Barcodes, Customer Research and Model T’s

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One of the greatest-ever influencers of retailing died in 2011, aged 81. Alan Haberman, the former President of First National Stores in Boston USA was largely responsible for introducing today’s retail barcode system. The benefits of barcoding stock had been recognised since the 1940’s but since then different retailers had developed different systems. Some were based on the dots and dashes of morse code, some on colour codes and some on patterns. Haberman’s genius was to perfect an industry-standard system. When reliable barcode scanners became available in the 1980’s Wal-Mart and K-Mart quickly adopted his system and were able to keep track of stock, place orders and identify demand for product with unprecedented speed and accuracy.  

Other Supermarkets were quick to follow and complement it with Customer loyalty cards which enabled them to deduce a profile of individual shoppers from spending habits. Someone who regularly bought nappies and baby food was likely to be interested in a fashion offer whilst someone buying beer and ready meals was more interested in car insurance and personal loans.  

This was a major development in todays sophisticated CRM (Customer Relationship Management) systems. They have grown like topsy and nowadays can process data from footfall counters and carpark ANPR systems as well as sales. Haberman’s determination to introduce barcodes accelerated the industry of Customer Research which has now grown to a level of sophistication undreamt of 30 years ago.  

But Customer Research is not without its critics. When Henry Ford was asked about customer input when he developed the Model T he allegedly said ‘If I’d asked people what they wanted, they’d have said faster horses’. That is often quoted by people suggesting Customers need to be told what they like.  But Steve Jobs of Apple was more realistic: ‘It’s really hard to design products by focus groups. A lot of times people don’t know what they want until you show it to them’.  

Ford’s disdain for CR bit him in the 1930’s when he lost sales to the newly-formed General Motors group. Steve Jobs was more intuitive – he understood that businesses needed to listen to Customers but that doesn’t mean making decisions based solely on their input. Neither Haberman, Ford or Jobs actually invented their product but they did see the size of untapped demand if their product could be made cheaper and more accessible.