While Blockchain is a relatively new technology, it is still affecting the retail industry quite significantly. Blockchain is throwing a spanner in the works for product authentication, online marketplaces, and a lot of other areas.
Because Blockchain was designed to decrease the cost of transactions, while improving their overall security, the area of e-commerce has considered the use of Blockchain to be disruptive. Even Amazon, Walmart, and Alibaba are experimenting with Blockchain – it isn’t only for startups! In recent history, Alibaba have actually even gone as far as to file a patent for a new payment system that implements Blockchain technology, and was designed in March of 2020.
In considering some of the more familiar systems that people generally use, like Amazon and eBay though, it is definitely worth noting that there are a lot of new start-ups to the online marketplace network, such as OpenBazaar, eziMoon, and the Piptle Store, which allow buyers and sellers to negotiate and carry out transactions using various cryptocurrencies.
Blockchain demonstrates significant areas which can be improved on – one of which, is traceability. Traceability in global trades can provide tracking contact details, and ensure proof of delivery in a way that is secure and mitigates against the potential risks involved, such as data being manipulated.
To provide an example of this, Home Depot, in working with IBM in managing relationships with suppliers over the Blockchain could provide a shared record, which is time-stamped and keeps a record of the flow of goods throughout the shipping, and delivery process. This has been noted to minimise vendor disputes and the time needed to resolve them.
In some instances, companies have collaborated with major companies like Microsoft and Blockchain start-ups, like ConsenSys, to create their own platforms. LVMH Moet Hennessy Louis Vuitton created their platform AURA to use Blockchain technology to authenticate their luxury goods, and allow customers to trace their products from the design process, to the distribution process, providing protection against counterfeit goods and securing brand recognition.
Loyalty Programs and Gift Cards
Another benefit to Blockchain is that it can improve the area of loyalty programs and gift cards for the retail industry. Blockchain technology allows systems to be managed securely, in a cheaper, and more effective method – disregarding the need for more middlemen to be involved in the issuing of cards, and in sales transactions. Blockchain-based gift cards are demonstrably more cost-effective, and more efficient, and allow users of the technology to verify the cards, which helps to prevent improper, or illegitimate use of loyalty programs and gift cards.
How does Blockchain Work?
In considering these areas that Blockchain improves on, it is important to understand how it can be used to rectify supply chain issues in a practical sense.
Whether it’s purchasing luxury goods, or grocery shopping – customers want to make sure that their purchases are legitimate. The luxury goods industry in particular is one which has been consistently plagued by cheap knock-offs being sold as originals. Due to this, it is important to make sure that you can ensure the authenticity of a purchase before spending all of your money, and so it is important to have a system which is reliable for doing so.
Blockchain allows companies and their suppliers to register any luxury goods on the Blockchain directly from its point of origin – for example, a wool supplier registering on the block that they have sold wool to a company.
In this process, a customer can search for a product that they would like to purchase and check over the details of the materials involved, including:
Following the purchase process, these details could be recorded on the Blockchain, as could the customer’s details, provided a membership card, or loyalty program was registered. This would help companies to maintain a higher level of quality, within their database – in real-time!
As noted from the example, Blockchain would be able to provide the example company with the ability to check on:
Companies like Walmart are already implementing measures like this, in order to promote transparency and traceability. IBM helped Walmart to provide customers with the ability to track food in the supply chain, allowing them to pinpoint exactly where the food was from – even down to the specific farms it came from! In doing this, they allowed stakeholders in the supply chain to be able to keep informed of the health of crops, meaning that diseases could be mitigated against through a faster system for detection!
Blockchain is revolutionising how everyone, from individuals, to small start-up companies, right through to big businesses and corporations interact every day. These advancements are disrupting the world of retail, through their technological potential, allowing for major changes in the industry. The possibilities are endless, we here at Pipezi can’t wait to see what happens next!