Blockchain technology: the future of retail supply chain management?
Blockchain is one of the hottest technology topics discussed today. Originally created as the platform upon which to trade cryptocurrency – such as bitcoin and other digital currency – its implications for retailers are far wider reaching than that.
Blockchain essentially refers to a decentralised, digital ledger that creates a permanent and immutable record of transactions between multiple parties, accessible to all participants in the chain, creating one version of the truth.
For retailers, this presents an important opportunity to gain total transparency when managing different vendors and trade partners across the supply chain.
So, how can this incorruptible, imposer of transparency improve the world of retail supply chain management?
Automated and fully audited
Since blockchain technology documents every time a product changes hands, it creates a permanent audit trail of transactions. For retailers, this makes tracking shipments a lot easier. A product’s journey will include a realtime trail of information on who handled it at every logistical stage, as well as when and where; helping decrease the number of damaged, contaminated, lost or counterfeit goods.
Blockchain-based anti-counterfeiting solutions have been developed to be used in many retail areas including luxury items, electronics, and pharmaceuticals. This helps ensure that retailers’ products are legitimate, decreasing industry fraud by certifying goods with the blockchain’s digital ledger record so that stolen merchandise is more easily recorded. Once inside blockchain, the data becomes tamper-proof. Bitcoin transactions cannot be erased, neither can supply chain payments, warehousing conditions, records of stock inventory, or any information relating to delivery times or dates. This helps curb theft and resale of stolen goods, providing a way to guarantee product authenticity.
Rapid and transparent transactions
Blockchain enables worldwide transfer of currency and all kinds of digital and physical assets without the need for traditional banking methods or institutions. Secure and direct between payer and payee, transfers are fast and can be made within minutes, creating a more efficient, open customer and supplier experience.
Catering to the ethical consumer
Supply chain provenance is becoming an increasingly important part of the purchasing decision factor for consumers with more of an ethical conscience. Being able to buy in confidence knowing where their product comes from, how’s it been developed, and that it’s been ethically distributed all contributes to increasing brand trust– particularly in the world of organic trade. Blockchain technology offers retailers opportunities to communicate openly with consumers, and enables certified organic processors and producers to increase engagement by connecting more directly.
Product status visibility
As well as tracing each product to its original source, blockchain can be used to record product status at any stage of the lifecycle. For a cosmetics retailer for example, it is possible to see where each item was produced, its processing and storage history, as well as who and where it’s been handled. Should you have a product recall to execute, you can see which batches you need to deal with and who has bought them.
So, with all the benefits blockchain has to offer, why aren’t more retailers using blockchain?
One thing we do know is that blockchain is still in its infancy. As with any technological innovation, there are barriers that prohibit its adoption, including the costs associated with its implementation but also challenges in encouraging uptake of it among trading partners across the supply chain. The benefits of its use, of course, become greater the more participants are active on the network.
However, the benefits of blockchain are clear and its potential to help retailers provide a faster, secure, and more transparent service to customers leaves little room for doubt. If it gives retailers the opportunity to enhance operational efficiency, ensure product quality, remove supply chain blockers, and create a trustworthy brand image, it’s future is looking promising.