Blockchain in retail: The transfer of trust in a trustless world
The issue of trust is impacting every sector across Australia today. As the world moves faster into the future, organisations are experiencing how easy it is to lose the trust of the consumer and the difficulties in re-establishing that trust.
The retail industry is no exception to this trust trend.
Consumer trust is steadily being eroded by the rise of e-commerce, which has challenged retailers and the consumer good industry with additional pain points such as security and complex processes for payments and shipping. And online shopping continues to add pressure, Amazon recently launching Prime, its subscription-based free delivery service in Australia.
So how do retailers regain the trust of the Australian consumer? How do they grow customer loyalty and reinvigorate their engagement?
Described as a ‘transfer of trust in a trustless world’, the deployment of blockchain in retail is steadily growing due to its ability to promote product transparency and increase consumer loyalty and engagement. Here are some use cases.
International Shipment of Goods
The increasing pressure to offer faster delivery times has challenged retailer, distributors and shipping services in their ability to track and trace items.
Blockchain builds consumer trust and eradicates labour-intensive documentation. As well as providing digital consensus, consistency and accurate records for all stakeholders.
Alibaba’s latest trial of a new supply chain network with Australia Post and Blackmores is an example of this as blockchain is being used to track food products in Australia from producer to consumer.
This allows everyone in the supply chain, including consumers, the ability to validate that the goods received are authentic.
Similarly, Accenture together with a consortium comprising of AB InBev, APL, Kuehne + Nagel and a European customs organisation have successfully tested a blockchain solution that can eliminate the need for printed shipping documents and save the freight and logistics industry hundreds of millions of dollars annually.
The lack of transparency of products in online shopping is a pain point for many consumers.
With the rise of e-commerce comes a rise in consumers’ desire to know the origin of the product to ensure what they are purchasing is authentic, whether that be branded, organic, truly Fairtrade or locally sourced.
Through blockchain technology it is now possible to provide consumers with this guarantee by obtaining data from all parties involved, from the supplier and manufacturer to the retailer and end consumer, it is possible to trace a product’s journey.
This is particularly crucial within the pharmaceutical sector, where using blockchain technology, Accenture and DHL have created a prototype pharmaceutical track and trace platform, capable of keeping counterfeit medicines out of the supply chain.
The technology tracks pharmaceuticals from the point of origin to the consumer, preventing tampering and errors.
Blockchain technology can help retailers provide shopping solutions that have not yet been resolved or updated, using new technologies. Consumer warranty is one example of a system that has largely remained the same for decades.
Many consumers are now looking to securely save information about their products beyond storing fading physical receipts.
A growing number of consumer-focused companies are already using Warranteer, a service that allows users to smoothly transfer product warranties from paper onto the cloud via blockchain, keeping them up-to-date and easily transferable.
Consumers can maintain a virtual warranty wallet, saving retailers and manufacturers administrative work and allowing consumers to see the full value of a product, brand and warranty.
Maintaining customer loyalty
Blockchain technologies are starting to impact the future of loyalty and customer relationship management.
The potential of blockchain technology to streamline transactions between retailers to facilitate trust is enormous. Ultimately driving greater customer experience by increasing transparency and removing unnecessary intermediaries between retailers and the customer.
With its indisputable version of the truth, blockchain can be used as a competitive advantage. And with developments across both consumer and business applications now is the time for all retailers to capitalise on the technology.
Glenn Heppell leads the Accenture’s retail practice within Australia and New Zealand and Michelle Grujin is a senior manager within the local retail team.