5 Ways Blockchain Will Strengthen Your Retail Bricks
Building a stronger, smarter supply chain
Rome wasn't built in a day. But what if it could've been built in a few weeks?
The supply chain can and should directly reflect the brand-consumer relationship. Each party should have full visibility so that everyone has a razor-sharp understanding of product origin, safety, and delivery. Blockchain offers the glue to make that happen.
What is blockchain? In short, it’s a transparent, shared record of data. All users can access the data, but no one can change or delete it. There is no one owner, so everyone can see each action or transaction as it happens, and everyone is held accountable.
Here are 5 places where the technology is primed to bring greater efficiency AND accountability to sourcing.
The supply side: fulfillment speed
For retailers, inventory is set to be completely transformed. Blockchain will make supply:
1. Truly responsive
By offering a crystal-clear picture of product journey at every point in the chain, blockchain will likely enable retailers to rev up speed and scale while doing away with faulty transactions and driving improving inventory control.
Paulo Carvao, GM, IBM US Retail, CPG, Travel and Transportation Markets, knows that “the supply chain is where the rubber hits the road for today's increased consumer expectations.” He projects that “retailers are going to reach the point where they’re processing transaction logs minute by minute, acting in real-time and delivering on the promise of ‘I want to buy where I want, how I want, when I want.’”
Joined with the real-time monitoring and predictive capabilities of the Internet of Things (IoT) and AI, the aim isn’t just real-time analytics. It’s ahead-of-time analytics: anticipating demand before it arrives.
2. More cost-effective
Carvao acknowledges that “everybody’s constrained in terms of moving capital. How do we drive efficiency and release capital to reinvest and transform the business?”
Research suggests that blockchain could spur $164 billion in retail efficiencies by 2030, thanks to automated fulfillment, fewer human errors (and time delays), and fewer “hidden” costs linked to unnecessary steps in a transaction.
The demand side: safety and security
Blockchain can strengthen customer trust in the brand by bringing them closer to the source of the product. Customers can expect:
3. Next-level product safety
As a coffee roaster, what would it mean if you could trace the beans back to the farm? You would know how much money changed hands at purchase and every place the beans have traveled. You would have a closer relationship with the grower, and they with you.
IBM’s Food Trust ensures that this kind of tracking takes place so that producers, suppliers, manufacturers, distributors, and retailers have a permissioned, permanent and shared record of food system data. They can act immediately when a damaged product enters the system.
IBM is also exploring technology that will allow grocers to detect potential contaminants or pathogens with the use of AI sensors, quickly securing data that can be instantly entered into the blockchain.
4. Airtight safety for customer data
Two-factor authentication is nothing new. However, when you include decentralized storage, there’s never a single point of entry, so the risk of a breach is drastically reduced. As brands migrate data over from one centralized point of storage, they’ll can control specifically which data sets they want to share and where. Not to mention, customers will have a much larger hand in determining what data they’re willing to turn over.
Carvao asserts that “if you think about data as the fuel into this engine, you have to collect the data, organize the data, analyze the data, and trust the data, but most importantly you need to infuse this data and the AI into business processes. That’s the next frontier of productivity in the system.”
5. Cashier-less stores and heightened experience
In the name of speed, many brands have experimented with the cashier-less store, with mixed results. Walmart, for one, recently ditched their scan-and-go program at checkout due to in-store theft. The takeaway here is that automation at point of sale can’t just focus on ease—it also hinges on trust and accountability.
If customers receive a prompt to log into a store’s ecosystem upon entry, they could quickly select an item off the shelf and checkout. The retailer shows trust in them as a vetted customer, and can also trace the sale (and the item) through a transparent, fully reliable blockchain.
Blockchain can do a lot more here than smooth out the kinks in transactions. Kurt Wedgwood, IBM North America Blockchain Lead, points to the potential of blockchain-powered loyalty programs, in which brands can “let customers exchange some sort of credit/value for something they ACTUALLY want. It’s a brand experience, another brand impression.”
American Express, for one, is experimenting with letting customers customize their own rewards fulfillment.
No brick is an island.
If you think about blockchain less as a chain and more as a fully connected ecosystem, you begin to understand how this technology can bring an even more human, responsible, and intelligent approach to retail. It’s all too easy to think of the technology as a “sterilizing” force, when in fact it’s democratizing; it’s a way to give all parties more control over the supply chain.
Wedgwood knows that blockchain can’t act alone. He sees a powerful trifecta: “When IoT, AI, and blockchain come together, that becomes the panacea.”