QR codes at heart of new Woolworths virtual billboard stores – but can the codes drive real sales?

Businesses have the opportunity to save costs and expand their physical presence by using QR codes scanned with smartphones, but using them as part of a sales channel instead of an advertising gimmick requires a significant amount of effort, experts say.

The warning comes as Woolworths has joined Sportsgirl in establishing a new sales channel using QR codes, setting up a “virtual store” in Melbourne’s Flinders Street Station where passengers can scan pictures of items to set up a shopping list.

Those items will then be delivered to their homes or offices hours later.

The idea is nearly identical to one established by Sportsgirl earlier this month, which allows shoppers to scan codes for products that are then sold through the online store.

Telsyte senior research manager Sam Yip says the use of QR codes is actually a smart way for retailers to save money, as the cost of labour continues to rise.

“The cost of merchandising, to keep stock on shelves and on show, is always rising. It’s all about the cost of labour.”

“If you’re actually a manufacturer, you’re fighting for the best position on the shelf, the best position in the store. It costs money to run all that.”

The rise of QR codes also comes as retailers are fighting with the Government over labour costs and penalty rates. Using these “virtual stores” could eventually be a way to save costs, but Yip says there is a distinct difference between codes being used as an advertising gimmick, and a sales channel.

“I think consumers have always used QR codes as a way to obtain exclusive information, but now with these two companies, they’re using it as a way to transact.”

Instead of having to stock new shelves, the Woolworths virtual store can just be replaced with pictures of other products whenever the company wants to switch it up.

“With the Woolworths one in particular, it’s for customers that already have the app and are registered as a customer. But once again, it only applies to customers that want it delivered to their homes.”

In the past, Yip says these codes have only been used to access information, as they’ve been printed on posters for films, and other entertainment products. But he says there are more opportunities.

“I think it’s a good step to do something like this. It’s very early days right now. It’d be a good thing for a company like Woolworths to publish these codes on their catalogues, so you can just shop from there and make the process shorter.”

As smartphone penetration continues to grow – Australia has one of the highest smartphone penetration rates in the world – Yip says the possibilities continue to grow. But success with sales depends on making the transaction process as short as possible.

“It’s a specific customer profile that wants something delivered to the home. I think the next step is making things purely transactional, where you’re using codes to scan, and then buy straight away.”