What blockchain means for the future of retail

Chances are you’ve heard about blockchain.

If, somehow, you haven’t, here’s a quick overview: blockchain is a form of digital record keeping. It’s a type of distributed ledger technology where information is structured into “blocks.” When any new data is added, a new block is created to hold the details. Each block is linked chronologically forming a chain with the records stored in a decentralized location. (For a more detailed explanation, check out our article on Blockchain: What Small Businesses Need to Know.)

As a retailer, you might be thinking “that’s great, but what does that have to do with my business?”

In fact, blockchain is already revolutionizing many processes across various industries, including retail.

A new survey found that 78% of retailers will adopt blockchain technology by 2023, which is quite an increase from the 6% of retail companies currently ready to embrace blockchain.

It’s well-known that businesses that don’t adapt to change and fall behind with new technologies end up failing. (Blockbuster, anyone?) It’s also no secret that retailers today face increasing pressures surrounding transparency, privacy, and authenticity. But blockchain technology can help retailers evolve and meet those changing expectations.

A new survey found that 78% of retailers will adopt blockchain technology by 2023, which is quite an increase from the 6% of retail companies currently ready to embrace blockchain. What’s more, the market value of blockchain in retail alone is expected to reach $2.3 billion in five years, up substantially from its current value of $80 million.

It’s obvious that blockchain is set to have quite the effect on retail. If you’re wondering what those effects will look like, here are a few of the ways that blockchain is changing the future of the retail industry.

Supply chain authenticity

Every retailer that relies on global supply chains wants to know they are getting what they paid for. The problem is that for a lot of supply chain networks no single entity oversees the end-to-end movement of goods. Unfortunately, that lack of oversight can lead to counterfeit goods.

And the problem doesn’t discriminate; it applies to big and small retailers alike.

But with blockchain, counterfeiting is near impossible. The technology provides a record of every touchpoint for an item as it travels through the supply chain – from the originating source all the way to the final recipient. That means that with blockchain, retailers can be assured of the authenticity of goods and ensure product safety with foods.

And if certifying authenticity weren’t enough of a benefit already, using blockchain to track goods also means less paperwork, better communication across the supply chain, and faster movement through customs for imports.

Retail/etail content

You need 7 tools to master international trade. Find out what they are.

Consumer confidence

Once you’ve got an application to track products across your supply chain, you can easily use that information to improve consumer confidence.

Consumers today are more interested than ever before in knowing where their products come from and they’re often willing to pay more for something that’s sourced in a way that aligns with their values. According to a survey from Nielsen, 66% of global consumers are willing to pay more for sustainable goods.That rate increases to 73% with millennials.

It comes down to consumers wanting to know that they are getting value for their money when making a purchase.

So if you can enhance transparency and actually show consumers an item’s lifetime journey, you’re going to have an advantage.

With blockchain technology, businesses can easily provide consumers with that information (think verified links for ecommerce and QR codes for brick-and-mortar stores). That means consumers can check for themselves if a product was ethically-sourced or grown locally.

Think that sounds super futuristic? It’s not. In fact, companies are already making use of blockchain for this very purpose.

Loyalty programs

Every retailer knows the importance of customer loyalty.

Did you know that there are 3.3 billion loyalty program memberships in the US, an average of 29 per household?

That means small retailers face fierce competition to stand out amongst the crowded loyalty program landscape.

Did you know that there are 3.3 billion loyalty program memberships in the US, an average of 29 per household?

With blockchain, retailers can improve loyalty programs by partnering with other businesses to offer a comprehensive selection of rewards that can be redeemed across a network of partners. In this case, a blockchain network allows program partners to easily confirm customer information and validate rewards without the need for a middleman or clearinghouse.

Blockchain can also get rid of lengthy delays to update customer information following a purchase. Instead, a transaction can be recorded and accessed in almost real-time, which means customers can earn and redeem points faster.

Loyalty programs are known as being vulnerable to data breaches. And with cyber attacks top of mind for many customers of late, an unsecured rewards program could have severe implications that could ruin a brand’s reputation. Especially considering that 87% of consumers say they will take their business elsewhere if they don’t trust how a company is handling their data. However, blockchain makes it nearly impossible for hackers to access customer information or steal loyalty program points.

A secure loyalty platform helps solidify a customer’s trust in your brand, leading to more sales, which translates to a significant return on your investment.

Digital advertising

Digital advertising has become essential for many businesses, particularly retailers. Digital advertising has become so popular that its spending reached a record $88 billion in the US last year, marking the first time digital ad revenues have overtaken television.

Despite its popularity, the digital advertising industry has its share of problems – lots of them. In fact, it’s estimated that the cost of global ad fraud reached $16.4 billion in 2017.

A dramatic rise in bots, difficulties proving the identity of advertising channels, brand safety, viewability, tracking, and GDPR compliance are some of the issues plaguing the digital advertising realm. And for many retailers it means they aren’t getting the ads they pay for.

Despite its popularity, the digital advertising industry has its share of problems – lots of them. In fact, it’s estimated that the cost of global ad fraud reached $16.4 billion in 2017.

It just so happens that the main problem with digital advertising is the leading attribute of blockchain technology: transparency.

Blockchain networks can be used for “whitelisting” legitimate sites with no history of using bots. These networks act as registries so that brands can make informed decisions about which verified sites to advertise on. An example is the adChain Registry, which is a new blockchain-based platform that allows a community of participants to curate a directory of quality publisher domains.

What’s more, blockchain can also provide retailers with ad verification to help accurately track a campaign’s reach, a bonus that any marketing team will be thankful for.

Payments

Of course, it’s impossible to talk about the benefits of blockchain without mentioning how it can transform payments.

Making sure that things move smoothly across your supply chain means having a fast and reliable payment process in place. If your vendors don’t receive money, you don’t receive products. And that spells trouble for your retail business.

But Veem can help.

If your vendors don’t receive money, you don’t receive products. And that spells trouble for your retail business.

Veem uses multi-rail technology to find the most efficient, cost-effective, and secure route for your transaction. One of those rails is blockchain.

In fact, Veem was the first global payment platform to start using blockchain.

With Veem you never have to worry about wire fees or hidden charges. Plus, with end-to-end tracking of every transaction, you also never have to worry about where your money is.

Ready to bring your payment process into the future? Sign up for a free Veem account today.

* This blog provides general information and discussion about global business payments and related subjects. The content provided in this blog ("Content”), should not be construed as and is not intended to constitute financial, legal or tax advice. You should seek the advice of professionals prior to acting upon any information contained in the Content. All Content is provided strictly “as is” and we make no warranty or representation of any kind regarding the Content.