QR CODES CONTINUE TO SHINE IN 2021
COVID-19 drove digital acceleration through increased demand & utilization of contactless technology.
January 25, 2021
2020 challenged the world to rapidly adapt as COVID-19 disrupted our lives. As a result, adoption of existing technologies accelerated to change how we work, eat, shop, travel, socialize and access to entertainment & health care services.
As a digital marketing professional, my interest in QR codes as a simple cross-device solution, was piqued by finding icons for scanning them on my phone’s menu and google app. I expected this to be a catalyst for adoption and hoped that QR codes would eventually become a way to make live/streaming TV, print, or digital out of home marketing efforts actionable. Instead of remembering a brand or product seen on TV, users could point their phone at the QR code to learn more. In the summer of 2020, my team implemented QR codes on our connected TV campaigns and I was delighted to see viewers scan them. As industry data for 2020 was published, I dug in to analyze the impact COVID-19 had on digital acceleration.
At the beginning of 2020, a KPMG study found that 67% of U.S. CEOs expressed concerns about migrating all of their business to the cloud due to fear that customers would understand the technology or be ready for a change. By September 2020, 74% of CEOs said that digitization of operations and a seamless digital customer experience have been significantly accelerated by the pandemic.
“Any resistance in our clients’ mindsets to moving to the cloud or the next generation of digital solutions has largely, if not entirely, evaporated. I think we’ve seen three to four years of progress in just three to four months."
QR codes have become essential technology for restaurant & business operations, as a tool to provide a safe environment for employees and customers. Using QR codes, consumers pick up store purchases without leaving their car (or even opening their window), pay without touching a terminal, and order food with digital menus. The adoption of QR codes will continue to have a major impact across industries, when socializing no longer presents a health risk & social distancing is simply a personal preference.
THE RISE & FALL OF QR CODES
Denso Wave, a Japanese corporation, introduced the quick response (QR) code, in 1994. Masahiro Hara was inspired to create QR codes while playing Go, an ancient strategy game that involves moving black & white stones across a grid. This versatile design solved an industry wide problem with the UPC code’s low character limitation.
Today’s QR codes can store 200 times more information than UPC codes from 27 years ago. First adopted by Toyota, QR codes became widely used in the automotive industry. In 2002 mobile phones with QR scanners hit the Japanese consumer market. As a result, QR codes made the leap from industrial use to the general population.
Snapchat's popularity, along with smart phone penetration, lead to an increase in QR code awareness. As a result, Apple developed the first built-in QR code scanner, in 2017
US consumers frequently encountered QR codes throughout their daily routines; on product packaging, app downloads, bills, and event/travel tickets. However, most people exposed to a QR code were still unsure how to scan it. QR codes ranked #6 on Time's 2017 "20 Most Successful Technology Failures" list - along with Dreamcast, Palm Pilot, & TIVO.
THE COMEBACK
Despite going mostly unnoticed by the general population, QR code scanning technology in smartphones continued to advance. Early adopters of QR codes had to download a 3rd party app to scan them. The iPhone's integrated camera QR scanner was not a well known feature until an update in early 2020 added a dedicated QR code icon to the pull-down control center menu.
Android OS integrated QR scanning technology in 2017 that still relied on opening the Google Lens or Chrome app. This was upgraded to a full integration with the camera with the release of Android 9, in late 2018. The features on devices running on the Android OS vary by manufacturer & price tiers (eg. Samsung Galaxy vs Tracfone Prepaid). As a result, there are still 251 QR code scanner apps on the Google Play store in 2021.
In 2020, QR codes proliferated along with the pandemic; suddenly appearing in restaurants and storefronts. In a survey conducted by Statista, 46.8% of respondents said that they have noticed an increase in QR codes since shelter-in-place (40.2% of those respondents chose "strongly agree"). Aside from the pandemic, familiarity with QR codes & advancements in technology made the transition towards adoption easy for end users.
Google trends data; interest is based on users search queries in the USA between 2012-2020. Data is indexed relative to peak interest/the highest point on the chart. A value of 100 is the peak popularity for the term. A value of 50 means that the term is half as popular. Date range, 2012-2020, includes peak interest for both search terms.
QR Code Usage Trends
Google Trends provides a broad sample of data on internet user's interest or curiosity about a topic, over time. To understand familiarity, the chart above uses the search term "what is a QR code". The search term, "how to scan a QR code" was used as a gauge for intent to scan one.
Between 2012-2016, search queries show that there was interest in learning about QR codes was generally higher or equal to intent to scan one. Despite increased exposure, Google did not see a significant increase in users searching for “what is a QR code”, indicating familiarity with the technology.
Alternatively, users searching to figure out how to scan a QR code was more than twice as high in 2020 as any other time, over the last decade. This indicates that searchers intended on scanning a QR code and very likely, scanned their first QR code in 2020.
2. Statista, Sept. 2020
3. eMarketer, US Smartphone Barcode Scanners and Penetration, Dec. 2020
4. Beaconstac, 2020; QR Code Menu 101: QR Codes for Safe Dining in 2021
HOW ARE QR CODES USED IN 2021?
Masahiro Hara never imagined that his QR codes would be used beyond the industrial world. In a recent interview he said, “I’m really pleased that it’s being used to help improve people’s safety. Back in 1994 we were focused on its industrial use. We never thought it would be used for something like this.”
He has been inspired to shift his focus to healthcare, “I’ve been thinking about how to increase the amount of information that can be stored so that the code can handle images,” he said. “For example, it could be possible for people to carry around their x-rays and cardiograms in QR code form.”
PAYMENTS & COUPONS
According to a study published in eMarkter's "Payments Ecosystem" report, in 2019, 29% only of US smartphone owners had made a mobile payment in-store. They estimated that number jumped to $131.4 billion in 2020 with 86.9 million mobile proximity payment users. This represents an 18.9% and 31.6% jump year over year, respectively.
In the same report, they found that 60% of US merchants accept contactless payments. QR-based payments are simpler for merchants to set up & do not require as much infrastructure compared to NFC-based systems. This has made it easier for SMB sellers to implement contactless payments without upgrading POS systems.
A study from Juniper Research has found that payments using QR codes will be $2.2 billionin 2025, up from $1.5 billion in 2020; equating to 29% of all smartphone users worldwide. They estimate that QR code payment users, in the USA, will grow 240% between 2020-2025. Paypal & their partnerships with CVS and other large retailers, have helped accelerate QR code payment utilization.
In 2017, Juniper Research expected that 1.7 billion QR code coupons would be scanned by 2022 but revised their estimate to 5.2 billion emarketer estimates that 65% of the population will have scanned a QR code coupon by 2021, in a forecast published in December 2020.
DIRECT MAIL
QR codes sent on direct mail are a seamless way to bridge print & digital marketing. Using UTM or trackable QR codes, advertisers can track the impact of print/direct mail marketing on website visitors. QR codes delivered to mailboxes are found on invoices/bills, acquisition marketing filers, coupons, offers, app downloads.
Synchrony bank added a QR code to their promotional fliers that prompted recpients to “scan for current rate.” This provides the recipient with up-to-date, real-time information that can be modified by the sender.
AIR TRAVEL
Airlines have used QR codes on printed and digital passenger tickets since 2011. More recently, QR codes have been used at airports to pay for parking and helping returning travelers remember where they parked their car.
As travel resumes, China has proposed a global QR based mechanism to identify travelers health/vaccination status. Beyond travel, immunization or negative test results stored via QR codes could be a key player in re-opening workplaces, with minimal overhead cost. Travelers in China can also scan a QR code to check if they have traveled on a train or plane with a passenger that tested positive for COVID-19.
Wifi access via QR codes has emerged at airports, cafes, and other spaces; allowing visitors to easily access wifi without taking time away from employees. Additionally, passwords can be routinely changed without new signage.
LOCAL TRAVEL
Local travelers rely on QR codes to access shared bikes or scooters, also known as micromobility. In 2019, 136 million trips were taken on shared micromobility in the USA alone, according to the National Association of City Transportation Officials (NACTO). While travel by any mode of transportation dropped by 70%, the Bureau of Transportation reported that micromobility had only decreased by 44% and rebounded quickly. NACTO also reported that in April 2020, the most used citi bike share stations were at hospitals. Largely due to micromobility companies providing free access to bikes & scooters for healthcare & first responders.
RESTAURANTS
COVID-19 has negatively impacted restaurants more than any other industry in the USA. In September 2020, yelp reported that 61% of restaurants have been marked as permanently closed. Breakfast and brunch restaurants, burger joints, sandwich shops, dessert places and Mexican restaurants had the highest rate of closure. Pizza places, food trucks, bakeries and coffee shops were able to shift to delivery or quickly adapt to grab-and-go models and had the lowest closure rate.
Digital restaurant order growth rates went up 63% in March and more than doubled to 138% by May, when restaurants began to reopen to dine-in across the country. Digital acceleration due to COVID extends beyond the workplace. Morgan Stanley analysts projected that online delivery orders will comprise 13% of all U.S. restaurant sales. Before the pandemic, they expected to hit that number by 2023.
40% of US customers would prefer to view menus from mobile devices and 35% prefer to order and pay in the same manner, according to Oracle. In addition to providing a safe environment for customers & employees, digital menus are an opportunity for restaurants to reduce menu costs & streamline operations. According to Toast, a restaurant technology provider, 31% of restaurants update their menus monthly, while 25% update their menus weekly, and 24% update their menus seasonally or every few month . Restaurants using digital menus can reduce costs of printing new menus, easily feature daily specials, and avoid disappointment by removing sold-out menu items before a customer has decided to order them.
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