Wednesday Deep Dive: Revolutionizing Retail with Blockchain
As the practical applications of blockchain gain traction in the real world, it’s worth exploring just how impactful this new technology can be in different industries. How can blockchain solutions in one industry be applied to other industries? How can we leverage novel approaches, tools, and applications that have been successfully deployed in specific settings to other areas of interest?
This week, we’ll take a look at how blockchain technologies can be applied to the retail industry. Thanks to blockchain’s ability to track data, trace items, authenticate users and codes, record contracts, and guarantee indelible, permanent recording of transactions and exchange means it can be used in a variety of ways across the entire production chain, with a wide range of benefits enjoyed by different players all across the value chain. Additionally, consumers can enjoy lower costs and higher savings, producers can enjoy increased trust and transparency, and society as a whole can enjoy safer, more reliable, and higher-quality products.
How and where can blockchain be used?
As impactful as it can be, it is important to understand that blockchain solutions cannot – and should not – be simply applied as a band-aid to inefficient or broken business practices. We must first first understand how and where blockchain can generate commercial value and to then understand how and where to implement blockchain as an integral part of business strategy.
With this in mind, these are the general areas we see blockchain to most meaningfully impact retail over the years to come:
- Product tracking – Blockchain can provide detailed, end-to-end transparency with respect to the source or origins for food, ingredients, and products, thereby allowing buyers to track their purchases from the very beginning of the supply chain all the way to the end, covering everything from source material procurement practices to final delivery or purchase of finished goods.
- Fraud prevention – Blockchain can prevent fake or sub-par goods from reaching the market. One example is this footwear manufacturer who is using blockchain and embedding smart tags in their products to allow customers to scan these smart tags with their smartphones to verify whether or not the sneakers are genuine. In a similar fashion, De Beers aims to launch an industry-wide blockchain to track gems whenever they change hands in the market.
- Management of loyalty programs – Blockchain-based digital wallets can be used to centrally manage loyalty programs, reward cards, and paper and digital coupons. These solutions can even be used to help make loyalty points more easily transferable between consumers, across retailers, brands and stores, and across products or services of specific types.
- Consumer data and privacy – Retailers can use blockchain to manage digital IDs of their consumers. Blockchain promises to be an interesting way of helping retailers manage consumer data with issues such as automatic compliance, permissions management, and the management of access to consumer data that may be private or highly sensitive.
- Cryptocurrencies – Because blockchain can leverage powerful cryptocurrency solutions to manage the transfer and/or exchange of value or data, real savings and benefits are to be had in the form of better cross-border payments solutions, micro-payments, and comprehensive accounting solutions that are cheaper and quicker than existing best-in-class solutions.
- Smart contracts – Smart contracts can help ease the hassles of collection and enforcement that exist under traditional transaction structures. Such contracts can be used, for example, for instant collections and payments, automated refunds, automated settlement payouts, and more.
Where can we see some of these solutions in action?
To get a better sense of where things are and where they are headed, here are a few examples of blockchain and cryptocurrency projects that are making waves in the retail industry.
According to this report, Walmart stores plan to use blockchain for vendor payments and digital shopping. American Express is launching a blockchain project to customize rewards for cardholders, according to this report. Starbucks is even getting in on blockchain with a blockchain project that aims to create transparency by tracing coffee beans from primary sources, according to this report, and JD.com has launched an accelerator for the development of AI and blockchain technologies, according to this press release.
On the crypto side of things, Amazon registered three domains related to blockchain and cryptocurrency, according to this report, and there are already many different process and product-related blockchain projects that are already live across the globe that aim to deliver benefits to consumer, producer, and supplier groups, not just in retail but across many different industries. Examples include Shping, which combines e-commerce with retail shopping to create a brand new user experience via a smartphone app that can be used to scan product barcodes, and Provenance, which documents the supply chain of materials, ingredients, and products to provide customers with transparency about the authenticity and origin of products they purchase.
On the business side, projects such as Aragon promise to deliver highly integrated business tools and processes that run on the blockchain, and once complementary solutions such as Aragon and Provenance and payments solutions such as decentralized payments cards and crypto-to-fiat conversions are integrated with each other, the world may well be on its way to moving from simple digital trade to global crypto trade.