The retail industry is continually being reshaped by innovative and emerging technologies. Take, for example, the trend of Conversational Commerce and smart digital stores. Over the past few years, new solutions, such as Capgemini’s smart digital store and personal voice assistant (PVA) SACha, have emerged by leveraging these new technologies to enhance customer experience. The power of cloud, artificial intelligence, machine learning, natural language processing, blockchain and voice recognition has uncovered new solutions that are enhancing the customer experience. Blockchain, in particular, has great potential to disrupt supply chain operations in the retail industry.
What is blockchain?
Blockchain is a secure and resilient mechanism that allows for peer-to-peer transfer of anything of value without the need for an intermediary. It does that through three key features: a peer-to-peer network for conducting transactions, a distributed, immutable ledger for recording and viewing those transactions, and a consensus mechanism for validating those transactions while detecting fraudulent and false transactions. Together, these elements create a stable, tamper-proof, intermediary-less environment for parties to transact with one another in a trusted manner.
In the retail context, this immutable, shared ledger acts as a trust layer that allows retailers and their supply chain trade partners to have a “one source of truth” level of visibility, traceability, and transparency in the retailer’s supply chain.
The conscientious customer in retail
In the era of the conscientious customer, customers increasingly care about the origin of their products and transparency in business supply chains is becoming a corporate norm. From private stakeholders to government entities, conscientious customers are inquiring about the systems and sources handling retail goods. Concerns about quality, safety, ethics, and environmental impact have become essential features for many products and transactions. Blockchain technology can be used to increase transparency in supply chains and help track the provenance of goods.
Wal-Mart is one of the first retailers to plan an international implementation of blockchain as it looks to impose better tracking of its pork and produce transactions in China.
As Frank Yiannas, vice president, Food Safety at Walmart says, “blockchain technology enables a new era of end-to-end transparency in the global food system. It allows all participants to share information rapidly and with confidence across a strong trusted network. This is critical to ensuring that the global food system remains safe for all.”
Blockchain can help conscientious customers’ growing demands for traceability and authenticity are not receiving adequate answers in the traditional supply chain. Product theft and counterfeiting takes time to investigate down to the point of occurrence. According to a recent Capgemini report, blockchain can help companies such as retailers improve the supply chain in three areas:
- How retailers believe blockchain can help them improve their supply chain;
- In which way retailers currently use the technology in their operation;
- How retailers envision the best practices for an efficient blockchain program.
Another use case of blockchain technology in the retail industry is in the resale market. Blockchain technology could provide retailers with an auditable and verifiable record of their goods and products, from raw material to final product, to second-hand resale. A common concern with resale products involves counterfeit products. Blockchain’s traceability can help retailers identify potential trademark violations.
With this newfound level of transparency from implementing a blockchain in its supply chain, retailers can potentially charge more for their products. Consumers may even be willing to pay a premium for companies who commit to sustainable, positive social and environmental impact. Having an immutable system of record that records a product’s history from the time it was originally created to final product can potentially eradicate retail industry’s challenges such as counterfeiting.
In summary, supply chains in retail have become increasingly complex over the years. Blockchain can help deliver trust and value which can potentially create new opportunities for retailers. Download the latest Capgemini report to learn more.