In May 2018, a new report by the audit and consulting firm Deloitte revealed that blockchain technology is going to change the way things work in the retail and consumer packaged goods (CPG) industry. The firm came to this conclusion after analysing almost 50 projects in the industry, where blockchain had been used to great effect.
Deloitte found that the technology can be put to use in three main categories – supply chain management, impact on consumers, and payments and contracts. Through blockchain technology, many procedures and processes will be made simpler and faster, leaving retailers free to concentrate on one goal alone, consumer satisfaction.
Blockchain is Disrupting the Retail Industry
When IBM surveyed 203 organisations in the consumer industry, it found that 18% of companies had already started using blockchain technology and almost 70% of companies were planning to do so in the next 3 years.
Consumers now want their purchases delivered faster than ever. While other technologies are enabling this, blockchain is ensuring that they get exactly what they ordered. This is especially relevant to the food industry, where edible items have a fixed shelf life and a direct impact on health.
Through IoT sensor tagged QR codes and blockchain’s chronological digital record applications, supermarket retailers are now able to track the journey of food items like fish, all the way from the sea to the shelves. An example of such technology is the platform called Provenance, which uses blockchain technology to establish transparency in retail purchases. All the elements in the supply chain, including the supplier, manufacturer, retailer and end consumer, can now track the histories of products using the platform.
Businesses around the globe are using blokchain tech to improve employee efficiency and streamline HR processes. This is particularly important for the retail sector, since stores are located all over the world, making workforce planning difficult. Payroll, which is a repetition-heavy task, can be digitised using blockchain, which will increase productivity. It will also free up teams to pursue other important matters, such as meeting new suppliers or looking into building better customer relationships.
Blockchain has the power to tell the location of stocks and where they are being sold in real-time. Company heads can use this information to deploy more staff to specific stores, where activity is high, making the stores more productive and efficient.
The Deloitte Report
Through the use of smart contract-based loyalty programmes, consumers will get rewarded. The report talks about how blockchain can also be used to locate stolen products or be used to fight counterfeiting.
Steve Larke, the technology consulting partner at Deloitte, had said in a press release that blockchain’s benefits to the consumer would be in the form of increased savings, safer and high-quality products, and an increased level of trust.
Consumers will be able to buy directly from farmers by using grocery e-commerce solutions built on the decentralised platform. The report also explored options where blockchain could help improve store inventory practices and confirm transactions through smart contracts.
Major companies are already taking steps to leverage this nascent technology. Retail giant Walmart has reportedly filed for two patents that would help it store payment data using blockchain technology. Walmart, along with Kroger and various other food suppliers, has collaborated with IBM in an initiative to improve food traceability, using blockchain technology.
Amazon has registered three internet domain names based on the cryptocurrency movement. This is huge, considering that Amazon still doesn’t accept any form of cryptocurrency payment. In the future, Amazon could start doing so, or use Ethereum in its dealings with app developers who work on Alexa. A lot of possibilities exist here.
Deloitte has hinted in its report that businesses that fail to adopt the technology are at risk of falling behind. This almost sounds like ‘fear of missing out’ (FOMO), which is a huge driver of the cryptocurrency market. When a buzz is generated around a certain token, many investors jump on the trading bandwagon to try and capitalise on the hype.
Although blockchain technology holds great promise, it is through proper planning and strategic ideas that tangible solutions can be created. Trial projects, exploration, careful observation and intense planning are the four main steps through which a significant change will come.