Blockchain technology spreading throughout retail sector
Blockchain in retail’s market value will be 29 times higher in 2023 than 2018, rising from $80 million to more than $2.3 billion, according to analysis by FinTech entrepreneur, speaker and author Monica Eaton-Cardone based on a MarketsandMarkets report.
“Bitcoin has suffered high-profile hacks and wildly fluctuating prices in recent years, so wariness of cryptocurrency has led some to be leery of blockchain by association. But the technology is starting to spread throughout the retail industry now that early adopters are proving its real-world potential,” says Eaton-Cardone, who serves as CIO of Global Risk Technologies and COO of Chargebacks911.
She flags up five key areas:
Supply chain management - Walmart and IBM have partnered on a blockchain-based food traceability initiative that can identify the origin of produce almost instantaneously; instead of taking nearly a week, that data can now be retrieved in just 2.2 seconds. This is critical in cases of food-born illness outbreaks and safety recalls. It also enables retailers to demonstrate compliance with regulations aimed at eliminating slavery and human trafficking from supply chains and allows merchants to unequivocally assure customers that products are ethically and/or sustainably sourced.
Inventory management - Blockchain is making it easier for merchants to track the location of goods - from manufacturer to warehouse to backroom to check-out - and replenish inventory in enough time to avoid backorder and out-of-stock scenarios, which reportedly cost retailers worldwide nearly $1 trillion each year.
Authenticity verification - Counterfeiting and theft are ongoing problems for manufacturers and retailers, whether it’s knockoffs of high-end goods such as handbags, fragrances and watches or criminals trying to sell stolen art or automobiles to legitimate dealers. Blockchain trails can help manufacturers detect product diversion and trademark infringement, and they also enable resellers to verify ownership.
Auto-renewal and subscription services - In the case of goods and services sold via subscription/recurring billing, blockchain can help protect both sellers and consumers. Sellers can use it to prove they have obtained a customer’s consent to charge their card/account on a recurring basis and demonstrate compliance with relevant laws, while consumers can prove when they have requested cancellation.
Customer data and loyalty programmes - Blockchain allows retailers to save and use customer data for future orders and product recommendations without storing that data on their servers, where it could be susceptible to breaches or hacks. It can also be used to tokenize loyalty and reward programmes, which helps to attract customers by making it easier for them to track, redeem and/or trade points.
There are still areas that need to be addressed before the technology is fully implemented on a global, industry-wide basis, from the privacy of data stored on peer-to-peer networks to the need for a common platform to emerging legal and regulatory developments. However, it is encouraging to see big names like Walmart, Carrefour, De Beers, Amazon and American Express leading the way.
“Today’s retail applications are proving that blockchain definitely lives up to its hype,” says Eaton-Cardone. “Distributed ledger technology has moved from theoretical possibilities to practical uses, and the implementations we’re seeing now are just the tip of the iceberg in terms of what blockchain can do for retailers. I believe blockchain has the capacity to completely reshape the retail landscape within the next five years.”