Blockchain – A Driver for Growth in Retail

Sneha Kumar • January 10, 2022
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Retail and CPG businesses have been booming since the advent of digital and the pandemic accelerated the adoption of digital-first behavior for companies, as well as consumers. Rapid surges in demand, supply chain disruptions affecting global supply, the shutdown of physical stores, and concerns about employee safety were among the many challenges faced by most retailers. 

Retailers must adapt and evolve in tandem with the changing customer journey. To establish new and innovative business models, organizations must look beyond a single technology, and shift toward personalized shopping thus accelerating their digital transformation. The provenance of goods sold, weeding out counterfeits, the prevention of cyber-attacks, efficient inventory management, and supply chain optimization are some of the critical areas where technologies like Blockchain can play a major role.

The global blockchain market size is expected to grow from USD 3.0 billion in 2020 to USD 39.7 billion by 2025, at a phenomenal CAGR of 67.3% during 2020–2025. The blockchain in the retail market was valued at USD 113.72 million in 2020 and is expected to reach USD 1936.68 million by 2026, at a CAGR of 60.4% over the forecast period 2021 – 2026.

Although Blockchain technology adoption is still in the nascent stage across industries, we understand how it can be leveraged in conjunction with other functions to transform the retail and CPG industry in innovative ways and be the key to achieving the right balance between sustainability, reliability, and efficiency.

Some of the areas where the retail industry is facing challenges that Blockchain can help address are:

  • Fraudulent and Counterfeit Goods – The rising number of fraudulent operations and counterfeit goods tarnish the retail industry’s brand and internal fraud activities also impact the revenues leading to consumer dissatisfaction and losses for the business as well. 

Companies can provide product provenance from the consumer’s perspective, as the user can trace or monitor the complete supply chain of a single product, ensuring authenticity. IoT sensors can provide data about products at each step of the retail supply chain process, while blockchain can aid in the storage of permanent records, allowing thefts to be detected at any moment. 

  • Cyber Hacks – Most retail businesses employ a traditional client-server networking model, which is extremely vulnerable to data manipulation and major security breaches 

Companies can use blockchain in retail operations to secure client data in order to avoid the risk of data breaches. They provide authentication mechanisms in the system and keep all data in an immutable database.  

  • Poor Inventory Management – With the increased demands and complexity of stock-keeping unit management and local data storage, executing sales forecasting has grown more difficult. 

Retail operational data can be stored on the blockchain. Blockchain’s capacity to provide traceability can improve inventory management efficiency by easy tracking of product availability.

  • Changing Consumer Expectations – Consumer expectations appear to shift at a rapid pace considering seasonal changes in customer tastes, special occasions, holidays, and trends, necessitating the retail industry’s ability to grasp and provide accurate estimates from this data. 

Users may redeem loyalty programs, points across numerous channels and platforms using a blockchain-based application, minimizing liabilities, and improving customer satisfaction. It also lowers operating costs and the likelihood of fraud. 

In conclusion, is the retail business going to be disrupted by blockchain? Absolutely!

In the age of shopping from home, fast transactions, reliable services, and verifiable delivery tracking without manual intervention have become must-haves for mobile and online e-commerce. 

Blockchain offers an exciting opportunity to develop a decentralized, secure network of data about the products we buy that is fully accessible to all stakeholders. Blockchain is a system that promotes loyalty by encouraging more real interactions between customers and businesses.

Blockchain connects with your existing systems to provide real-time data, allowing you to better understand your consumers and complete transactions faster. Out of all the technologies available, blockchain offers the most long-term benefits, such as cost savings and transparent retail supply chain management.

Companies that embrace blockchain as a technology will lead the way as it develops and matures, and over the next few years, this will become the norm. Western Europe and the United States are at the forefront of blockchain technology, with Walmart already implementing it in their food supply management to reduce waste, increase efficiency, and improve traceability. Alibaba is using blockchain to improve the traceability of its products and has also built a cross-border e-commerce platform based on blockchain. Brillio offers a wide range of expertise in Blockchain consulting, Blockchain Rapid Prototyping, Development & Testing providing industry-specific solutions. Our Blockchain use cases are engineered to solve complex challenges with a focus on advanced and emerging technologies to build futuristic solutions.

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