Bar-code market poised for growth

By Staff -- Logistics Management, 6/1/1998

The worldwide market for bar-code equipment will top $18 billion by the year 2000, predicts a market research firm covering that industry. Venture Development Corp. (VDC) of Natick, Mass., says that foreign sales should spur the market to grow from its present $10 billion as the practice of bar coding spreads beyond the United States.

Although compliance labeling--demands by large, influential buyers that vendors use bar codes as a condition of doing business--often gets credit for driving bar-code-equipment sales, VDC director Christopher John Rezendes believes that's not the case. He says that only 15 percent of the current $10 billion market results primarily from compliance labeling. The vast majority of sales are driven by companies that adopt bar coding to gain process improvements in areas such as logistics and supply-chain management, he contends.

Although foreign adoption of bar coding will drive the market in the short term, industry suppliers will have to take other steps to sustain high sales into the next century. To spur long-term growth, Rezendes says, industry suppliers must educate their customers to bolster such emerging technologies as two-dimensional (2D) bar codes. Because a 2D bar-code symbol uses both the vertical and horizontal axes for encoding data, it can pack more information into a smaller space than the standard linear or one-dimensional bar code. "The [use of] 2D fell down on training," he says. "A lot of end users don't know what to do with it."

In the future, Rezendes believes, data-collection terminals will take on more functions than simply scanning bar codes. He expects handheld terminals to become multifunctional, capable of receiving data input from video and radio-frequency signals, or even the human voice.