Retail giants Amazon and Alibaba have been using blockchain to improve the traceability of their products for quite some time. Now Carrefour, Nestle, Walmart, IKEA, De Beers, and more have also joined the crusade to improve their supply chain operations with time and cost-efficacy.
Evidently, Gartner said it right when it predicted ages ago that the business value-add of blockchain will exceed $3.1 trillion by 2030!
If you’re into a retail business, you should know that these are exciting times for you. Blockchain with its robust principles in maintaining traceability and immutability of records is emerging as one big solution for retail enterprises’ most daunting challenges. But before diving deeper into those applications or challenges, let’s refresh our knowledge on Blockchain first.
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Blockchain: The Technology’s Overview
In short, Blockchain is an immutable sequence of records called blocks that helps in tracking data with absolute reliability. In a blockchain, all information stored is linked to one another using hashes. Hashes are nothing but functions that transform information into fixed-length encrypted messages to prevent fraudulent transactions and maintain records’ accuracy in a blockchain. Since the hash encryption is quite foolproof and the interlinking of data makes the entire chain immutable, the technology brings many advantages for businesses struggling with traceability issues.
In the retail industry, this founding principle of blockchain can be leveraged to resolve product quality assurance, prevent fraudulent transactions, improve loyalty schemes, track inventory, automate back-office administration, and implement more secure and effective payment systems. If you’re still unsure whether blockchain is the answer you’ve been looking for for ages for your retail business, here are some signs that can help you figure out the same.
Signs Your Retail Business Needs Blockchain
While Blockchain can bring major cost savings into your business by eliminating bureaucratic red tape and implementing real-time transaction accounting, in overall it is not a small investment. The distributed architecture and the involvement of multiple nodes and participants for every single transaction can make it a great expense. Therefore, it’s wise to first evaluate whether your retail business can actually benefit from the implementation of blockchain or not.
- Does your business require you to store data?
If your business doesn’t require you to store a considerable amount of data, then you will not have any use of blockchain. On the other hand, if you need to store a lot of data and manage them in multiple databases, then Blockchain can prove to be just the right solution. It will simplify the data management for you by offering you a single view towards all your data, with complete traceability, and real-time updates.
- Do you rely on central authorities to verify your data?
Blockchain works on the basis of a consensus algorithm, meaning you won’t have to rely on a central authority to verify your data. Rather multiple parties are involved to verify each entry on the record. This in one place will improve the transparency and reliability of your data, and on the other will eliminate the dependency on central authorities.
- Is your data dynamic and the rules more permanent?
Dynamic data requires a lot of paperwork but with Blockchain you can update all your data in real time, and in a way that maintains the record history. This in addition with the permanence of data rules will make Blockchain an ideal solution for your retail business.
If your answer is “yes” to most of these questions, then your retail business seems to be ready to get disrupted by Blockchain applications.
Benefits of Blockchain in the Retail Industry
So, if by now you know that blockchain can actually help you optimize the operations of your retail business, it’s time for you to know about the benefits you can expect post its implementation.
1. Cost Savings
Blockchain eliminates the need for third parties or intermediaries to establish trust between varied parties when making a transaction. Instead, it relies on consensus to validate every transaction, which then gets entered into an immutable entry. This way you can save all the costs involved with mutual trust intermediaries and run your operations smoothly.
2. Supply Chain Traceability
Most retail businesses have a complex supply chain, leading to difficulty in tracking your retail produces to their points of origin. But when you implement blockchain in your supply channels, every product will have trailing information of their origin and their entire journey. This makes the entire supply chain more manageable in terms of assuring quality.
3. Improved Consumer Trust
By authenticating every touchpoint for the products in its supply chain, your retail brand can easily gain more trust. Your customers can easily verify the quality of goods by tracing back its journey through the immutable records and thus confidently rely on its origin and authenticity.
4. Increased Operational Speed
If you’re still relying on the traditional paper-based methods to maintain records of your products, you must know how time-consuming every operation can be. With Blockchain, you can increase the efficiency of processes like data updation, synchronization, settlement, etc., all thanks to a single decentralized digital ledger that can be accessed and verified in real-time by all the authorized users.
4 Stages of Blockchain Implementation in a Retail Business
Now, when you’re better aware of the major advantages of using blockchain, you’re also better prepared to understand the importance of the sophisticated approach to implementing the same. Here is a brief guide on how you can implement a blockchain in your retail business.
1. Set Goals
Blockchain as a technology has many applications for businesses in all industries, retail being no exception to that. This is why, when you’re planning to adopt blockchain for your retail business, it is highly suggestible to have a clear idea about what exactly you want to accomplish with Blockchain. For that, you can prepare a list of all use cases where you can implement blockchain. Here are some use cases you can add to your list-
- Store and track every change in supply chain data.
- Validate resale and ownership.
- Consensus-based authentication for goods.
- Protection for high-value goods.
- Prevent fraudulent activities and more.
2. Develop Proof of Concept
Once you have finalized your list of goals, you can run some feasibility tests on the same. To do that you can develop a proof of concept or POC to verify whether your goals, as you expected from the blockchain applications, are executable in the real world. Doing so initially will help you figure out which applications you should actually invest your time and resources into and which you should put to rest. Another advantage of developing a proof of concept is you will get to know the major pain points that can emerge once the blockchain implementation begins. Here’s a list of sophisticated steps you can do to execute this stage of blockchain implementation-
- Pick the blockchain application and its goals
- Plan the product features
- Define the major KPIs
- Identify the protocols to be used
- Create the blockchain governance architecture
Read More: How Digitalization is Transforming the Retail Industry In 2022?
3. Building Blockchain Application
After developing the POC, and getting affirmation from all the stakeholders involved, you’re all set to begin the development phase for your blockchain applications. Here you should begin by enlisting all the blockchain features you want to include in your application. Some of the essential ones are-
- Decentralized storage
- Smart contracts
- Data security
- Immutable records
- Tokenization
- Role and Access
Most blockchain applications will leverage all or some of the above-mentioned features to achieve the goals assigned to them.
4. Deploy & Feedback Implementation
The application once built can be tested by users and the stakeholder on the KPIs determined in stage two. This will help in assuring that you’re on the right track with the application and your ROI goals always remain achievable. For this, you can use the following steps-
- Set the application on the task
- Gather all the implementation pain points
- Evaluate the KPIs and results against expectations
- Improvise to make smaller changes as per the requirements
- Collect feedback for major development changes
- Re-develop the functionalities as per the feedback
With these clearly defined four stages, you will make the implementation process more effective and efficient.
How Much Does Blockchain Implementation Cost for Retail Businesses?
Estimating the cost for a retail blockchain project cannot have a direct answer; reason being, there are a lot of factors involved in the process.
- Type of the Blockchain App
- The complexity of the features involved
- Tech-stack required for the entire project
- Skills required for the application development
- Integration with third-party tools
Other than these discrete factors, certain scenarios also weigh in when it comes to estimating the project cost. Major among them are-
- Building the project in-house
- Outsourcing a blockchain development company
- Hiring freelancing blockchain developers for the project
Apart from these scenarios, additional considerations like the experience and expertise of the developers, the timeline of the project, and the region of the freelancers and the company you hire, also bring huge variations in the final cost. This is why, if you really want to know the precise cost of your blockchain project, we suggest you request a quote from a reliable blockchain app development company.
Tips to Learn from Retail Companies that are Doing It Right
As mentioned before, retail companies around the world are leveraging the advanced data management and security features of Blockchain applications and are constantly reaping benefits of it. Here is a list of the major players their the industry and what they’re doing with the technology to seamlessly improve their net revenues.
1. Walmart
The retail giant has been using blockchain to make its edible products traceable. The company says it’s doing so in order to maintain food quality effortlessly and eventually strengthen their customer’s trust for increased revenues. The company uses Hyperledger Fabric for the application and is also working simultaneously on two new proofs-of-concept, to further leverage the technology to automate quality assurance in its supply chain.
2. Amazon
The online retail conglomerate is using blockchain in its retail as well as an advertising business. In fact, the company’s blockchain investment is not limited to the tracking and tracing of its retail products, rather it offers the network and infrastructure to other retail companies as well. The Amazon Managed Blockchain helps companies eliminate the overhead required to create a network that facilitates millions of transactions. Another POC Amazon has been working of late is its ‘supply chain trust’ which tracks products through the supply chain using a distributed electronic ledger.
3. Alibaba
Like Amazon, Alibaba too has been using Blockchain applications to track not just its inventory and products across the supply chain but offer similar architectures and services to its clients. They’re presently working on a cross-border e-commerce platform named Kaola which is entirely based on blockchain. Once developed, it will record all the logistics details including custom clearances, suppliers’ registrations, etc.
4. Carrefour
Carrefour was among the first few retailers who trusted blockchain technology from the very beginning. It has been working on blockchain applications for quite some time now tracking their products across their supply chain. What’s interesting is, that since the company started its POC with Blockchain some time ago it has already started seeing measurable benefits of the same.
5. The Home Depot
Home Depot, the largest home improvement retailer in the United States, is also heavily investing in technology to eliminate all sorts of supplier disputes. The company uses blockchain to track all the purchases from its suppliers to ensure absolute accuracy of records, mitigate any probabilities of false entries, and use a consensus-based algorithm to record every transaction. This has helped company in reducing the cases of inventory bloats, making its supply chain more efficient.
Read More: Top Industries Blockchain Technology will Transform
6. IKEA
Another well-known name in the home improvement realm, IKEA the Swedish multi-national-conglomerate, is also using blockchain for invoice settlement. In fact, IKEA was among the first big names around the globe, that used smart contracts for before they become popular. The company uses the technology to process its commercial transactions. The platform it uses for the purpose is Ethereum.
7. Target
Last, but not least, among the many retail businesses using Blockchain to improve their operations is Target. Known for its mass-market retail stores, the brand uses blockchain to manage its supply chain. They too are using Hyperledger Grid for the purpose. Another project they’re using Blockchain for, ConsenSource, is focusing on the certification of suppliers for the company’s paper manufacturing.
Conclusion
Blockchain is disrupting the retail industry for the better. The immutability of the records, independence from third-party arbitration, and the consensus-based data ingestion all lead to a better-managed data storage, that will help retail businesses in fighting their historical challenges against supply chain traceability and consumer trust.
As an industry leader in developing blockchain apps, Matellio has a team of experts who understand the core functionality of the technology and knows how to leverage the same. They know which libraries can simplify the development process and which applications of the technology can bring major differences in your routine operations. To start your journey in Blockchain with Matellio, all you need to do is fill this form with requirements and ideas around the required Blockchain application. You can also book a free consultation call with our experts about the functionalities you’d want your blockchain retail app to deliver.
