Four Use Cases of Blockchain Technology in Retail — Retail Technology Innovation Hub

Improvement of traceability

One of the biggest challenges in retail is the need for a proper traceability system.

As businesses use different platforms for data sharing, the lack of functionality of these processes usually leads to more complications and failures in the overview of the suppliers’ practices. And while barcode systems have proven unreliable, blockchain technology can eliminate these limits through decentralization.

An effective blockchain-based tracking system is best with smart tags, which can be used in the following ways:

● As QR codes that almost all modern smartphones and tablets can read;

● RFID (radio frequency identification) tags require a specific device to emit radio waves and receive a signal back; these codes can scan tags at a distance of up to one kilometer;

● NFC (near field communication) chips are similar to RFID but do not have the same wide range of applications;

Tracking a product can be done by assigning it a smart tag that symbolizes it, making it easy to find. The participants in the blockchain have unique identifiers through which they sign transactions.

Combating counterfeiting

The next problem in retail is counterfeiting, which, although classified as a crime, happens all the time. Fraudulently imitating a product without the original company’s permission leads to significant loss of revenue and even loss of jobs over time.

Moreover, counterfeiting greatly affects customers as they receive low-quality products and services.

The use of blockchain technology can improve this incidence by identifying the product’s proof of origin.

This protocol provides proof that the goods were produced in the issuing country or company, tracks all processes from the extraction of raw materials to the product’s shipment and provides enough visibility throughout the supply chain.

The FDA has already recognized protecting businesses through blockchain technology in the New Era of Smarter Food Safety Blueprint” where foodborne illness outbreaks will be minimized through blockchain and AI processes.

Food safety assurance

Food safety is another problem that is challenging to control. Businesses have always struggled to prevent financial losses from spoiled food, which ends up in landfills.

But the biggest problem is that many people get sick from consuming these products since companies cannot always ensure that the food transported is still in good condition or transported in certified trucks.

A solution to eliminate this concern is to use IoT technology, which will work as a blockchain-based method, through the following process:

● An IoT sensor is installed in the place where the food is stored to measure the temperature;

● Employees receive an alert on their devices when temperatures reach freezing temperatures;

● Employees can solve the problem quickly by changing the temperature inside, based on the guidelines;

● At the end of the procedure, the platform creates a problem report and registers it on the blockchain;

Such a strategy will be able to regain customers’ trust in the company as it provides the best products and they can learn about the food’s source by scanning it as a QR code.

At the same time, through blockchain technology, it is easier to find out where exactly a problem occurred, so that companies can predict when the quality of food is expected to decrease in order to take appropriate measures.

Improving loyalty programs

Loyalty programs are always an excellent way to gain customer trust and increase customer retention. It also helps companies to expand and improve their brand image.

Unfortunately, most of these programs lack proper organization, which is why people avoid them. With blockchain implementation, companies can set up some of the best loyalty programs through:

● E-wallets to redeem people’s loyalty rewards;

● Launching offers aimed at specific target groups;

● Increase the liquidity of loyalty points;

● Provide trackable and impossible-to-fake loyalty points;

A company can create a decentralized system to allow customers to use their loyalty points to spend their rewards across multiple brand and retail segments. In this way, all network participants can interact and keep their privacy intact.

Real-life examples of a blockchain approach in retail

Retail blockchain solutions are already being approached by large companies open to new opportunities, such as the following:

● Walmart uses blockchain to solve problems regarding logistics and transportation since the company needs to manage huge amounts of invoices and payments. Since 2021, Walmart has partnered with a developer of an enterprise company that helps make all data recorded in the blockchain immutable;

● De Beers provides the authenticity of its end products and source materials used in the production of luxury goods and jewelery through blockchain solutions;

● American Express partnered with a company to create a blockchain-based system that would allow merchants to create special loyalty programs for customers with American Express cardholders;

● Carrefour started using blockchain technology in 2021 to track some exclusive textile products. Their customers can scan a QR code to find out more about their product, form the producer’s name to the place of cultivation;

The bottom line

Retail has greatly benefited from blockchain technology.

This method allows a customer to fully trust the business and also provides best practices for tracking the transportation of products, eliminating human error. Therefore, the retail trade can save the costs that are otherwise lost and improve its strategies to offer qualitative services and products.