Now the retail sector is seeing a rapid transformation. Such technologies as IoT and Big Data have already started penetrating the industry. Coupled with mobile apps and machine learning, they enable retailers to take a deep look at customer needs and preferences. By using technological innovations, retailers can get various advantages and opportunities, for example, the collection of customer data, audience segmentation, improved marketing campaigns based on customer analysis, and much more.
However, it’s not the end of retailers’ challenges. Today customers are especially concerned about fair trade practices, the truth about the claims that retailer companies make about their goods, as well as receiving high-quality services. Empowered by social media, the new age retailer’s customer is more informed, demanding, and conscious. Trust, security, and transparency are becoming critical for success, requiring the adoption of new business models.
Blockchain technology, that is going to revolutionize the financial industry, has a great potential to transform the retail domain too. Representing an immutable digital data record and ensuring safe transactions and data exchanges, it can help retailers take a competitive advantage.
1. Authenticity confirmation & counterfeit minimization
It’s common for customers to worry about the quality and authenticity of goods and products they are buying. No wonder that the creation of customer trust is one of the top priorities in the largest consumer companies in the world. Blockchain can successfully be used to ensure product authenticity, which is especially important for spheres like luxury retail, electronics, and pharmaceuticals.
By placing tags on goods and recording them in blockchain database, retail companies enable customers to check out the authenticity of goods at any moment. Customers, in turn, are registered as their official owners. Any new transaction is also recorded in the ledger and if the product is attempted to be resold, the customer will be automatically notified.
The integration of such model will allow to successfully protect both companies and clients from fraud and counterfeit. The ability to verify product authenticity and track it back to its source gives customers the confidence in their investments.
2. Retail supply chains
Supply chain management takes an important part in the retail industry. By integrating blockchain technology into the supply chain, retailers achieve a high level of transparency, security, and visibility.
The placement of RFID tags and sensors will enable to collect data about temperature and humidity of products, the location of trucks, stages of the delivery process, and a lot more. The data is recorded and saved in the distributed ledger, every product is given a digital ID that secures all information about it along the product life-cycle.
This way, it becomes possible to trace the entire way that goods pass from their origin to the retail store, including suppliers, manufacturers, and shippers. The network maintains an immutable and inconvertible data record allowing consensus among trustless parties about the existence and status of supply chain information stored on the ledger.
Considering practical examples, Chronicled applies the technology to successfully track physical assets throughout supply chains. The use of Ethereum smart contracts and Artificial Intelligence allows the company to not only monitor goods, but also manage payments, transactions, delivery schedules, track data records, and much more.
3. Digital currencies
Virtual currency is one of the oldest and most promising applications in the retail sector. Though many companies still don’t use digital currencies, they have prospects to become widely introduced in financial operations in the near future.
Wishing to take a competitive advantage, some retailers started integrating digital currencies long time ago. For instance, in 2014, Overstock.com became the first major retailer to accept Bitcoin as a payment method.
As now we are seeing the digitization of everything, first of all, payments, retailers must keep up with the times and be aware of the ways consumers want to pay. Being based on cryptographic algorithms, blockchain adds trust and security to financial operations.
Blockchain technology prevents data distortion and ensures safe transactions, making the creation of fraudulent entries on the ledger almost impossible. As a rule, every participant in the retail supply chain pays a third party to validate transactions. Payments can be delayed as they are confirmed, which may lead to monetary losses.
By moving all transactions to the blockchain will remove the need for manual validation and provide the transparency of exchanges, while also minimizing costs. With every transaction confirmed and saved on the ledger, retail companies will manage to reduce fraud.
4. Marketing campaigns
Every retailer understands that personalized experience is the main thing that customers want and need. When knowing customer preferences, retail companies can send targeted messages in their advertising campaigns that engage consumers and motivate them to make purchases.
For the past several years, retailers have integrated such technological solutions as beacons and sensors to collect unprecedented amounts of customer information about their in-store behavior in real-time, take a deep insight into customer analytics, improve inventory management, and create successful marketing campaigns.
Beacons are small Bluetooth-enabled devices, that can automatically send push notifications directly to shoppers’ smartphones once they enter the coverage area, i.e, near a certain shop.
Beacons allow retailers to know their target audience and use internal data for some peripheral customer insights, says Abhi Pitti, CEO of Nucleus Vision, a company that uses blockchain technology together with the Internet of Things to build real-time customer intelligence for brick-and-mortar stores.
When we merge in the blockchain, all private databases such as banks, third-party apps on a mobile device, and credit card companies can open customer databases to share and monetize data with required customer authorizations recorded on a secured, incorruptible, transparent, chronological, distributed ledger .
Final words
Blockchain technology has the potential to transform and innovate the retail industry in the coming years. The integration of blockchain solutions will enable retail companies to ensure safe transactions, improve supply chain management, reduce fraud, provide inconvertible data record, and dramatically increase customer trust and credibility.
