Digimarc® Barcode: A Quantitative Model of Labor Cost Savings for Retailers

The Digimarc Barcode represents a significant evolution in barcode technology – rather than the small black/white set of bars constituting a Universal Product Code (UPC) or European Article Number (EAN) symbol, a Digimarc Barcode contains the same data but distributes it invisibly across the entire package with no special inks, markings, or printing processes. Digimarc Barcodes can coexist on packages with traditional barcodes.

This innovation is a new application of the Company’s well established technology of digital watermarking. It provides significant improvements in scanning the traditional barcode on consumer product packages and labels. The scanning improvements enable significant cashier labor cost savings in high-volume retail environments. This labor cost reduction can be achieved with minimal impact to existing infrastructure and processes of retailers.

Digimarc has built a Quantitative Model and authored an accompanying white paper that analyzes the potential Annual Labor Cost Savings that can be realized from adoption of the Digimarc Barcode. The model calculates the total cost of ownership (TCO) and estimates the return on investment (ROI) in high-volume retail market segments. The model is based on estimates of key factors bearing on the cost of cashier labor associated with scanning goods at checkout within retail markets.

The model indicates that employing the Digimarc Barcode to augment the traditional barcode is likely to generate significant savings in cashier labor costs, yielding very attractive ROIs. The greatest benefits are expected to accrue to high-volume retailers where checkout time is a critical throttle point. The model estimates that the total Annual Labor Cost Savings for the group of 120 global high-volume retailers profiled in the model would be more than $500 million for a single item per minute (IPM) improvement in scanning rate at checkout.

The white paper includes a hypothetical example to illustrate how the Model works. In the example, a U.S. retailer with $10 billion in annual sales, assuming full deployment and harvesting of benefits, could realize a 5-year ROI over 1200%.

The model includes a ROI Calculator for retailers and other interested parties to study the effects on Annual Labor Cost Savings and ROI under various assumptions.