During its formative years, blockchain technology became synonymous with the rise of cryptocurrency. Today, the use cases have transcended the world of finance, expanding into sectors such as retail.
In Africa, its application in payment technology has demonstrated blockchain’s ability to revolutionize multiple touchpoints from supply chain to final sale. This development heralds good news for the rapidly developing continent.
This was one of the key points that emerged from a recent address in South Africa by international blockchain visionary and technology expert, Don Tapscott.
His talk was part of a recent business series facilitated by the Blockchain Research Institute and Standard Bank and was aimed at providing global insights and forecasts for the retail and insurance industries. The Cape Town event was organized by consumer credit firm RCS and Level Up, a business incubator that aims to support emerging technologies and companies.
Commenting on the key takeaways from Tapscott’s address, RCS Chief Commercial Officer Gavin Lomberg expressed his belief that “blockchain will provide the rails for Africa’s ‘innovation economy’. In a short space of time, we have seen how more retailers have used blockchain to expand their reach; and in addition, introducing new levels of efficiency in their operations.
“As part of the financial sector, we have found great value in using data at scale to make retail safer, easier and more convenient. We therefore look forward to exploring ways to enhance our capabilities using blockchain technology.”
Rapid advances in payment technology
Nowhere has the impact of blockchain technology been more visible than in Nigeria, which has seen the proliferation of payment technology startups in recent years. A key example of this is the Nigerian start-up, Lazerpay. This blockchain-powered solution allows businesses to accept payments from anywhere in the world, using “stablecoins”.
The growing use of this technology is an encouraging prospect for the millions of small businesses that drive economic growth on the continent.
Loyalty program effectiveness
The success of blockchain in Nigeria served as a feature in a discussion about how the technology can benefit retail in Africa. Expanding on this theme, Tapscott touched on how blockchain could optimize loyalty programs. Currently, he explained, retailers run their own loyalty schemes, many of which are paper-based and full of inefficiencies.
Powered by blockchain, retailers will have the ability to allow customers to transfer their earned rewards into fungible tokens that can be used across multiple brands and product lines. The system will also enable cross-brand bundle offers, allowing retailers to expand their reach and offer customers more value and convenience.
Product traceability and provenance
With the global call for sustainability increasing, as well as the need to combat realities such as climate change becoming more urgent, the traceability of goods is becoming increasingly important. The answer to these calls lies in better data management powered by blockchain, which can bring an unprecedented level of transparency to supply chains.
Blockchain technology supports the development of secure data ecosystems that can be used to label and track almost any type of product. This “fingerprint” can also be used to verify the legitimacy of the products. This will have a significant impact on the retail trade, empowering brands to combat counterfeit trade. In Africa, innovations like these could be particularly important in curbing the trade in conflict diamonds.
Streamlined supply chains
Furthermore, blockchain as a tool for inventory management will provide a streamlined solution that will connect all parties along Africa’s vast supply chains. From inventory tracking and delivery to the administrative functions of tax and customs authorities, access to a single, shared ledger or “point of truth” will eliminate many of the existing inefficiencies in the value chain.
Management of customer identity
Another benefit that blockchain technology will bring to African retailers is more secure customer identity management. Currently, many retailers rely on outdated customer relationship systems. These are powered by legacy technology such as email to track sales, collect data and inform marketing strategies.
However, blockchain technology is a powerful enabler of the decentralized identifier (DID) or sovereign identity. A component that enables secure storage and distribution of specific customer data. Access to this data will provide retailers with valuable insight into consumer behaviour, spending habits and product preferences.
Retailers will enjoy this access in a way that does not violate privacy laws and allows reliable exchange of data. As Tapscott argues: “Digital identities will prevent big data aggregators from getting to know you better than you know yourself.”
In Africa, where cybercrime is on the rise, these developments are important building blocks for creating a better sector.
Concluding his perspective on the future of retail, Lomberg asserts that: “Blockchain technology will provide the tools to build a safer, consumer-first retail landscape. Going forward, regulators will play a key role in creating an enabling environment for commerce in a data-driven economy.
“As such, the next few years will undoubtedly mark a turning point for the continent as we look to recreate a more inclusive and accessible retail.”
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