Rise and Fall of QR Codes: How a Pandemic Revived Them

The Conception of the QR Code

In the 1980’s, consumer demand in Japan for manufactured goods and electronics grew exponentially as their economy exploded. Automotive technologies company Denso Wave quickly realized that traditional barcodes, which can only hold around 20 alphanumeric characters worth of data, were no longer going to suffice. So, in 1994 Denso Wave unveiled the Quick Response (QR) code, which was initially created to help the company track vehicles and parts as they moved throughout the manufacturing and transportation processes. In comparison to barcodes, QR codes could hold upwards of 7,000 characters, be scanned both horizontally and vertically, and were easy to scan, even at extremely high speeds.

From production to shipping, tracking, and handling of transaction slips, many facets of their operational processes were significantly streamlined thanks to the implementation of QR codes. As the benefits of 2-dimensional scanning technology became increasingly apparent, it only took a couple years for other major automotive manufacturers such as Toyota to adopt the QR tracking system throughout their factories.

QR Codes Go Public

In 2002 Japanese consumers were able to get their hands on the first mobile phones to come equipped with QR-enabled scanners. With several popular models now in the hands of the Japanese public, domestic QR code usage increased dramatically. Consumers were able to share and exchange information, scan coupons, and access websites. However, it wasn’t until the meteoric rise of the smartphone in the West around 2012 that we began to see the QR code truly explode in popularity around the globe.

The Golden Ticket

QR codes were plastered on everything from clothing to water bottles, packaging, marketing materials and brochures, stickers on storefronts, and shopping bags. Marketers and advertisers clung tightly to their new golden ticket. QR codes had the potential to provide a gateway to more content than what could be reasonably fit on a piece of paper. They could connect customers to loyalty programs, provide augmented reality experiences, or direct users to websites. It was the new miracle of marketing technology.

First Attempt Is A Flop

Sadly, within the span of about a year QR codes went from ubiquitous to virtually non-existent. It didn’t take long for users to recognize and reject their clunky and impractical design. Most of the time, the user would point their phone at a QR code for a while only to realize they first had to download a third-party app in order to scan it. The QR scanning apps back then weren’t exactly the most stable, so oftentimes users had to fight with the scanner to get it to capture the code. Once captured, the user was typically redirected to download the company’s app, which they could have just downloaded directly from the app store in the first place. Other times, QR codes would redirect users to a webpage which was not optimized or formatted correctly for their mobile browser. Add on top of this that smartphone and mobile browser speeds at the time were significantly slower than they are today, and you have an all-around frustrating user experience.

Second Attempt Gains Traction

QR codes had all but disappeared from the public until 2017 when Apple released iOS 11. The update to their mobile operating system unlocked native support for iPhone cameras to scan and recognize QR codes. Android quickly followed suit with their own 8.0 Oreo update , and it seemed that QR codes were once again poised to take over the mobile market. Large companies began using them again and codes started popping up in public once more, but they never really lived up to their full potential. Overall, their function was generally limited to niche situations, and it seemed like most Americans couldn’t get over their perceived uselessness. In the end, the QR code comeback was quickly losing steam.

Third Time’s the Charm

And then 2020 and the Coronavirus happened. With social distancing and lockdowns in effect, society needed a touchless, contactless solution immediately. Fortunately, QR codes were the perfect answer. Many people were already generally familiar with them, knew how to interact with them, and had a phone capable of reading them. Seemingly overnight, QR codes were once again emblazoned on every storefront and kiosk imaginable. Bitly, a link management service, has since reported a more than 750% increase in QR code downloads and link traffic over the last 18 months.

Industries Adapt: A QR Comeback

The pandemic has shown just how versatile and adaptable QR codes are, and how numerous industries have benefited from their implementation. Restaurants, bars, and clubs switched out their traditional paper menusfor laminated QR codes in order to respect social distancing and keep their customers and employees safe. Public venues such as concert halls or sporting arenas have established Track and Trace programs to contain outbreaks. Some grocery stores are utilizing QR codes for contactless payment to minimize human interaction. Clothing retailers are offering contactless returns and shopping via the codes. Some restaurants have even opted to scrap the traditional ordering process altogether, letting the customer order and customize their food directly from a QR code. This barely even scratches the surface of how these codes have become ingrained into our daily lives.

QR Codes: Here to Stay?

As we quickly approach the two-year mark of the COVID pandemic, it has simply become second nature for many people to scan QR codes throughout their day. Some industry experts are predicting that this habit isn’t going anywhere , even after the pandemic ends. As digital transactions continue to grow in market share, some industries such as restaurants may continue to expand their services and features offered via QR codes.

Generating New Opportunities

For most restaurants, the pandemic not only created a massive boom in online orders, but also inadvertently created a profitable new niche: on-premise online orders. Pre-pandemic, online orders were almost exclusively associated with delivery or takeout. It’s an entirely new stream of revenue that restaurants will surely be eager to harness in the future. During an earning’s call this past August, digital ordering platform Olo’s CEO Noah Glass told analysts that digital on-premise transactions made up 1% of overall industry-wide transactions for the first time ever. This shift can be attributed almost exclusively to the use of QR codes and self-checkout kiosks.

“That’s a big move in an industry that does 60 billion transactions in a typical year to see 1% moving to digital on-premise,” Glass noted.

Raleigh Harbour, Bitley president and CEO, has stated that restaurant owners are waking up to how valuable QR technology is, beyond offering typical contactless services.

“They’re able to adjust their menu offerings on the fly to account for elements like inflation, fluctuations in food and commodities prices, and other variables,” Harbour said.

QR codes also have the potential to give restaurant owners a better idea of who their customers are. Reservation services such as OpenTable and SevenRooms can pass along basic data to the restaurant about who made the booking without sharing that data with the rest of the table. 

“If you run a restaurant that doesn’t take reservations, you don’t know who your guest is until they pay,” said Bo Peabody, co-founder and executive chairman of Seated, a restaurant booking service that incentivizes and rewards members for visiting participating eateries. “What the QR code might allow you to do is learn who that guest is right when they’re sitting down.”

Not only are clever developers and businessmen still coming up with creative ways to leverage QR code technology that benefit both consumers and entrepreneurs alike, but this is just one industry of many. In the brief period of time that QR codes have enjoyed their revival, countless industries have learned to incorporate them into their processes, both protecting consumers and employees while simultaneously discovering new profit-boosting benefits. 

At Lithios we have created many mobile applications with QR code capabilities to track hardware technologies, access online content, and unlock a variety of other functionalities for end users. If you have a technology that requires the use of QR code technology, drop us a line on our contact form!

Jonathan Baker Image

At Lithios we value outside opinions. This blog was written by one of our guest bloggers, Jonathan Baker, with feedback from the Lithios team.

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