Although the retail shift had been going under for a while, it is inevitable that the transformation is accelerating worldwide even further and under massive pressure due to the pandemic. The story is no longer revolving around the story of brick-and-mortar to the new retail but taking online retail to another level with transparency and personalization. Therefore, new retail requires new resolutions. This is where blockchain development in retail comes to the rescue and makes everything easier for both businesses and customers.
1. From Online Retail to New Retail: Opportunities Outrule Challenges
Many businesses have been face-to-face with the COVID-19 crisis, as we all know, throughout the last year. And brick-and-mortar stores got most of the hit. Nasdaq stated that 8,741 stores across the United States closed their doors, and only 3,300 managed to open anew in 2020. For the same period, more than 40 retailers have filed for bankruptcy. In this apocalypse of traditional retail, malls were also pressing on continuing their leasing business. Simon Property reported that it lost roughly 10,500 shopping days across all its properties on a combined basis during its fiscal second-quarter because of the crisis.
Despite the obstacles, eCommerce and other emerging technologies keeping customers safe in physical stores have sparked a light in the darkness for businesses. In 2020, over two billion people purchased goods or services online, and during the same year, e-retail sales surpassed 4.2 trillion U.S. dollars worldwide - Statista. For the US market, its eCommerce revenue also amounted to 431.6 billion U.S dollars last year.
The technology came in with many in-store solutions for brick-and-mortar retailers, enabling customers to shop effortlessly without making any physical contact with others. This shopping method is called click and collect, meaning simply clicking to buy online and then picking up the orders at the store. US shoppers spent $72.46 billion via click-and-collect last year, a 106.9% growth rate over 2019. Click and collect leaped from a 5.8% share of all retail eCommerce sales to a 9.1% share. Total buyers jumped from 127.4 million people to 143.8 million people, a 12.9% growth rate.
2. Blockchain Development in Retail is the Perfect Solution to Start Anew
The pandemic dragging on meaning customer’s ways of shopping is now changed and will be forever different. The new situation asks retailers to satisfy their customers not only offline or online but the two should be connected and synchronized everywhere at any time. Many parts of the fast and seamless experience required are now backed by various technologies, and blockchain is one of the superiors.
a. Track Inventory
ShipStation’s 2021 report indicates 96% of the interviewed agree that fast and honest updates regarding a shipping issue make them less likely to be upset about shipping delays or have a lasting negative perception of the brand. However, the current inventory management is based on the supply-and-demand methodology. Companies face a huge challenge in managing their supply chain network with this technique. There is a lack of visibility down the supply chain, which hinders the assessment of customer demand. These supply chains comprise multiple partners like suppliers, distribution centers, and retail partners. Each of these parties uses its own methods and systems for managing transactions and the movement of goods.
Blockchain helps each party involved in the supply chain to connect with the others. Communication between parties within the supply chain is streamlined, which minimizes errors across stages. Blockchain is also a decentralized ledger that provides complete security and transparency to all the transactions in the supply chain.
b. Prevent Fraud
Meanwhile, the European Union Intellectual Property Office (EUIPO) released a study stating that trade in counterfeit and pirated goods has risen steadily in the last few years – even as overall trade volumes stagnated – and now stands at 3.3% of global trade. This trend has been building up online shoppers’ doubt over what they purchase but can not really “touch” in advance. Then retail leaders are now using blockchain technology to prevent counterfeit items from reaching consumers since it was proven to successfully prevent fraudulent transactions in digital currency exchanges.
A UK company founded in 2014, Blockverify works with a product manufacturer to ensure the quality and the authenticity of the products they produce. The customers could browse through the origin of every single ingredient within the item, promoting transparency and let shoppers take the initiative to know about the products they used. Blockverify is planning to expand its range of products to reach the goal that all items in the world can be tracked with blockchain.
c. Manage Loyalty Points
U.S. Grocery Shopper Trends report found that the average shopper visited 4.4 different retail banners in a typical month in 2019. While shoppers spend a significant share of their food dollars at their primary store, very few spend all their grocery dollars at one retailer. In fact, only 13% of all shoppers are loyal to just one food retailer. The result is a maze of point systems and redemption options, with cumbersome processes for exchanging points among program partners. Loyalty programs are ripe for some kind of disruptive innovation that would make them easier to use.
This is where blockchain development in retail comes in as a solution. It allows businesses to trade through a loyalty engine with each other in a decentralized and trustless open protocol system. Blockchain helps to put all the reward earnings of a consumer to a decentralized ledger on the blockchain that can be created by any vendor who wishes to enroll a consumer in the loyalty engine or by the consumers themselves. In this way, loyalty points would be more easily transferable or tradable. From a business perspective, liabilities are cleared off the books more quickly, and program information would also be more accurate and more up-to-date.
d. Automate Repetitive Back Office Tasks
The Covid-19 pandemic has required more digitized transactions, including those which execute autonomously, unhindered by lockdowns and delays in the supply chain systems. Companies are now using blockchain “smart contracts” to handle the purchase and sale of their goods and services to ensure quicker payments and seamless transactions. Once a transaction has been confirmed, any attempt to alter an earlier entry in the ledger would affect all the subsequent blocks. Such a change would be immediately apparent to everyone on the network.
As for such secure and immediate advantage within a system, blockchain is open beyond just contracts. The technology can help improve employee efficiency and streamline HR processes. The team can get quicker and more accurate results since repetitive data-heavy tasks such as payroll are now digitized. The transformation would allow businesses to put more focus on more strategic work like expanding their sales network, investing more in their customer relationships, and many more.
3. Companies are Seeing Promising Progress with Blockchain
Blockchain in the retail industry is no more in fantasy papers. Several prominent giants have been the trailblazers in such adoptions. And the results have proven them rather right when putting trust in business transformation with blockchain.
Walmart has consistently been one of the retail sector's biggest trailblazers for blockchain development in retail. It is involved with several food safety initiatives, such as the Blockchain Food Safety Alliance, IBM's Food Trust, and the Walmart China Food Traceability Program. These initiatives have featured big names like IBM, Carrefour, JD.com, VeChain, and PwC.
In September 2018, Walmart announced a Food Trust Initiative, under which it has requested all its greens suppliers to upload data about their products on the blockchain and ensure end-to-end traceability by September 2019. It is likely that the company extends the use of this technology to other fresh foods and vegetable suppliers in the future.
IKEA Iceland has used Ethereum technology to settle an invoice with a local retailer, accepting payment in blockchain field digital cash. Supply chain payments firm Tradeshift facilitated the transfer using an Ethereum-based version of the Icelandic króna created by ConsenSys-backed startup Monerium. Monerium, based in Reykjavik, is a startup that has been authorized by the Icelandic Financial Supervisory Authority (FME) as the first electronic money institution, making it the first to have regulatory approval to provide fiat payment services on blockchain systems across Europe. This currency is not a cryptocurrency, but ‘real’ currency in electronic format, a digital alternative to cash, programmable in smart contracts.
“A programmable financial supply chain, where trading partners can connect information flows to money flows through smart contracts, will transform how suppliers and customers interact,” Stefán Árnason, CFO of IKEA Iceland, stated.
The world's largest online retailer posted a job offer on LinkedIn and reportedly is in need of a development engineer for the new advertisement blockchain. It has been very much saying that the position will be focusing on billing and reconciliation systems to provide transparency on trans-national financial data as the job description states, “This is an opportunity to define a technology architectural direction of a greenfield area for Amazon’s advertising business using Blockchain technology.”
The general idea is that a distributed ledger can get everyone on the same page about where advertising dollars are going and avoid discrepancies. This soon helps their vendors to see where their investment goes and which is working the best or worst, so they can optimize their advertising costs within the eCommerce system.
Overall, we do see that blockchain development in retail is beyond cryptocurrency. The potentiality is vast out there for retailers to adopt the technology and further optimize their performance on a vast scale. Many early adopters have proven it works, so your business no longer needs to risk the uncertainty.
And again, new retail requires new resolutions. Blockchain is that savior in this changing age for your retail company. Being one of the Top Blockchain Development Companies in the global market, SotaTek has proficient blockchain specialists possessing the ability to offer decentralized exchange development catered to any size of business. We believe in coming up with top-notch Outsource Blockchain Development Services that can offer our worldwide business clients a better future through efficient, safe, secure, and faster digital transactions. Contact us now and discover the bespoke solutions to transform your retail business performance with blockchain technology.