QR codes were invented in 1994 as a way to streamline automotive production. But lately, new QR code uses seem to be gaining momentum, especially with brands and marketers.
Once deemed a dying fad, QR codes weren’t used much at all in North America until 2017, when Apple’s iOS 11 update enabled its native camera app to scan QR codes instead of requiring the use of a third-party app.
That advancement, combined with the pandemic — which caused many restaurants to swap out paper menus for digital ones — presented an opportunity for the decades-old digital channel to gain traction with consumers.
“People used to hate QR codes,” Jon Stern, co-founder of Ringpin, told Built In. But usage data shows they’re coming around: 75.8 million people in the United States scanned a QR code on their mobile devices in 2021, a 15.3 percent increase from 2020.
And QR code uses have expanded beyond just restaurant menus, which means they’re likely here to stay.
What Is a QR Code?
A QR code, or “quick response” code, is a kind of barcode that can be read by a machine like a scanner, cell phone or iPad. It uses pixels arranged in a square grid to store information such as links to websites, social media profiles, menus, songs and more.
In order to work, a digital scanner groups together and analyzes the QR code’s unique pixel pattern and translates it into digital information.
The Benefits of QR Codes
Cost Effective
QR codes can help a variety of industries save money, but it’s especially true for the restaurant industry, which uses QR codes to easily update their digital menus and not have to waste time and money (not to mention paper) printing out new ones. Some QR code menus can also allow patrons to order their food and pay directly on the website, which can streamline the dining experience and help restaurants turn tables faster.
Tracking Campaign Performance
The digital form of QR codes makes it easy to analyze how much traffic and interaction a code is getting. Some QR code platforms are compatible with Google Analytics, which can store demographic and user behavior data.
Data Storage
QR codes have the ability to store large amounts of data. Traditional barcodes can store around 20 digits, but a QR code can store approximately 7,000 characters. QR codes also aren’t limited to just numeric digits; they can store alphabetic characters, binary code, control codes and more. The flexibility of QR codes means they can have a variety of use cases ranging from simple text to hyperlinks and videos.
The Disadvantages of QR Codes
Security Risks
Although a QR code by itself is not dangerous to a user and can’t be hacked, the link or information someone attaches to a QR code could put users at risk.
For instance, a hacker could create a QR code that sends the user to a website that ultimately steals their passwords or tracks their phone. This kind of cybersecurity risk can be thought of as similar to the risks many people take every day just by being on the internet, except users typically don’t see where a QR code is taking them, which makes the risk more difficult to ascertain.
Functional Inefficiencies
Despite the growing popularity of QR codes, some people may still not be comfortable using them; the process isn’t necessarily intuitive.
Wi-Fi and cellular data service also impact the effectiveness of QR codes. Without a reliable internet connection, QR codes aren’t much use, which might help explain why you don’t see as many QR codes in small town cafes as you do in downtown restaurants.
Privacy Concerns
Some have expressed concerns about what information is collected from users who rely on QR codes. Since a QR code typically opens a internet browser on a mobile device, the user may encounter third-party cookies or first-party data collection, which they may not want.
How Are Marketers Using QR Codes?
The reasons for marketers to use QR codes are clear: build direct connections with customers, collect first-party data and add attribution tracking to traditional advertising channels like mailers and billboards.
As of right now, though, QR codes are mostly used in the same straightforward way: as a way to drive website traffic with physical marketing materials. But there’s growing anticipation that QR codes will be used in more creative marketing ways soon.
Alex Wan, co-founder and CEO of Periphery Digital, a Chinese-language digital marketing agency in Vancouver, told Built In that QR code use is “still fairly basic here.”
“Until we get to the point where everyone sees the QR code and is interested in scanning it,” Wan said, “it’s going to be really hard for us to adopt it in the same way that China has.”
QR Code Uses Today
Customized Landing Pages
Sharat Potharaju is the co-founder and CEO of MobStac, a “physical-to-digital experience management solution.” He thinks dynamic QR codes will be used more often in the years to come.
Dynamic QR codes give marketers the ability to use the same physical QR code, but they direct the people who scan them to different campaigns, based on several variables, like location, time of day, or day of the week.
Potharaju said to picture a QR-code-based menu affixed to the door of a restaurant, and then to imagine that scanning it in the morning yields a breakfast menu, scanning it in the afternoon yields a lunch menu, and scanning it in the early evening yields a happy hour menu.
“The ability to do that seamlessly, without the need for you to be able to intervene, is what dynamic QR codes [do],” he said.
Depending on the scanner’s location, QR codes also have the ability to direct people to one of several geographically tailored landing pages.
And if the consumer has scanned a QR code from a particular brand already, on the next scan, they can be taken to a segmented page that’s populated with information they’ve already given.
For example, shoppers who haven’t bought from the brand in the previous 90 days can be taken to different pages than shoppers who bought something from them last week.
“You can really make it relevant and personal to people,” Stern said.
Payment Platforms
Possibly one of the more popular applications of QR codes is in payment platforms. If you’ve used Venmo or CashApp, you’ve probably experienced the ease of scanning a vendor’s personal payment QR code without having to collect and type in all their information to send a payment.
QR code payments don’t appear to be a passing fad either. In 2020, the QR code payment industry was valued at around $8 billion and is expected to reach approximately $35 billion by 2030 — a 16 percent increase.
Calls-to-Action on Physical Items
As the usage of QR codes grows, how they look on physical items is bound to fluctuate. Some QR codes on items like brochures or consumer packaged goods look like they were slapped on as afterthoughts. And they often fail to provide clear indications as to where users will be taken after scanning it.
“It’s not very pleasant to look at a square code,” Wan said. “What will help increase usage is having designers ... incorporate these square pixels onto marketing assets in ways that are actually eye-catching and pleasing, for people to know that you should actually be scanning it.”
But not all QR codes have to be used as an afterthought.
Consider the QR codes in Japan subway stations designed like Disney character faces, or one that Zara displayed in a retail store window emblazoned with the word “SALE” to alert passersby exactly what they’re getting out of scanning it.
Wan thinks extending QR codes beyond a simple black-and-white box with a “Learn More” CTA is one of the first ways in which QR codes can evolve to be more consumer-friendly.
Integration With Search and Social Ads
Although QR codes can’t be used to identify individuals on the initial scan, they can be used to take note of specific devices used in specific locations — data which can be integrated into Google and Facebook ads, Potharaju said.
So if a person scans a QR code on the back of a bottle of Nestle water, it’s possible Nestle ads could target their device next time they use it to log into Facebook or Google.
Potharaju calls it “building digital ads based on cohorts of physical activities you’re doing in the real world.”
Providing Consumers with More Information on Products
Similar to how augmented reality adds to one’s experience with the material world (rather than replacing it, as is the case with virtual reality), QR codes are used as digital extensions of physical objects.
Museums have done something similar for years, allowing curious visitors to quickly pull up extra information on a particular artwork with their phones. It’s possible we’ll start seeing this adopted more frequently by e-commerce brands.
Stern said his company Ringpin is working with businesses that want to unify the physical and digital.
He’s helping a horticulture brand implement QR codes on little tags affixed to each plant that, when scanned, call up different care instructions depending on the plant’s location.
Ringpin is also helping a transparency-focused clothing brand put QR codes throughout its physical retail stores, with the ultimate goal of allowing shoppers to scan products to verify their authenticity and receive information about where the material was sourced.
“I think brands are just figuring out how to do it right now … it’s still in the education phase,” Stern said. “People are experimenting, trying to figure out what to do.”
