Blockchain & Retail
There several situations conceivable blockchain could play a major role. This also counts for the retail industry. Retail could profit from the various advantages that blockchain brings if they start using it for their industry. Let’s take a look at how blockchain
can play a role in the industry of retails and what the advantages would be.
More transparency because of blockchain
There are several advantages when blockchain is used in retail industry. The first advantage is there will be more transparency about products. This makes it able for sellers to show their customers where and how their products are made. Consumers can then be sure they are not buying clothes made by children, for example. They will also know sure that cotton farmers have received a fair price for the cotton, as all this information can be stored in the blockchain.
It’s very hard to know whether a product is sustainable or not nowadays. Sellers don’t always tell where their products come from, as they simply don’t know. This is because each part of a product is often made in a different country.
Let’s take jeans as an example. The cotton may come from Indonesia, after which the cotton is processed in India. The cotton then will be converted into jeans in a factory in Myanmar. The jeans are then sent to Bangladesh to assemble all parts together. Once the jeans are ready, they are shipped to a distribution centre in Germany and then are shipped to the store in Amsterdam. How will the store employee be able to know where and by whom these jeans were made?
Each step of the process can be stored in the blockchain. As the data in the blockchain cannot be edited, fabricants and sellers cannot lie about the origin any more. Everyone can see the origin of the parts in the blockchain.
No more fake products
Another advantage is that blockchain allows you to know for sure whether a product is real or fake. If you want to buy a sweater of Gucci in a store or on a second-used marketplace, it will always be tricky if what you buy is real. Blockchain will make sure if this sweater is really made by Gucci or is just a fake duplication.
You may wonder how consumers can be sure that the product they see is also the product that is showed in the blockchain. A brand will produce millions of the same pant, right? This can be done by non-fungible tokens (NFTs
). These kinds of tokens contain a unique value, such as an ID number. Jeans could be separated from each other by the ID-number that’s on them. This will make it sure that you have the same jeans in your hands.
Blockchain will make products authentic
The same NFTs we talked about can also increase the value of a product. This is because NFTs will make products unique. Consumers will be able to see what version they bought. As an example: a fan of Apple would pay a lot of money for the first version of the new MacBook Pro that just got sold in stores.
Blockchain will also make consumers able to make healthier and sustainable choice when they are buying food in supermarkets. As a consumer, you will be able to see where a chicken has lived and whether this chicken has had a good life. Nowadays this is always hidden because supermarkets and manufacturers do not want to say much about the life their animals have had.
You will be able to make a healthier choice because it is much clearer where products come from and what happened to them. Also, restaurants will be able to provide information about where the ingredients they use come from.
Are some retailers using blockchain already?
You will probably ask yourself if there are already some retailers that are using blockchain. Some of them do, like Luxarity; a partnership between Lane Crawford Joyce Group and ConsenSys that aims to recycle luxury goods and educate consumers about sustainable consumption.
Though blockchain is not only used for fashion, also some food retailers use blockchain. This is done by Verified Organic in collaboration with ConsenSyc. Verified Organic is a blockchain application (dApp) that shows more transparency and responsibility in the industry of organic food production. This makes it possible for consumers to see clearly how organic and sustainable the food is they want to buy.
There are lots of situations thinkable where blockchain could play a big role in the retail industry. As well as the producer as the seller as the consumer will profit from the advantages. Some retailers already profit from blockchain, like Luxarity and Verified Organic. However, this is still done on only a small scale.
We have to wait until blockchain will actually play a major role in the retail industry. The technology and the plans are already there, but now we have to wait until it is actually rolled out on a large scale.