The impact of blockchain on the retail sector
Blockchain has been around since 2009 and already has many (known and unfamiliar) applications in the retail sector. Yet this technology is still in its infancy and the (future) possibilities are immense. Plenty of reason for the Blockchain expert group of research platform ShoppingTomorrow to study the impact of blockchain on the retail sector, particularly in the areas of identity, payment and supply chain management.
Blockchain and bitcoin (or crypto currency) are often mentioned in the same breath, but bitcoin is an application on blockchain, just as e-mail is an application on the internet. In other words, many more valuable things can be exchanged using blockchain technology, such as contracts, proof of purchase and loyalty programs.
It is widely known that the re-entering of identity attributes at, for example, web stores is conversion-reducing. In addition, consumers are becoming more reluctant to share information with people or companies that they hardly know. Blockchain offers a solution for this problem, because the technology gives the possibility to create a secure online environment where you can safely store all your personal data. Instead of having to enter your details again at every webstore, in the future you can give permission to third parties to have information retrieved from that vault.
Blockchain for identity management is clearly an application that will be rolled out in the longer term, but that certainly makes it no less important. Indeed, a good online identity is a prerequisite for future digital progress where validated proof of identity is the starting point for socio-economic participation in tomorrow's society.
The use of blockchain will help to reduce the administrative burden and costs of the current payment infrastructure and will also reduce the counterparty risk. This leads to less fraud damage, which therefore also has to factored into the consumer the price less. There will be no more subscription fees to certifying parties, no more expensive insurance and the use of cryptocurrency will prevent unlawful chargebacks. All this helps to prevent liquidity problems for retailers.
The digitization of society ensures that the dependence on banks is increasing. Many consumers know this, find it unpleasant and use cash for transactions that they do not want to pass through the banking system. This is also a choice motivated by privacy considerations. With the emergence of bitcoin, a digital alternative for cash has suddenly appeared on the market. It has exactly the same features and is also digital. This makes it very mobile, very safe and not bound by national borders.
Supply chain management
Blockchain offers many possibilities within supply chain management. For example, blockchain applications can help retailers to improve visibility in the supply chain, to guarantee the origin and authenticity of products, to speed up transactions and to reduce processing costs. Retailers should then also collaborate with other parties and chain partners within joint projects to test how and where blockchains can fit into their business or operation. Retailers who take a proactive approach quickly gain benefit by converting labour-intensive tasks into fully automated processes that are facilitated by blockchain.
The impact of blockchain on the retail chain is minor in the short term and huge in the long term. The advice of the expert group for retailers is therefore: Start participating, follow training and create understanding and awareness. Start your experiment and learn from it. Connect with others, work together with the government and get off the starting blocks. Learn and experiment. "Think BIG, act small!"
You can read all the recommendations in the blue paper of the Blockchain expert group, under the supervision of CryptoTaub.