Ideally, one would place blockchain alongside machine learning and IoT as a technology that would open new doors for humanity. However, due to the polarizing reputation of the cryptocurrencies, blockchain nowadays isn’t subject to as much discussion in the tech circles as it truly deserves.
But that doesn’t take away from the fact that this technology has some revolutionary implications. Retailers, in particular, have found solutions for loyalty programs, warranty procedure and customer data management through blockchain.
Here’s a short summary of what blockchain promises to the retailers in the customer service department.
1. Customer Loyalty Programs
Pareto principle or the 80-20 rule has long been applied by marketers where they believe 80% of your sales come from 20% of the customers. Study after study has validated this belief and this is why retailers invest heavily in creating loyal customers.
Retailers strive to build a long-lasting relationship with the buyers be it through coupon marketing or creating a rewarding system where customers accumulate points that are tradable for store items. But the infrastructure built to support these programs is often exposed which leads to loyalty-fraud crimes. This results in both personal data and value being lost. Similarly, some value programs fail to inspire loyalty as the ways to spend points in them are extremely limited.
Here’s how blockchain can help solve both of these problems. Fraudsters struggle to infiltrate a system that is an interplay of decentralization, cryptography and consensus. Compare this to hacking a centralized database and the difference is night and day. On the customer value side, users receive loyalty tokens that can be operated across multiple programs. Customers also get to spend these tokens in diverse ways.
Already, Qiblee “ a Swiss firm is helping businesses run their own branded blockchain-enabled loyalty programs and assisting merchants with rollout and setup.
2. Warranty Procedure
It’s estimated that 3% to 15% of a company’s average warranty cost is made up of fraudulent warranty. This encompasses fraudulent claims and counterfeit products. Meanwhile, how a business goes about the status of coverage has a significant impact on its bottom line.
Once again, blockchain comes to the rescue of retailers hounded by faux warranty claims. Since the public ledger based on blockchain is accessible at multiple points, retailers can validate the claim and status at any point during the warranty management process and make quick decisions. With this, they could trace the manufacturer and help them start the repair and replacement process.With data available at every interval, verifying the claims becomes much easier. Since the complete lifecycle of the product is available through a trusted ledger, it’s viable to determine the place and time of manufacture, note when the product transited through the warehouse to the retail store and see when it was finally sold. This way, any counterfeits would be easily detectable.
One key thing with consumer goods is that with blockchain, you can add a layer of authenticity that was before impossible. Says, Travis Wright “ the author of Digital Sense and host of The Bad Crypto Podcast. With so many fake goods from Asia coming into our country, how do you know that Gucci bag is legit? With it being on the blockchain, you’ll know it’s legit. He says.
Blockchain makes warranty management efficient, simple and more resistant to fraud. This causes the administrative and processing cost to go down significantly. As a result, you have satisfied customers and a healthy income statement.
3. Customer Data Management
Retailers have a treasure trove of customer data. The application of blockchain here provides multiple opportunities for streamlining this entire process. Some of the advantages of the distributed ledger could mean customers having more control over their data, better security and retailers meeting customers‘ demands to provide them with superior value.
Marketing innovations powered by blockchain could mean precise marketing through an automated recommendation system. This would help retailers identify customers‘ demands with unparalleled efficiency. Likewise, customers can receive tokens that are spendable at the store as advertisement expenditure becomes highly optimized.
Although this technology is yet to be applied in a practical sense, blockchain could create a data-sharing system where retailers are proactively informed about customers needs through shopping lists. From there, IoT could execute and deliver those lists to machines, creating a whole infrastructure where the entire process becomes automated.
Conclusion
Retail stores have shown great resilience in the age of eCommerce. Most of this has to do with customers who prefer in-store shopping rather than ordering online. But brick and mortar businesses cannot afford to get complacent. What they should do instead is integrate technology such as blockchain to create a supreme customer experience.
This means applying blockchain solutions to every aspect of the business. By using this technology to upgrade loyalty programs, warranty procedures and customer data management “retailers can reshape every step of the shopping process.
