Amazon Transparency: A New Future For Barcodes

The Amazon Transparency program was recently launched to help vendors track inventory through its distribution lifecycle via the use of a scannable barcode. In this post, I'll share some information about how it works.

What is Amazon Transparency?

It is similar to a UPC or EAN in that a numerical code is attached to the product, which is then scanned to identify what the item is. However, it is far more intelligent than the current barcodes used. Unlike UPCs and EANs that only show you what the product is, with the Transparency program a retailer or customer can trace products right back to the point of manufacturing. This means that they have access to more data such as where the item was manufactured, the production date, the ingredients and the origin of the materials.

Why Invest in This Program?

The Amazon Transparency program was introduced as a way to help reduce counterfeit products. With the rapid growth in private-label items and easier access to importing goods from the Far East, Amazon.com, Inc. ("Amazon") has seen an influx of counterfeit products on the platform. This has been damaging to the company's reputation as well as the customer experience. While Amazon introduced brand gating to the mix, that is not a preventative measure nor a sustainable solution. Hence, they are introducing a preventative solution with the Transparency program.

With one simple scan the customer or retailer will immediately be able to check the authenticity of the product and be able to trace the item back to the manufacturer through the chain of distribution. It gives product transparency to the customer by providing certain information as mentioned earlier; place of manufacturer, date of manufacture, etc. It also helps brands connect with their customers and makes it easy to manage product expiration and recalls.

How Does it Work?

With Transparency, every unit requires a unique non-sequential 26 digit alpha-numeric code, which can be printed as a scannable barcode. When I state each unit, I mean every single unit of inventory for that one SKU. For example if you have 1000 units for SKU number ABC123, you will need 1000 unique codes that must be attached to every single unit, either on the product or the retail packaging. Once codes are attached to the items, they are scanned. This generates a data file in the Transparency database. The brand can then choose to add additional data (such as product location, lot numbers and ingredients) and upload this directly into the Vendor Central dashboard. I’m sure over time the level of additional data will increase if the program becomes more popular and customers begin to depend on the detail.

When the inventory arrives at the Amazon Fulfillment Centers, the codes on items participating in Transparency are scanned to check that the items are authentic before Amazon receives the stock. If the items are not recognized, they’ll be rejected. They will also scan the items prior to shipping them out to the customer.

It’s not only Amazon and other retailers that can scan the items. A mobile app allows customers to scan products, as well. The more additional information a brand provides, the more they are engaging with the customer and giving them a great customer experience. In addition to customers having visibility of the basic product information I mentioned earlier, they can also have access to related product recommendations and methods to register products for warranties. This is very much dependent on the data the brand shares and uploads to the Transparency database. The sky’s the limit!

The Future of Transparency

This program is currently only available for brands on Amazon. However, there are future plans to roll this out to other retailers. With content evolving, more and more people want detail, and they want it immediately, which the Transparency program offers. Could Transparency be the future of barcoding in retail while UPCs and EANs become a thing of the past? Only time will tell.