How blockchain will transform the retail industry
We are living in times of unparalleled digital innovation that is fundamentally changing the way we do business. Blockchain, in particular, is an emerging technology that is quickly gaining a foothold in the corporate world as senior management is realizing the implications it could have on day-to-day business.
The application of blockchain solutions in business operations
Today, the potential application of blockchain technology spans across all industries and sectors. From healthcare to telecommunications to sports- every industry is transforming with the intelligent application of blockchain solutions.
While blockchain maintains a vast array of benefits for many industries, its application in the retail sector is undeniably a step above the rest. As a retailer, utilizing blockchain technology will become an industry standard due to its effectiveness in driving crucial organizational changes.
Advantages of blockchain in the retail industry
1. Optimized supply chain operations
Supply chain operations are the backbone of the entire retail industry. For retailers to succeed in scaling their business, they must drive consistent improvements in their supply chain system. The equation is actually quite simple; the more optimized your supply chain and inventory management operations are, the greater your likelihood of success in retail will be.
Venture capital firms across the globe have been investing in cutting-edge supply chain tech at a record pace in order to accelerate retail advancement. More specifically, VCs are now focused on blockchain technologies that enable supply chains to operate at maximum efficiency.
The market for blockchain technologies in the supply chain sector is expected to grow at an astonishing CAGR of 80 percent by 2025, as per Allied Market Research. Consequently, the blockchain-enabled supply chain solutions market is predicted to reach USD 3153.7 million by 2028.
This explains why retailers are tentatively looking for blockchain technology to optimize their supply chain. But what are actually the benefits of blockchain technologies in this space?
To explain, the primary benefit of blockchain in supply chain operations is exceptional traceability. With blockchain, you can track anything in real-time through all stages in the supply chain and subsequently store all the information on a decentralized ledger that is unchangeable.
In addition to improved traceability for managing supply chain issues, blockchain also promotes complete transparency. Subject to this transparency, you will be much less vulnerable to fraudulent purchases as a retailer and consumer.
Blockchain technologies can also advance automation in supply chain operations by logging product activities for minimal inaccuracies in the system. Further, blockchain also enhances the overall security of the supply chain due to its decentralized nature, thereby eliminating any single point of failure.
2. Advanced payments
The hottest new trend in the business world seems to be companies increasingly accepting blockchain crypto payments. In particular, some of the top retail companies accepting cryptocurrencies include Home Depot, Starbucks, Microsoft, and Amazon.
However, the benefits of introducing blockchain in retail payments are not limited to offering consumers an alternative in terms of payment. Rather, the concept of secure, fast, and cheaper payments is the key factor driving rapid adoption.
Blockchain technologies offer better security than credit cards and other forms of centralized internet payments. Due to the blockchain being decentralized, it is significantly harder for bad actors to submit false transactions or hack a central database. In addition, absolutely no one can access your funds besides yourself, providing another layer of security
Furthermore, blockchain can enable businesses to reap incredible benefits such as faster settlement of payments. Not to mention, the common payment providers in retail charge exorbitant transaction fees from retailers, hence reducing profits. With blockchain, fees on certain networks are next to nothing, therefore increasing profits.
Evidently, blockchain offers a more transparent payments system with enhanced security, cost efficiency, and speed. As a retailer, you make numerous transactions on a daily basis- it only makes sense for blockchain to eventually become the nucleus of your payments system.
3. Instant resolution of vendor disputes
Vendor disputes are all too common in retail businesses. This age-old problem can be highly time-consuming and generally results in heavy losses for the retailers.
Evidently, averting these issues for a business becomes a top priority. However, even if they occur, you’d certainly want them to be resolved in real-time such that you don’t have to bear any losses during the downtime.
Given the increased traceability feature of blockchain, businesses can easily resolve most vendor disputes. This is because all of the information regarding the issue will be readily available to access. Therefore, businesses save significant time in the case of conflicts with vendors, and the problems can be resolved with undisputable information. In this way, trade losses that may directly impact your business are effectively averted.
4. Enhanced counterfeit detection
Retailers are often burdened with the onus of ensuring that their customers do not receive counterfeit goods. Unfortunately, as technology has rapidly evolved in the modern world, the market for counterfeit products is also expanding.
If you lose the trust of your customers due to counterfeit products, it is near impossible to retain them. Hence, it has become a priority for businesses to make sure customers receive only authentic products.
However, with so many orders and transactions involved, exposing counterfeit products is quite a tall task. Luckily, thanks to blockchain technologies, businesses can now ensure product originality in a more effective and seamless manner.
To explain, when you record the entire supply chain with the integration of blockchain, you can swiftly verify the originality of the products with greater precision.
Businesses can persistently ensure the authenticity of their products at all times. Further, if any gaps in the supply chain hint at the possibility of counterfeit products, it can send out an alert in real-time.
5. Improved predictive maintenance
The retail industry is directly correlated with fleet management and operations with sophisticated machinery. Therefore, any delays in the fleet or machinery can result in delayed shipments. This is where the significance of intelligent predictive maintenance becomes apparent.
The predictive maintenance method aims to monitor the state of the machinery, equipment, and fleet to anticipate the requirement of maintenance works. As a retailer, predictive maintenance can vastly improve your operations by resolving maintenance issues even before they arise.
Blockchain technologies can play a pivotal role in predictive maintenance. For example, it can store information on the condition of vehicles in the fleet and the equipment used in retail. Blockchain could then effectively coordinate the full maintenance history of the vehicles and equipment. Utilizing this data, you can track the history of the maintenance performed and plan further repairs to prevent breakdowns.
Without question, using blockchain predictive maintenance can greatly increase your uptime concerning your fleet and machinery
6. Self-sufficient marketing
As a retailer, innovative marketing is one of the best ways to acquire new customers, especially in a highly competitive environment where you must fight to differentiate yourself.
An ongoing problem in marketing is to design targeted campaigns that directly engage your specific audience. Of course, the greater the personalization, the more likely it is your campaign will drive results. But what does blockchain have to do with marketing?
The first benefit of blockchain technology in marketing is that you no longer need to rely on any third-party marketing platforms when you have precise data on marketing performance metrics.
To explain, when you have precise data concerning clicks, impressions, average engagement rate, and other key digital marketing metrics recorded on the blockchain, businesses can drive greater self-sufficiency in marketing operations.
Utilizing accurate data on the key performance indicators of digital marketing can design more effective advertising campaigns which will drive more traffic. Understanding the meaning and impact of key metrics will help you cultivate higher-quality personalization in your marketing campaigns. As most marketing veterans know, personalization is indeed the most powerful marketing tool in the contemporary business world.
Moreover, when you are handling significant amounts of customer data to enhance personalization in other marketing campaigns, the security of this data becomes crucial. People have legitimate data concerns, especially after the data scandal involving Facebook and Cambridge Analytica.
Using the blockchain, you can store customer data in an encrypted and decentralized fashion. This will inspire greater confidence among your customers and strengthen your brand.
Overall, blockchain in marketing means optimized targeted adverts, greater transparency in marketing campaigns, and more intimate customer relationships.
7. Automation of repetitive tasks
The retail industry involves a wide array of repetitive back-office administrative tasks. If they were effectively automated, you would improve turnaround time and decrease costs. However, effective automation is no easy task.
Blockchain technologies can efficiently automate repetitive tasks such as record maintenance or payroll administration utilizing smart contracts. Hence, it can help your company focus on other tasks that require greater human creativity.
Closing Thoughts
To summarize, blockchain technologies may very well become the new backbone of the retail sector. The advantages are no longer limited to just finances but extend to supply chain, marketing, vendor disputes etc. While the technology may not be mature enough today, expect blockchain to become mainstream in the retail industry over the next 5–10 years.
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