Future of Retail – Where Does Transformative Blockchain Fit In?
Merely two days back, we heard the news of two of the biggest global shipping and tech giants – Maersk and IBM paired up to bring alive the concept of Transformative Blockchain Technology in the world of shipping. The Danish behemoth has reportedly teamed up with Silicon Valley giant IBM for the new initiative which will transform the supply chain and logistics – cross-border and globally! The two will be collaborating with a network of forwarders, freight shippers, customs and ports authorities, and ocean carriers to establish a trade digitization solution globally.
The Hyperledger Fabric – based Blockchain solution will be constructed by these two giants and will be offer to shipping and logistics sector. The solution will play a crucial role in the tracking and management of paper trails of millions of such shipping containers around the world. It will digitize the entire process of supply chain from end-to-end in a sequence, enhance the transparency, and secure the information shared among the trading partners. Once adopted at a massive scale, the transformative Blockchain technology has the potential to save logistics industry’s billions of dollars.
Gartner referred the Blockchain as “a type of distributed ledger in which value exchange transactions (in bitcoin or other token) are sequentially grouped into blocks.” These blocks can be viewed but cannot be modified, which gives way to a benefit that lies in the provided transparency and trust. Blockchain has been around for more than 8 years now and has facilitated in storytelling in addition to serving as a tool in marketing and branding, for e.g. the Shanghai Fashion week brand Babyghost.
Following are some ways in which the Blockchain technology can have a possible impact on the future of retail market.
Digging A Little Deeper Onto The Impact
The first impact will enable the retailers to supply much more reliable information to those customers whose purchase decisions are based on the content, purity, origin and authenticity of the product. The customers will be able to have an assured & unquestionable proof of the product’s origin at each step throughout the supply chain and fight the counterfeiting whip.
Providing the customers with the proofs of the origin and authenticity of the product along with the accurate list of the ingredients will be a certain result of the Blockchain technology. This will be achieved through a series of steps starting with the recording of product’s information in a particular blockchain. This blockchain will be persistent throughout the supply chain. This information, sometimes include the sensor readouts and soil reports, which will eventually help gain trust of the customers and raise product margins. The same goes with the other type of consumers like for electronics, clothing and others.
Safe and Secure Transactions; Settlement at a faster rate:
If transactions will be Blockchain-based, then there will be a lesser need for the third parties. This will speed up the process of settlement by reducing the fees retailers. Thus, lesser time and cost will be needed to complete the whole transaction, ensuring the integrity.
There will also be a reduced risk of any fraud as the usage of blockchain will result in a reduced need of in-house accountants, lawyers and independent auditors for identifying the fraud.
The blockchain technology will also help in maintaining efficient relationships in business through smart contracts that are self-executing. The cost and need for third parties like agents and brokers would be reduced as the blockchain will be able to automatically find the best terms and prices for the products as well as complete the purchase without having any human interference. The increased efficiency of business relationships, reduced no. of frauds and safe transactions would finally result in the significant utilization of the resources in more valuable ways.
Visible Supply Chain:
The blockchain chain technology will definitely provide a clear visibility into the composite supply chains like the data on the status and location of the product. The digital information can be consolidated into a blockchain-based truth version, thereby improving the tracking and forecasting capabilities of the Retailers, Shippers and Suppliers.
Enabling smart contracts will make things automatic while providing extraordinary efficiency along with ample of cost reductions across the whole supply chain. The processes will be streamlined as the data integrity and capability of being resistive to the frauds will be improved.
A food retailer will actually benefit from Blockchain by recalling only the contaminated parts, avoiding lawsuits, reducing the number of investigations and keeping responsibility throughout the chain.
The blockchain technology will also enable the user to have a user access control for ensuring protection against the proprietary information by restricting the “view” or “modify” permission to some concerned authorities.
Consumer Loyalty Programs:
A lot of companies nowadays are increasing the number of their loyalty programs in order to cover different-different brands. For instance, some airlines offer the passengers a chance to earn reward points, in case they rent a car from the suggested vendor and sometimes grocery chain consumers get special discounts on the affiliated gasoline stations.
This usage of points at multiple merchants decreases the originating retailer’s accountability. This leads to a considerable increment in the business of retail partners and gains more consumer satisfaction through the loyalty programs. However, these transactions of points face certain delays on the merchant and consumer’s side and the customers are forced to wait up for these points to reflect into their account. This problem would be resolved by the Blockchain technology as tracking of the points will get cheaper, faster and much more secure along with their improved visibility.
Gradually, the impact will be the establishment of a fully customer-controlled program which would enable the customers to buy and sell their points much easily as compared to before. This will further lead to improved customer satisfaction along with strengthening the bond among the merchants by providing them with a real-time view of the customers’ combined buying activity.