The Blockchain’s Effect on Retail
The use of blockchain in global retail is expected to grow from $172 million in 2021 to $2.1 billion in 2028, with a 42.8% CAGR during the period -(Fortune Business Insights).
But what are the most important applications of this technology in retail? Find out more.
- Blockchain allows consumers to review all of the information about a specific product that has been collected throughout its history and is available in a shared, secure, and immutable database in real-time. This data includes a variety of product details, such as raw material info and attributes related to manufacturing, logistics, and sales. Customers can thus track and verify the authenticity of a product while also learning about the entire value chain. Before purchasing a product, for instance, people can check its authenticity and ensure that it was produced using sustainable methods.
- Retailers can now rely on a more comprehensive database that has been built through the many interactions people have had with each other retailer over the course of its history. As a result, retailers have more decision-making power when they rely on a secure and extensive database of precise people’s past transactions. This enables more precise financing lines or extended credit plans with lower default risks.
- Have you ever had the impression that online testimonials for a particular product or merchant were false? If so, your intuition was probably correct — bots are now commonly used to create fake reviews on online stores. Fortunately, blockchain technology ensures that each customer has only one verification ID, allowing the authenticity of online reviews to be verified and lowering the risk of shopping at fraudulent or cybercrime sites
SCM (Supply Chain Management)
- Blockchain can be a valuable asset in supply chain management practices: With this technology, all parties in the supply chain can communicate more quickly and efficiently. Retailers can make decisions based on data shared with other buyers, suppliers, and middlemen by using a decentralized database that updates itself in live time. This ensures that sales and price forecasts are much more accurate. Finally, smart contracts can be used by retailers to automatically place orders or offer discounts based on current inventory levels or demand forecasts.
- Trading on a blockchain network enables faster, cheaper, and more secure commercial transactions, particularly for cross-border purchases. With this in mind, cryptocurrencies designed for commercial transactions, such as Dash or XRP, are expected to gain traction as the number of retail applications grows.
- Loyalty programs are one of the most important blockchain applications in marketing. Existing programs are often the target of fraud, resulting in losses for some companies. However, loyalty campaigns launched with Blockchain ensure that the campaign’s targets are verified users rather than internet robots, resulting in greater marketing performance. Furthermore, associate merchants can use Blockchain to launch collaborative promotional activities and enable their customers to redeem their benefits across multiple channels. Finally, brands can send digital rewards such as exclusive NFTs using this same data structure.
- Because all campaign data is hosted on a single server, social media managers often question the legitimacy of digital ads. As a result, it’s impossible to know whether a campaign’s impact metrics are real or faked by the advertising channel. Ads on decentralized platforms, on the other hand, increase the transparency of ROI on digital advertising by providing deeper insights into how verified users interact with ad campaigns.
Sailing over the horizon…
Are there any exciting retail applications that can be unlocked by blockchain in the coming years?
Absolutely! When I think about the topic, I see several possibilities for new applications of the technology in retail.
These include the possible emergence of a decentralized marketplace where negotiations for the purchase and sale of goods and services happen without intermediaries. By eliminating the middlemen’s profit margins, buyers could get better prices and thus gain more value.
Imagine a platform where sellers could offer tokenized products and potential buyers could verify all necessary information about a particular product via the blockchain before making a final purchase decision. In addition, payments could be made instantly via digital wallets and cryptocurrencies, with transaction fees much lower than any current acquirer. Finally, logistics operators could be integrated into the platform’s infrastructure and send real-time updates on delivery status over the same network.
Pretty exciting, isn’t it?
Thanks for reading!
Written in July 2022 by Pedro Cecilio.