In a recent blog, we discussed how Blockchain works and what it means for the future of the Banking Industry. Blockchain has emerged as an exciting new development across the retail industry, in this blog we explore how the Blockchain can improve your processes, gain trust from customers and ensure health and safety regulations are met.
How does blockchain work?
Blockchain is a digital record of data and transactions chronologically linked. Using distribution ledger technology, all data is available to view in real time, so that any updates or changes can be seen across the network, and makes it possible to see the full history of a product and its components. These blocks of data cannot be edited or deleted in anyway, making the technology difficult to hack and therefore a secure alternative to the current digital data.
Blockchain can record any sort of data including deeds, intellectual property, art and contracts whilst minimising paperwork and speeding up transactions, in turn lowering costs.
With the chronological product story that blockchain provides, customers are able to see data and information from every point in the supply chain. For example, if a supermarket was selling a banana cake, the blockchain data would not only tell you exactly where and when that cake was made and by who, but the data from the individual ingredients would also be tracked. This means the retailer can ensure the confectionary company is using Fairtrade bananas and sugar and that these ingredients have been ethically sourced, and also that the products are fresh.
In recent years more focus has been increasingly put on customers purchasing ethically sourced products, knowing where they have come from and also how they were made. Blockchain will allow complete transparency between retailers and customers giving the retailer the ability to prove that products are responsibly sourced, ethical and will add a new level of trust to the brand-customer relationship.
WAVE, a company based in Israel, are already offering blockchain technology to help companies track their supply chain, making the process completely secure and paperless.
Authenticity of luxury brands has always been an issue for popular fashion houses, with convincing knockoffs available at far lower prices, diminishing the exclusivity of the items. Data tracked from the sourcing of materials to customer purchase will guarantee customers that what they’re buying is a genuine and confirm authenticity.
Blockchain will also help curb theft of expensive items and resale of stolen goods through tracking the ownership of the items.
Fashion brand, Babyghost are already taking these steps by partnering with Chinese blockchain company BitSE, to deliver a range of clothes incorporating near field communication (NFC) tags which will be verified at every touchpoint using blockchain technology.
Tracking shipments is about to become a lot easier with the use of blockchain. Every logistical stage of a product's journey will have information on who handled it, where and when in real time, resulting in fewer lost and damaged goods.
This could also be used to monitor the health and safety requirements and contamination of food products by tracking temperature and air condition at all times through the shipping journey. This reduces epidemics caused by contamination as seen in Europe’s egg crisis. By tracking the origin of all eggs, supermarkets would have quickly been able to tell which items contained the contaminated eggs from a farm in Holland and dispose of them accordingly.
The world’s leading retailers and food companies are already exploring how blockchain technology can be utilized to ensure the food supply chain is safer which will result in less food waste, not only helping the environment but also company profits.
4. Payments and e-commerce
Until this point blockchain has been most widely known for its use in tracking transactions and ownership of crypto-currencies like Bitcoin and has been successful in creating a secure and trusted system.
Blockchain will not only assist retailers move into accepting crypto-currency payments but the digital records created will also help streamline the returns and refunds process. Large purchases like cars, houses and other high ticket items can also have their ownership tracked and verified to reduce the resale of stolen goods.
Global companies including online travel giant Expedia are already accepting Bitcoin payments for hotels. E-commerce platform Shopify also allows its users to take bitcoin payments.
5. Proof of ownership
This leads on to proof of ownership. As mentioned above, an obvious benefit is a reduction in crime and counterfeiting, but another key use for many retailers will be the proof of provenance. The ability to undoubtedly prove who made, owned or had contact with certain objects or designer goods will increase their value and ensure the buyers know exactly what they are purchasing beyond what they can see.
In the future this will undoubtedly be a key source in dating antiques, knowing items history and tracking materials and origin of previously owned items. An example of this is Ascribe, a company that uses the blockchain to prove ownership – this time for creators. Artists can use the system to issue digital artworks and to register themselves as the creators. It can also track sales of the artwork, meaning that both creator and owner are permanently recorded. Ascribe can even be used to transfer intellectual property if desired, from the right to sell work on the artist’s behalf or display rights for a certain period of time.
For independent retailers, this type of security could be hugely valuable in reducing concerns over ownership and potentially even preventing copyright claims.
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