191 stores; Pulmuone, Korea‟s market leader in tofu, soybean sprouts and refrigerated noodles; and Konkuk Dairy & Ham, a major supplier of private-label milk products for LOTTE Mart.

Preventing the sale of expired items
The first goal of the project was to stop the sale of expired products. Since expiration date verification is done manually, there is a great risk that retailers accidentally sell products that are past their sell-by date. A system was implemented using GS1 DataBar to automatically inform cashiers and consumers that a product has expired. If an item past its sell-by date is scanned, a pop-up message appears on the checkout screen.

Markdowns for items approaching their expiration date
Another goal of the pilot was to enable automatic markdowns for items that are close to their expiration date. Consumers usually choose products that still have a long shelf life ahead of them. Retailers and suppliers would rather that consumers picked items that were soon to expire. This sort of buying behaviour is even more likely when dealing with fresh foods and perishables such as the pre-packaged soybean sprouts and carton-packed milk which were the focus of the pilot project.

Again, using the GS1 DataBar an automatic process was put in place which created a discount depending on the number of days remaining until the expiration date - products were given a 20% markdown when they had four days left before expiring and a 40% discount when there were three days left.

Better sales, better profits
The pilot – the first of its kind in Korea – clearly revealed the powerful and quantifiable benefits of GS1 DataBar. For soybean sprouts, increases in total sales and net profit were 60% and 22%, respectively; for milk products, these were 32% and 48%, respectively. For the retailer, the automatic markdown process resulted in improved efficiency that allowed employees to focus on other tasks.

In partnership with Gallup Korea, GS1 Korea conducted a survey which also clearly proved the effectiveness of this GS1 DataBar-based model in enhancing consumers perceptions and opinions of the safety of the food they bought, and also revealed consumers satisfaction over having more cost-effective shopping experience in an environmentally-friendly store.

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