The sudden, dramatic rise in the value of Bitcoin has brought a lot of attention to blockchain technology in recent months. However, while facilitating cryptocurrencies is certainly one way to use this particular fintech, it also has many other retail applications. Many popular brands are already accepting Bitcoin as a payment, partially due to the advantages blockchain offers.
Blockchain technology essentially serves as a public, digital ledger. It updates in real-time, is extremely difficult to hack, and allows companies and individuals to record transaction histories and product data.
Expect more retailers to start using blockchain as a means of tracking items and recording information about transactions. Doing so offers the following key benefits:
With a blockchain, a customer can learn everything about an item’s history. This makes it very difficult for unethical retailers to sell counterfeit goods. It also makes it difficult to resell stolen goods. Because the blockchain can also record information
about both current and past ownership of an item, a buyer can check if the person selling it is the actual owner before making a purchase.
There are many reasons customers might want to know about a company’s supply chain. Maybe they want to confirm that all materials used in its production were ethically sourced. Perhaps the company claims to adopt “green” manufacturing and shipping practices and the customer wants to verify these claims. Sometimes, customers simply want to know whether an item is new or whether it’s been returned in the past.
Blockchain technology makes this possible. Again, because it records data about an item’s history, customers can research all aspects of the supply chain before choosing to make a purchase.
When you have a public ledger that updates in real-time and records information about an item’s shipping status, developing an effective logistics strategy becomes much easier. Companies can use this information to identify inefficiencies in every step of the supply chain, from the manufacturing phase to the moment an item arrives on a store shelf, allowing them to make any necessary adjustments. Customers can also use the blockchain ledger to monitor the status of a shipment. This doesn’t just make life more convenient for shoppers; in some cases, the ledger can allow businesses to schedule their own tasks more effectively. For example, if an auto body repair shop orders a needed item but the blockchain ledger indicates that the item won’t arrive for another three days, the shop’s employees can focus on other work in the meantime and prepare more effectively.
The ability to monitor shipments also boosts customer safety. For instance, perhaps a food company issues a recall of certain contaminated items. Thanks to blockchain technology, supermarket owners can easily track which items were contaminated and remove them from shelves quickly.
It’s easy to verify the quality of certain luxury goods with blockchain. For example, startup Everledger uses blockchain tech to serve the diamond industry, allowing companies to register a diamond in the ledger and record more than 40 of its identifying features. Both customers and retailers can later refer to the ledger when researching the quality of the diamond.
This enhanced degree of quality assurance also applies to other items, like food. Want to be entirely certain an item at the supermarket actually contains the fresh, natural ingredients its manufacturer claims to use? Checking on it is as easy as looking at the blockchain ledger.
Although one could argue this particular example isn’t technically related to retail, it serves to illustrate how blockchain and fintech are going to make life more convenient for the average person. Because blockchain ledgers immediately update, certain banking processes, like transferring money overseas, are easily streamlined. Instead of waiting for the bank to process the funds, the money can theoretically arrive in an overseas bank account within only a few hours.
From a retail perspective, this may make it easier for customers to purchase certain high-end items from foreign companies.
Retailers may also use blockchain ledgers to streamline the returns process. When a company can easily learn when an item was sold and to whom it was sold, it’s much easier to confirm whether it’s eligible for a return.
Again, as with many aspects of the fintech revolution, the role that blockchain tech plays in shopping continues to evolve. As more and more retailers embrace this technology, we’ll learn more about the benefits it has to offer. What’s already clear, though, is that blockchain tech isn’t just a novelty, nor is it merely the key to making cryptocurrencies like Bitcoin viable. By boosting quality assurance, establishing supply chain transparency, and providing key information about ownership history, blockchain tech will greatly improve the overall shopping experience for both customers and retailers.