Blockchain is reinventing retail

Aug 13, 2019

It is not today that the retailer looks closely at the blockchain's ability to transform the market. But where does this network of transactions between two or more partners really help? Much of the industry has been working to understand how best to harness this new technology.

There are two major points that are critical part of the retail ecosystem that, from the blockchain, may have their characteristics altered - and improved.

Traceability of the supply chain: we have consumers increasingly concerned about the origin of the products they consume, and in counterpoint a high in the rates of falsification of products from various markets. With the blockchain, it is possible to trace the entire path a product travels through its production chain, ensuring security and authenticity. Here, in addition to the reduction of costs, there is an expressive gain in value and loyalty, as in the case, for example, of organic foods.

Security of direct transactions: the use of technology will increase the efficiency of direct transactions between partners, eliminating the need for intermediaries, such as banks. So-called smart contracts, coming from the blockchain, are capable of cataloging and conducting transactions through a peer-to-peer network, which replaces the traditional role generally fulfilled by financial institutions. These transactions then become automated and simplified, bringing more efficiency, agility and significant error reduction.

Most retail organizations - as in other markets - are still reluctant to see the advances and results of technology to invest in. But I believe that the sooner retailers get into this game by identifying and designing blockchain pilots, the sooner they will see a positive effect on their operations. Retailers who move quickly to understand how technology can benefit their organization by developing the skills they need will have an edge over their competitors by restructuring the hypercompetitive retail landscape.

It is important to note that in this transformation process we should avoid standard IT projects - slow to implement and slow to meet expectations. Instead, a more agile approach is needed to keep pace with blockchain, which can be summarized as starting small, testing, and eventually crashing soon, identifying what worked, re-adjusting, and validating adjusted processes quickly.

It will be necessary, of course, to rewrite the rules of the market. The challenges of finding two or more partners / suppliers interested and ready to deploy the blockchain, the need for investment in technology and the urgent change in the mentality of retailers. The bet is that this technology will be able to restructure operational models, improve their efficiency and reduce costs.



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