Blockchain technology provides the opportunity to unlock value in multiple industries, and the retail industry is no exception.
Across the value chain from producers and delivery agents to warehouses, stores and consumers, blockchain enables the removal of multiple intermediaries due to increased trust levels, improves transparency, and increased efficiencies.
Examples of Opportunities:
Every activity and item hand-off in the supply chain process can be recorded accurately from source to consumer. Not by using blockchain in isolation, but by combining it with best practices and other enabling technologies such as IoT sensors, beacons, big data, AI and advanced analytics; it can enable the business to provide consumers with:
- transparency on where their products were sourced from,
- ensure that items were not tampered during transit,
- record environmental data during transit to ensure that optimal conditions were maintained, and
- protect against fake or sub-standard goods reaching the consumer.
The advent of Bitcoin introduced us to the new world of cryptocurrency. Many consumers own various cryptocurrencies and have started paying for services with it. More types of cryptocurrencies are emerging each day, from volatile coins such as Bitcoin & Ethereum, privacy coins such as Monero, ZCash and Dash, to stable coins such as Tether and MakerDai.
Payments by cryptocurrencies will allow for:
- faster and cheaper transactions and settlement times for businesses and consumers, than traditional means such as cash, check, EFT and card.
- fraud to be reduced (e.g. bounced checks, counterfeit notes, card skimming, dishonest reversals)
- unbiased 3rd parties can be connected to the value chain to arbitrate on disputes,
- lower payment processing fees
A number of blockchain projects are already focusing on Point of Sale integration to allow consumers to easily pay with their cryptocurrency holdings, in both online and offline connectivity modes.
Consumers are becoming more concerned with who has access to their personal data, and what it’s being used for. Businesses on the other hand are increasingly forced to comply with data protection and privacy laws which limit what they can use consumer data for. Identity Management platforms are being built on the blockchain that allows consumers to share exactly what they want, with 3rd parties that they choose. Many of these platforms work with government agencies or trusted 3rd parties to perform KYC on the consumers.
With Identity Management, businesses can offer consumers:
- lines of credit,
- loyalty programmes where consumers can be targeted with personalised offers,
- to offer consumers a consistent omni-channel experience, and
- for more efficient warranty handling processes and goods exchange.
Most large retail organisations are already using ERP (Enterprise Resource Planning) and POS (Point of Sale) solutions from some of the dozens of vendors with Retail ERP offerings. Many of these solutions provide modules that integrate functions such as merchandising, marketing, sales, inventory management, demand forecasting, finance, POS, shipping, payments, and customer & employee management. On multiple channels across business units, geographies and currencies.
However, these ERP solutions are generally siloed with limited connectivity to other organisations ERP solutions. I don’t see blockchain technologies replacing the ERP stack within the organisations.
Instead of replacing, blockchain technologies can be used to augment existing capabilities. It’s suited to inter and intra-organisation exchanges of value and information, where centralized intermediaries can be bypassed; with resulting improvement in business efficiency, scalability, security, availability and profitability in a trust-less environment.
Value can only be unlocked in the retail industry for businesses and consumers when combined with the right selection of technologies and business-led transformation efforts that make sense.
Blockchain Wave Headed Toward CPG and Retail Industries, Accenture, https://www.accenture.com/za-en/insight-highlights-cgs-blockchain-cpg-and-retail-industries
How Can Retailers Use Blockchain? New Deloitte Report Outlines 16 Use Cases, Sydney Lazarus,
Blockchain in Retail: Changing the Shopping Experience, Brad Anderson,
Blockchain in Retail, Reply, 2018, http://www.reply.com/en/content/retail
Advantages of ERP Systems for the Retail Sector, SGS Technologies, https://www.sgstechnologies.net/blog/advantages-erp-systems-retail-sector