The days of pure DTC are gone, we are living in the days of digital first! Businesses that were founded online are pivoting and adapting to new marketplaces and social media channels (can anyone say Tik Tok?).
But even in a digital-first world, many growing businesses still view big box retail as a major sales opportunity. After all, in-person shopping accounted for over 85% of all retail in the first half of 2022, according to US Census data, representing a big opportunity for growing brands to compete on both the virtual and brick-and-mortar shelf.
Selling in stores presents entirely new challenges and opportunities for growing brands. New target audiences, packaging considerations, and retailer requirements can all seem unfamiliar and daunting. Fortunately, there is one key set of knowledge you can leverage at major retailers globally to ease your entry into their supply chain. These are GS1 standards, administered in the United States by GS1 US.
The Power of the Prefix
Growing brands that want to expand where they sell typically become GS1 members. Becoming a member helps you get on your way to creating a Global Trade Item Number (or GTIN), a globally unique identification number that is encoded into UPC barcodes to identify products as unique. This will become important as you start to list on new marketplaces and apply to supply retailers. On a retail shelf, the GTIN is encoded into a UPC barcode that can be scanned at retail checkout.
There are two ways to go about creating your GTINs. GS1 US single GTINs can be licensed individually, which is great for a business just starting out with only a one or two products. But for a growing brand with an expanding product line, a GS1 Company Prefix may be the better option. This is a seven-to-ten-digit number that serves as the basis for identifying your products with GTINs that can be linked directly back to your company. You can create between 10 and 100,000 GTINs at one time, depending on the length of your GS1 Company Prefix.
The first benefit is clear – GTINs cost less in bulk! But there are other GS1 standards that become critical as your business grows that are enabled by a GS1 Company Prefix. A GS1 Company Prefix allows you to generate additional identifiers along with your GTINs without any additional cost. We are going to focus on two of these. The first is the Serialized Shipping Container Code, or SSCC. The SSCC is a number assigned to logistic units, such as containers, cartons or pallets and provides a unique identity to that specific logistic unit. Think of it as the license plate for every carton in your shipment, allowing far more clarity as to where your products are in the supply chain. Even the smallest capacity GS1 Company Prefix allows you to create 1 million SSCCs. The SSCC can be carried within a GS1-128 barcode, which is printed on your logistics label for easy machine-reading.
The second identifier you can generate when you license a prefix is the Global Location Number, or GLN. The GLN is used to identify legal entities and physical locations, which means you can use one to identify your company as a legal entity and another to identify a particular supply chain location, such as a dock bay at your factory. Just like a GTIN, a GLN is globally unique, and serves as a powerful tool to track and trace both your raw materials and your finished product throughout their manufacture and sale. Both the SSCC and the GLN are free to create when you license a GS1 Company Prefix and boost your ability to uniquely identify your product and company on a global scale.
Level up with EDI
Peruse the supplier guidelines of major retailers like Target, Walmart, Dollar General or Nordstrom and you will repeatedly come across the acronym EDI. Here in the US, many of the major retailers require the use of EDI, or Electronic Data Interchange, to send and receive digital documents to their suppliers, the most common of which are purchase orders (POs), invoices and advance ship notices (ASNs).
EDI provides 3 key benefits. First, it automates processes that must otherwise be performed with human intervention. Imagine a purchase order is received via EDI. That PO can be automatically populated into your order management system with a single click, which will also notify the sender you received the PO. No email confirmations required! You are then able to send the request to your fulfillment house with another click. Once the goods ship, your ERP can generate an ASN and an invoice for dispatch, both of which will go via EDI so you can be confident of receipt.
As your business grows, the ability to send and receive notifications and requests via EDI will save thousands of man hours otherwise spent sending emails and manually creating logistics orders and invoices. This reduction in manual intervention provides two additional benefits. EDI helps reduce chargebacks and other costs associated with errors and it improves the reputation of your business as errors decrease.
For a growing business, EDI might seem overwhelming, as it requires some investments in your technology. Fortunately, there are many agencies and other solution partners that can get you started. There are even services that can accept and send EDI transmissions on your behalf and translate them into standard documents for you until you get a full EDI system up and running. You can search the GS1 US Solution Partner Finder for some companies that can help you get started. Check out how one GS1 US member Crane gained visibility and streamlined fulfillment with EDI.
Dive into the details with RFID
RFID, or Radio Frequency Identification, has been talked about a lot since the early 2000s. The technology features a tag attached to an item and a reader that can detect the tag within a certain range, whether that tag is directly in sight of the reader or not. Have you ever watched the progress of a marathon runner on the race’s website? That process is powered by RFID. An RFID tag on a runner’s bib communicates with RFID readers positioned at checkpoints throughout the race and maps the runner’s progress.
Retail’s use of RFID works in a similar way. Products are tracked efficiently as they move from factories to warehouses, and finally to retail locations. Maybe you have seen this as a consumer browsing the website of a local retail location. If you can see live-inventory counts online, that store likely has RFID tags in use.
Several factors have powered a revolution in RFID use in the last few years and inspired its adoption by multiple major retailers (Nordstrom, Macy’s, Walmart). The pandemic fueled the rise of buy online- pick-up in store (BOPIS), the push for retailers to fulfill ecommerce order directly from stores and dark stores, and demand for inventory increased incentives to sell every individual unit of a particular product. Because RFID tags contain the technology to individually identify each item, many large retailers recognized RFID could help them responded to these major shifts in consumer behavior.
RFID has the additional benefit of significantly reducing the manpower required for receiving product and counting inventory, tasks that otherwise require manual labor to count product. One worker armed with a mobile RFID reader can scan entire shipments and storage shelves to verify inventory. And those same efficiencies power a positive customer experience, allowing associates to quickly verify the availability of an item and find it fast for the in-store customer to purchase.
Like EDI, implementing an RFID strategy that fulfills vendor requirements can seem intimidating for a growing business. It will require you to invest in the RFID tags themselves (generally a few cents each), readers and a technology strategy for managing your now individually identified products. But many growing businesses report rapid returns on the investment, and a solution that helps them not only sell to more retailers but improve processes in their DTC business as well. And just like EDI, there are partners out there to get you up and running. Check out how RFID powered growth for GS1 US member Southern Fried Cotton.
GS1 standards came about to make it easier for businesses of all sizes to work together efficiently. Understanding and leveraging the power of GS1 standards is the mark of an expanding business, one that needs to maximize efficiencies so it can focus on innovating product. And you aren’t alone– remember you can always reach out to GS1 US Member Support Services for guidance in getting started.