5 Key Blockchain Applications in the Retail Industry
The today’s retail market is as competitive as it has never been before. The number of shops, shopping centers, e-shops is continuously growing, each using various marketing channels and innovative technologies to attract buyers.
Under the impact of digital transformation, the retail domain is rapidly changing. Retailers are starting to adopt such tech solutions as mobile apps, loyalty programs, beacons, chatbots, Big Data Analytics, machine learning, IoT, and even robots.
So, the customer is overwhelmed with retailers’ offers and information, which makes him more demanding. Transparency, customer loyalty, and credibility are becoming top priorities, which requires the use of new tools. To get success, retailers have to provide safe transactions, keep secure data record, and ensure the authenticity of their goods.
Blockchain, that is being widely integrated by banking and financial organizations, also has great prospects in the retail sector. In this post, we’ll speak about blockchain applications in the retail industry.
Blockchain applications in retail
- Authenticity confirmation
Product authenticity is essential for retail companies. When there is an authenticity confirmation, customers don’t worry. Their trust and credibility are created. Blockchain solutions are irreplaceable for this case. Areas like luxury retail, jewelry industry, healthcare and pharmaceuticals, and other that deliver expensive goods, are those that benefit from using them the most.
How it can work: tags are placed on the retailer’s goods and products and then are recorded in the distributed ledger system. The information about them is available on the network.
This way, both customers and shop (website) visitors can check their authenticity and even track it back to the original source. It’s also important for retail companies when accepting the goods.
After a purchase is made, a customer is registered as an official owner. As all the data is kept on the blockchain. As each product has a tag, there is no possibility for anyone to resell it without permission. So, you achieve a high protection against fraud and thus increase user credibility.
- Fair trade practices
Both consumers and businesses take care of following fair trade practices. When making purchases, they do need to know that the retailers’ claims about the quality of their goods/products are true. Due to blockchain solutions, all the detail are recorded and can be connected to the good. The result is counterfeit minimization.
- Supply chain management
Blockchain solutions can be used to provide transparent and secure supply chains. During the transportation process, the goods pass a long way and plenty of intermediary stages. They can be lost or damaged. Also, there is always the risk of theft.
So, it’s important to ensure supply chain visibility to make it possible to track all the process back – from the product origin to the moment it reaches the store or the customer. With the blockchain technology, you will enable supply chain traceability.
You’ll be able to track supply chains with each piece of data recorded on the distributed ledger system. It may involve the amount and characteristics of goods, date and time of receiving and unloading of cargo, the sides involved (manufacturers, suppliers, retailers, shippers), and more. You can also increase data security by providing each product with a digital ID.
- Keeping records
Reduced paperwork is another advantage that blockchain solutions offer retailers. As we’ve mentioned above, the transportation process can consist of many intermediary steps – up to 100-200. It can involve multiple parties with each interaction required to be recorded. And sometimes their number can be over 150!
The result is a lot of paperwork and risks of human errors, document losses, and inaccuracies. Customs declarations, transaction data, cross-border shipping cases, information about receiving and unloading of cargo, etc. can be moved to the distributed ledger system.
- Cryptocurrency payments
Generally every member of the retail world – a manufacturer, shipper, retail company, or a consumer – has to apply to a third party to validate a transaction and pay for this. There can be delays in payment confirmations and monetary losses as a result.
The use of blockchain technology can reduce (potentially – even remove) the necessity in manual transactions’ validation, minimize costs, and ensure security. Each transaction is uploaded to the distributed ledger system, recorded, and verified.
Once it is on the network, it can’t be changed or deleted. It’s impossible to fake a transaction or to use the payment or personal data for fraud. Though few retailers are using cryptocurrency transactions, they provide their customers with the opportunity.
Hope, you’ve found interesting blockchain applications in retail. If you have some questions about the technology or a project idea, you’re welcome to apply to us and receive a consultation for free. Having been delivering many blockchain solutions, we’ll be glad to help you with yours!