A blockchain is a list of records which is designed to prevent modification of data. Having grown in popularity in recent years, the retail industry continues to adopt this technology in business strategies.
In short, a blockchain is a database of information. Also referred to as ‘distributed ledger technology’, or DLT, it is not stored in one central location, instead having copies across numerous data servers. Each ‘block’ is a record which is linked using cryptography. Every block contains a timestamp and transaction data for the previous block. Identities are kept private, however all blockchain transactions are visible to all parties. This system means that data cannot be disputed, removed or edited without the knowledge and permission of the person who entered the record, as well as the wider community. Overall, blockchain creates a more reliable and transparent system of data storage for supply chains.
How can blockchain benefit retailers?
Blockchain creates easily accessible supply chain data and works to grow trust. The information can take any form, from recording money transfers and sales records, to detailing the journey of a product. Minimising the risk of insider threats, blockchain can also be used to assist customer loyalty programmes.
Retailers can keep track of the origin of stock, as well as giving confidence in manufacturing dates and supply chain details. Through this, retailers are able to avoid working with unethical or unreliable suppliers, preventing the purchase of poor quality products and counterfeits.
Louise Garvin, Head of Projects at Provenance, said: “We live in the age of information, and yet continue to be disconnected from the journeys that our products go through. A new digitally-savvy shopper has emerged, demanding more information about their products.
“Blockchain presents an exciting opportunity to create a decentralised, secure network of data about the things we buy that is open and accessible to everyone. When it comes to the application of blockchain in the retail industry, there is a need to accurately reflect the different steps in the supply chain and the transfers of ownership and product transformations at each stage. The retailer would be the final step in the supply chain. With transparency enabled through technology, shoppers gain access to trustworthy data direct from the product and benefit from knowing claims are genuine, whether shopping online of instore.”
Who is using blockchain?
Since its rise in popularity in 2015, the list of retailers using blockchain has continued to grow. Amazon are one of the most influential retail companies who utilise this, launching their own service on Amazon Web Services. The retail technology company made it simple to establish and manage blockchain networks with open-source frameworks.
Walmart is another large-scale example, implementing blockchain technology to manage their food safety. As a result of this, suppliers of vegetables are required to input data on their products to a ledger by September 2019.
Many of the world’s most successful retailers are already making the most of blockchain, but it shouldn’t be limited to only the best-known brands.
Croydon-based fruit crisp manufacturer, LioBites have revolutionised their processes using blockchain technology. The company’s Director, Anna Oldbury, said: “Quality of the ingredients and traceability was my number one priority. It is much easier to control the sources and origin of the produce for smaller brands than for large conglomerates with multiple lines and large supply chains.
“Large retailers need to adapt, as customers are becoming more interested in the origin of the products – seeking reassurance that the food is produced using sustainable methods and the garments they buy are not manufactured in a factory using child labour. Adapting blockchain technology will allow transparency and traceability – giving customers choices and confidence in retailers they can trust.”
Blockchain is set to disrupt the retail industry, giving consumers more information and choices than ever before when it comes to the sourcing and creation of products.
Click here to see four innovative uses for blockchain in retail.