Blockchain technology is a decentralized, immutable ledger to record transactions, track assets, and build trust. An asset may be a tangible asset (a house, car, cash, or land) or can be intangible (intellectual property, patents, copyrights, branding). Anything of virtual value can be recorded and traded on Blockchain, reducing risk and bringing down the costs for all stakeholders.
In a traditional centralized system, there are many flaws such as:
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It cannot be completely trusted
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Doesn’t provide complete security
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Is unconcerned about privacy
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It costs far too much time and money
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There is no transparency
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Regulatory compliances and complicated contracts
In a Blockchain decentralized system, there are many advantages such as:
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Removes all intermediates
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Verify every single transaction (of data)
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Cost-cutting
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Protocols with high levels of security
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System with a transparent network
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Decentralized and immutable
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No chance of being scammed
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Highly secure as it requires a high investment to hack the system
Blockchain has the potential to open up a slew of new possibilities for the retail industry. Even before the pandemic, the retail industry was flourishing. Despite the fact that many retailers provide internet shopping, their physical storefronts generate the majority of their earnings. Following the pandemic, however, merchants had numerous challenges, including managing the supply chain, selling items, establishing stores, and keeping all customers and staff safe.
This could all be prevented if the industry adopted blockchain technology from the beginning. In actuality, blockchain’s dependability, durability, and quality of tracking and assisting in management processes can provide the ultimate digitization that retail industries demand.
Key challenges in the Retail Sector:
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No awareness of advanced technologies
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Product Price Inflation
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Cyber hacks
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Fraud and Counterfeit goods
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No proper customer identity management
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No proper inventory management
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Streamline Retail Sales Tax
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Keeping up with consumers changing expectations
Benefits of implementing the Blockchain in the retail industry:
Enhancing Inventory Management
Sales forecasting has become more difficult for retailers with complex SKU (Stock Keeping Unit) management. Every piece of information linked to retail operations, from real-time location to exact source of origin and number of products produced or sold, can be kept on the blockchain. Blockchain’s capacity to provide traceability can improve inventory management efficiency by allowing for easy tracking of product availability.
Product Authenticity Tracking
The capacity of blockchain to provide trust to the system can assist grocery shops that specialize in organic food products. Customers can track a product’s route from the manufacturer to the store via a blockchain solution adopted by supermarket chains or other retail firms.
Detecting Thefts
The US economy roughly loses $30 million every year in cargo theft. IoT sensors in supply chain can provide movement of data about products at each step of the retail supply chain process that is stored as a permanent record in Blockchain.
Reducing Cyber hack incidents
The retail business is frequently subjected to security risks. Consumers would lose trust in firms when their personal information is compromised, which will reflect poorly on the brand. Blockchain can provide firms with high-security protocols to combat cyber-attacks and safeguard the network from a third-party organization.
Improving Customer rewards/loyalty programs
In traditional loyalty programs, it is impossible to track the points. In a Blockchain-based Smart Loyalty Program, Users may redeem points across numerous channels and platforms minimizing liabilities and improving customer satisfaction thus operating costs and lowers the likelihood of fraud.
Proving the product’s authenticity
By allowing consumers to scan a code etched into the product to access the product life cycle’s history, implementing blockchain in retail can renew the trust and make customer relationships better.
Examples of Retail Companies using Blockchain Technology:
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Walmart – Walmart has successfully employed blockchain to improve not only the efficiency of their food supply chain, but also the consumer experience all around the world.
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Amazon built supply chain trust for verifiable tracking of items using Blockchain’s distributed electronic ledger.
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Home Depot solved 65% of its vendor disputes using Blockchain.
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Alibaba uses Blockchain to improve product traceability. Also built a cross-border e-commerce platform called Kaola based on Blockchain to record all custom clearances, product registrations and logistics details.
Blockchain in retail has the potential to transform several challenges in the retail industry. By utilizing blockchain, this industry can provide exceptional services to consumers.
The retail business has a window of opportunity to employ blockchain to address all challenge of the new normal.
Contact our team of blockchain development professionals if you want to integrate blockchain into your retail business.