The retail industry will reach a “tipping point” within the next five years that will see blockchain heavily tested across use cases, which will lead to significant adoption of the technology, according to a report from Deloitte.
The report suggests that businesses that quickly determine what value blockchain holds for them, and begin testing it soon, stand to benefit greatly while others will miss out and fall behind. For context, blockchain is an immutable ledger that creates a shared, distributed record of transactions.
Blockchain may be able to help retailers improve their consumer experience and supply chain operations in an increasingly digital world.
Consumer experience: Blockchain can help keep track of consumer data by storing and validating it, and through the use ofsmart contract logic, which is designed to trigger actions when certain requirements are met, it could dispatch promotions to consumers through a loyalty program or otherwise.
Considering that real-time rewards from Premium Payback by FIS boosted spending by 25%, according to Colloquy, the automatic distribution of discounts, points programs, and other offers via blockchain could encourage customers to take advantage of these offerings, in turn benefiting retailers and potentially growing loyalty.
Supply chain: A blockchain solution can enable retailers to trace goods throughout the entire distribution and fulfillment process, allowing businesses to make sure products are where they’re supposed to be, and collect data on the whole process to improve going forward.
This could help facilitate initiatives like Target’s pilot distribution center, which is enabling the retailer to replenish store shelves and fulfill online orders with the same inventory while making smaller, more frequent deliveries to meet demand, because blockchain can help it keep track of all of its many moving parts across channels.
Some companies are already looking into blockchain’s retail value to get a leg up on competitors. Online wholesaler Boxed is working with American Express to test blockchain-driven loyalty rewards, while Walmart has been looking to useblockchain in its food supply chain.
It remains to be seen if these initiatives will improve the retailers’ performances, but, even if they fail, it may be a valuable learning experience that will lead to better blockchain utilization going forward, potentially setting these companies up for success in the long run.