1. BarCodes

2. In 1973 the grocery industry established a standard method for the identification of products using printed bar codes, now known as the Universal Product Code (UPC).

3. Pick up virtually any item in a grocery store and its packaging will contain a bar code that identifies the producer and the specific product. Indeed, bar codes can be found on almost every item in a retail store, or any package in transit at a shipping company, or book in a library.

4. Following the adoption of the first UPC standard, it took several years for the codes to become truly universal such that electronic bar scanners could be used for automated checkout at the grocery store.

5. The system works well, providing producers and merchants with a reliable method of tracking and managing their goods. Indeed, the bar code solution is so effective that variations are used extensively in inventory management applications ranging from library book circulation systems to package tracking for delivery services—by scanning in a bar code, a package can be monitored at stages from pickup to eventual delivery.

6. The system as described is, essentially, an inventory management system, one that can reach all the way from the producer to the consumer, touching every point in between – the concept of “supply chain management” is fundamentally important, especially in the manufacturing sector.

7. In the earlier example of bar-coded purchases, the customer remains anonymous, disconnected from any specific purchases. However, stores (and manufacturers) have become quite interested in the buying habits of individuals for marketing and branding purposes.

8. In the grocery store example, the first manifestation of target marketing was the concept of printing selected coupons on the back of the sales receipt, based upon the items purchased in that particular sale. If you bought cereal, you might get a coupon for a competing brand of cereal.

9. A more recent innovation attempts to connect the shopper to his or her purchase history. The store issues a “preferred shopper” card that uniquely identifies the shopper (or, at least, the family of the shopper).

10. Each time the card is used, the transaction is recorded and purchase information accumulated, thus establishing a comprehensive history of purchases for that shopper over time.

11. The purchase history can be used to detect patterns in consumer behavior, and implement target marketing based upon known preferences.

12. A good introductory description of bar code technology can be found at http://www.howstuffworks.com/upc.htm.