SKUs, UPCs, & Serialized QR Codes are dead. Smart Labels are the new normal

Owning a warehouse and tracking hundreds of thousands of products can be a nightmare. Companies have to ensure that the products they are storing are enough. This estimation is done through a process called forecasting. If demand is higher than the forecast, the supply chain will often scramble to secure more materials. They will also go through the hassle of expedited transportation and logistics, and require more cash to fund all this activity.

On the other hand, if demand is lower than the forecast, companies suffer from excess resources. This would mean that their cash is tied up in inventory and resources. Profitability will suffer as there is not enough revenue coming in to fund the organization and all the unrecovered expenses.

To mitigate this, Stock Keeping Units (SKUs) and Universal Product Codes (UPCs) were made. SKUs and UPCs allow retailers to track their stock, measure sales by product and category, design store layouts and flow, and enhance shopping experiences. These tags were then upgraded into Serialized QR codes to make each barcode unique and combat counterfeiting.

 

SKU, UPC difference, blockchain smart labels

Difference between SKUs and UPCs. Both are used to track stock, but are prone to counterfeiting.

 

Contrary to its original goal, Serialized QR codes face major security flaws.

According to a Systech report, one major problem with Serialized QR codes is that counterfeiters try to trick the system by replicating serial numbers from authentic products. Companies try to overcome this by limiting the authentication process to one instance so that duplicate numbers will raise a flag. However, this restriction has one major problem— what happens if a consumer authenticates a product on a shelf but then doesn’t buy it?

Anyone can easily duplicate a QR code, add any information they want, and place it on counterfeit products to make it look nearly indistinguishable from the genuine product. This is called phantom barcoding. This threat now arises with alarming frequency in the global market.

Many companies have come up with ways to prevent phantom barcoding. These solutions include hiding the Serialized QR codes and restricting their use to brand promotion (activation campaigns). However, these solutions are limiting and often inconvenient for customers. The best way to protect these QR codes is to add another layer of security that adheres to Industry 4.0 Standards. 

These newly improved, tamper-proof, and unique QR codes are called Industry 4.0 Smart Labels.

 

Line barcode vs. QR code, serialized QR code difference

Difference between Line Barcode and QR Code. Real Items uses QR Codes backed by blockchain technology to protect the intellectual property of brands.

 

Added layer of security

Industry 4.0 Smart Labels are tags with an added layer of security called blockchain technology. The blockchain is a decentralized system of recording information, meaning it has no central point of failure. The information recorded on the blockchain can never be changed, which makes industry 4.0 smart labels tamper-proof and secure.

Real Items’ Industry 4.0 Smart Labels come in the form of QR codes with one-time pins (OTP) for two-factor authentication. Only the owner of the product has access to the OTP. Each smart label gives users access to a product’s “digital identity” which is often called a Non-Fungible Token (NFT). You simply have to scan the QR code with any smartphone camera to access this information.

 

real items smart label, serialized qr code

Real Items phygital with a smart label. All Real Items products come with a digital identity or NFT.

 

Physical products that have a digital identity are called “Phygitals.” Phygitals merge the best of the physical and digital worlds to give customers an engaging and interactive experience. Check out the Real Items store for more awesome phygitals.

Aside from giving customers a seamless experience, Real Items phygitals can prove product authenticity. Because our QR codes are backed by blockchain technology, they are immutable and can never be copied. Our anti-counterfeit smart labels also ensure that brands are able to track their products and stop unauthorized sales worldwide. 

By incorporating Real Items smart labels, sellers give customers the power to personally verify the products’ authenticity. This way, sellers do not have to bear the full burden of preventing counterfeits.

 

Brand protection

Because Real Items smart labels cannot be counterfeited, they are perfect for protecting intellectual property. We have used this to secure Shopify goods and protect brands that sell Cannabidiol (CBD) products and Jamaican Blue Mountain (JBM) coffee.

Whether your brand just recently launched or has been around for a few years, you deserve only the best security.

Are you ready to future-proof your brand? Simply fill out the Real Items questionnaire to get started. Join our Discord community to meet other brand owners as well.

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