Blockchain should be on your radar – here’s why
If recent buzz about blockchain is making your head spin, rest assured you’re not alone. Most retailers and brands are still trying to figure out exactly what blockchain is, the impact it will have on the retail world, and how to approach it.
Bitcoin and cryptocurrencies dominate the mainstream attention on blockchain; if you’re not planning to accept bitcoin as a payment option, you might think that blockchain is not relevant to your business. Think again.
For retail, blockchain has the potential to change the very essence of how business is done by enabling unprecedented levels clarity, security and trust into every transaction.
Blockchain is poised to transform almost every major function within a retail organization – from accounting and finance to supply chain and inventory to data security and logistics, even marketing. It won’t happen overnight but, if you can figure out how to best leverage blockchain now, you’ll be one step ahead.
The Retail Implications
Blockchain is an unhackable technology (so far) that imbues trust and transparency into any complex transactional business processes. Retailers that embrace blockchain will be far more agile, far less vulnerable to fraud, and far more trusted by their customers. The productivity of supply chain and logistics programs can be dramatically improved. The same goes for marketing and other revenue-generating programs.
Why You Should Care About Blockchain: The REAL Retail Applications
With blockchain, profit-draining delays, mistakes, fraud, counterfeiting and the dependence on expensive third parties for accountability can be systematically eliminated. Even legal agreements can become self-policing. Customer-facing applications of blockchain such as product source authentication will earn you a much higher degree of customer trust in your brand.
- Faith in a product’s origin
The original source and the entire ownership chain of a product can be carried by a tag attached to it; this is especially important for grocery store customers and exotic imports such as diamonds.
- Faith in a product’s authenticity
Counterfeit goods can be effectively identified and kept out of the supply chain, which is of keen interest to luxury goods retailers.
- Trustworthiness of the brand
Consumer trust in your brand is your most potent competitive advantage. The security and transparency afforded by blockchain allow you to prove your trustworthiness at every point in the customer journey.
- Accountable and less expensive advertising
Digital ad networks are highly opaque to the point where advertisers really cannot trace where their money is going; it’s been estimated that only $.40 over every ad dollar actually goes to the impressions while the other $.60 goes into the pockets of the middlemen
- Streamlined and efficient sales of goods using digital currencies
There are no third-parties involved in the transactions (and collecting fees); just the buyer and seller within a blockchain-authenticated “digital safe space”
- Flexible and innovative loyalty programs
The easier it is to exchange loyalty points with partners for redemption of their products, services, and perks, the more value your points will have for your customers. The bigger the partner network, the more valuable your loyalty program becomes. Airlines and credit cards have been doing this for a long time, but their programs were very costly and time-consuming to set up. Blockchains will make this vastly easier to set up and less costly to manage.
Who’s Doing What With Blockchain in Retail?
- The easiest way for retailers to dip their toes into the blockchain world is the acceptance of cryptocurrencies such as bitcoin. However, a recent study shows that actual acceptance among retailers in North America is still close to negligible, with only 15% expecting adoption within the next three years and the rest taking a wait-and-see approach.
- Walmart is already using blockchain technology to track live food products through its supply chain,from the farm to the consumer
- French supermarket chain Carrefour is using blockchain technology to trackfree-range chickens, allowing consumers to get more information about where and how the chicken was reared, the name of the farmer, what it was fed and how it was slaughtered. The supermarket is expanding the use of blockchain to eight other product categories in 2018.
- Starbucks is launching a two-year pilot program with farmers in Colombia, Costa Rica and Rwanda to track coffee from “bean to cup,” sharing real-time information along the journey of its coffee beans.
The real action, however, is happening behind the scenes, as Amazon and large retailers the world over have teams examining the potential, assessing the challenges and envisioning their futures in a blockchain-powered world.
Tomorrow Starts Today
Blockchain will not be the first time a new technology has changed business forever, and it won’t be the last. Though it is still in its infancy from a retail perspective, the time to start planning is right now.
Stay tuned for our Spotlight Report on Blockchain for Retail. Until then, FitForCommerce’s Innovation Office can help you calibrate your thinking around blockchain and map a strategic plan of action.