Thursday, January 6, 2022

Why Retailers are increasingly in favor of Blockchain

The developments around Blockchain and distributed ledgers technology are proceeding at a breath-taking pace. It has become essential for retailers to pay attention to the updates. While Blockchain tech will not revolutionize retail tomorrow, with the innovation and investment involved, it has already started to disrupt the industry.

Some of the areas in retail where Blockchain can be leveraged are:

Supply Chain

Online retailers are responsible for a significant share of retail sale increases, which now contributes to 11% of the total increase. With mobile payments expected to be over $447 million yearly, it has become critical for retailers to adapt their systems that cater to the mobile and internet-based payments.

Blockchain technology is equipped to deal with these challenges as it can provide oversight for the supply chain management. Regardless of a retailer’s sub-sector, establishing a more transparent supply chain for the customers has become a necessity now.

The food-traceability technology market valuation is expected to reach $14.1 billion by 2020. Blockchain is equipped to facilitate beyond product losses and fraud prevention and provide transparency in retail supply chains. Blockchain will give early adopters a competitive edge and is likely to become the industry standard.

Read More: COVID-19 is Driving Stronger B2B Customer Experiences

Preventing Counterfeit Goods

Retail losses due to fraud were estimated over $23 billion last year. The cost of counterfeit products extends beyond the monetary price as it compromises a brand’s reputation. The retail fraud transactions went up from 1.47% in 2016 to 1.58% in 2017.

Retailers estimate that out of their global sales, 11% of their returns will be fraudulent. Blockchain technology’s ability to assign unique identifiers with each product can provide unprecedented security to identify counterfeit items in the supply chain. The technology can also immediately reject fraudulent returns.

Reducing Cyber Hacks

In 2013, Target’s servers were attacked, and credit card data of over 40 million consumers was compromised. The data breach costs were as high as $150 million. It has to be noted that the damage from these breaches ranges far beyond settlements and stock prices.

Over 19% of shoppers said that they would stop shopping at retail that cannot protect itself from hackers. Experts believe that since this year several cybersecurity companies have been actively switching to Blockchain, it’s likely that the retail industry too will follow their lead.

Digital Advertising

The lack of transparency is hurting the industry of digital advertising. A significant risk comes from the rise of bots acting like humans. To solve this, a lot of big digital agencies and the Interactive Advertising Bureau have started experimenting with Blockchain to address some of the digital advertising problems.

Experts believe that though Blockchain is not very fast, and the ad tech space required high speed for real-time market bids, the way the technology is growing will soon have a significant impact on the retail industry.

The Chinese e-commerce, retail, Internet and technology company, Alibaba has announced its plan of integrating Blockchain into its Intellectual Property Protection by September 2019. The platform Ali IPP will link international brands’ electronic deposits to the Internet courts and provide a basis for the protection of litigation rights.

Read More: Digital Advertising – Marketers Are Going Digital despite Challenges

Alibaba financial arm Ant Financial Services also launched two of its Blockchain subsidiaries in March 2019. Reportedly, with the use of Blockchain, Alibaba’s pilot in tracking rice produced in China’s Wuchang district will prove an aid to the people and the government was successful.

Experts say, Blockchain is not going anywhere, and with enough developments across consumer and business applications, retailers must pay attention to the technology and track where it is headed next.

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