Omni Talk Retail Podcast Summary

Title: Invisible Barcodes: The Innovation You'll Never See (And That’s The Point) | Ask An Expert
Host: Omni Talk Retail (Chris Walton and Anne Mazinga)
Guest: Dave Stack, Former VP of IT and Store Innovations at Schnucks
Release Date: May 29, 2025

1. Introduction to Invisible Watermarks

In this episode of Omni Talk Retail, hosts Chris Walton and Anne Mazinga delve into the world of invisible watermarks, a cutting-edge technology revolutionizing retail operations. The focus is on invisible barcodes, more accurately termed invisible watermarks, which are subtly embedded into product packaging to enhance security and streamline the checkout process.

Chris Walton (00:08):
"Omnitalk fans, there is a new technology out there and no matter how closely you look for it, you won't see it. And that's exactly the point."

2. Meet Dave Stack: The Expert Behind the Innovation

Dave Stack, introduced as possibly the foremost expert in deploying invisible watermarks in retail, shares his extensive experience and insights into how this technology is transforming the retail landscape. His background as the former VP of IT and Store Innovations at Schnucks positions him uniquely to discuss practical applications and benefits.

Anne Mazinga (00:16):
"Dave, thank you so much for joining us."

3. Understanding Invisible Watermarks

Dave Stack breaks down the concept of invisible watermarks, explaining their functionality and integration into retail packaging without altering the physical appearance.

Dave Stack (02:19):
"You can call it an invisible barcode, but it is a manipulation of the product packaging at the pixel level to embed a unique sequence into that package that is completely undetectable."

These watermarks are designed to be read by scanner scales and hand scanners, ensuring that every side of the packaging is covered, making unauthorized scanning and theft extremely difficult.

4. Implementation in Retail Stores

Implementing invisible watermarks is straightforward from an operational standpoint. Dave details how the technology integrates seamlessly with existing store infrastructure, particularly scanner scales like Zebra's MP7000s.

Dave Stack (06:29):
"From a store operations viewpoint they didn't notice the difference. It does help the front end efficiency because even the checkers now again they don't need to look up that plu."

The process involves collaboration with Digimarc, where watermarks are embedded into the brand’s packaging artwork before it reaches the printers, ensuring no disruption to the standard printing processes.

5. Use Cases: From Salad Bars to Gift Cards

Preventing Theft at Self-Checkouts:
One primary use case discussed is combating theft in self-checkout areas. Traditionally, items like salad containers were manipulated to appear as cheaper items (e.g., bananas) at the scanner. With invisible watermarks, such fraudulent actions are detected before they occur.

Dave Stack (02:59):
"If you can avoid that completely and they put that on the scale before they even have a chance to say they're bananas, it already rung it."

Expanding to Other Products:
Beyond salad bars, invisible watermarks are also applied to items like wings containers and Styrofoam clamshells, ensuring consistent security across various product categories.

Future Applications – Gift Cards:
Dave anticipates significant impact in preventing gift card fraud, a major issue especially during holiday seasons. By embedding watermarks into gift card packaging, any tampering renders the watermark unreadable, thereby preventing unauthorized use.

Dave Stack (25:20):
"Digimark is working to embed the watermark into that scratch off that it now is an integral part of the packaging. So if that card comes out and it gets tampered in any way or the alignment changes in any way, watermark's not readable."

6. Benefits and ROI: Reducing Shrinkage

The implementation of invisible watermarks has led to a notable 40% reduction in shrinkage associated with salad bars at Schnucks, according to Dave Stack. While sales remain steady, the decrease in product loss translates to substantial cost savings and improved profitability.

Dave Stack (16:15):
"With very little touch from a store team's viewpoint... shrink is going down."

The return on investment (ROI) is evident through the reduction in unauthorized losses, which often exceed the costs associated with implementing the watermark technology.

7. Integration with Other Technologies

Invisible watermarks seamlessly integrate with other retail technologies like Everseen's visual computer vision systems. This synergy not only detects theft but also prevents it by addressing fraudulent activities proactively.

Dave Stack (13:42):
"Combined with Everseen, it takes it out of the equation."

Additionally, future advancements may see integration with robotic systems, enhancing inventory accuracy and operational efficiency.

8. Challenges in Adoption

Despite its benefits, the invisible nature of the technology poses marketing challenges. Retailers find it difficult to promote a solution that isn’t visible to consumers. As Dave Stack points out, raising awareness remains a hurdle.

Dave Stack (19:26):
"It's invisible. I mean seriously can't see it. If you can't see it, how the heck do you market something you can't see?"

Overcoming this requires internal momentum and showcasing successful case studies to encourage broader adoption.

9. Future Opportunities and Potential

Looking ahead, Dave Stack envisions expanding the use of invisible watermarks to a wider array of products and integrating them with emerging technologies. Potential areas include:

• Packaged Meats: Enhancing security for perishable items.
• Robotics Integration: Improving robotic efficiency in inventory management.
• Automated Scanning Systems: Utilizing overhead scanners for seamless checkout experiences.

Dave Stack (21:24):
"If you're doing your own branded gift cards too... they're not too interested in that. They want the Nordstrom's, they want the Amazon cards in grocers."

10. How to Get Involved

For listeners interested in exploring invisible watermark technology further, Dave Stack provides contact information for professional inquiries and collaborations.

Dave Stack (28:08):
"They can connect with me on LinkedIn... the best way to get me is through email at DaveM@stuckmail.com."

To learn more about Digimarc and their invisible watermark solutions, listeners are encouraged to visit their website.

Dave Stack (28:24):
"Go through their website digimarc.com and Digimarc is with a C and not a K. So go through there and you can schedule a meeting with them through their website."

Conclusion

This episode of Omni Talk Retail offers an in-depth look into the innovative use of invisible watermarks in retail, highlighting their effectiveness in reducing shrinkage and preventing theft. Dave Stack's expertise underscores the practical benefits and future potential of this technology, making a compelling case for broader adoption across the retail sector.

Notable Quotes:

• Dave Stack (02:19):
  "You can call it an invisible barcode, but it is a manipulation of the product packaging at the pixel level to embed a unique sequence into that package that is completely undetectable."

• Chris Walton (03:19):
  "What is the use case that, that you have the most experience in and why we called you the foremost expert in the world?"

• Dave Stack (16:15):
  "With very little touch from a store team's viewpoint... shrink is going down."

• Dave Stack (25:20):
  "Digimark is working to embed the watermark into that scratch off that it now is an integral part of the packaging."

• Dave Stack (19:26):
  "It's invisible. I mean seriously can't see it. If you can't see it, how the heck do you market something you can't see?"

For more insights and updates on the latest retail innovations, stay tuned to Omni Talk Retail.