Everybody is talking about blockchain these days, some are even referring to it as the next disruptive technology that will change the retail industry. The impact of blockchain on the financial services is well known. The use of cryptocurrencies has dominated the news even though many don’t understand the technology behind it. Increasingly, the use of blockchain technology outside of the financial services is also becoming more frequent and prominent, especially in sectors such as healthcare, manufacturing and logistics.
At a recent event hosted by British Chamber of Commerce in Hong Kong, there was discussions on the application of blockchain technology in the retail industry. The global blockchain in retail market size was valued at $44 million USD in 2017 and is projected to grow to $2.3 billion USD by 2023. The speaker, Daniel Kwong – Chief Technology & Innovation Officer (CITIC Telecom), described how blockchain enhances the retail supply-chain network process, overcoming the traditional pain points of traceability, compliance, flexibility and stakeholder management.
How blockchain can benefit retailers
- Increase in transparency and consumer confidence
- Speed up delivery and enable smoother logistics
- Guarantee authenticity and reduce counterfeits
- Auditability – provide full audit trail of data within the supply chain
- Immutability – all transactions are date/time stamped and tamper-proof
- Smart Contracts – real-time tracking of data
- Disintermediation – enable peer-to-peer interactions based on digital signatures
Use cases for retail
Walmart is using blockchain in China for collecting information on pork. Workers in the pork farms scan images of farm inspection reports and health certificates, which are then stored in the blockchain. Delivery drivers upload photograph shipping documents. Consumers can then scan a unique code applied to the packaging in order to retrieve all details relating to that specific item.
Chow Tai Fook Jewelry collaborates with the GIA (Gemological Institute of America), to deliver digital diamond grading reports so that no physical certificate is required. Information written directly into the blockchain includes items such as; the source, the supplier, the cutting and the polishing. Consumers can then receive reports about each diamond directly to their smartphone.
How secure is blockchain?
Blockchain technology is still in an early phase but there is lot of potential as it starts to develop trust within the retail supply chain industry. The records on a blockchain are secured through cryptography, network participants have their own private keys that are assigned to the transactions they make and act as a personal digital signature. If a record is altered, the signature will become invalid and the peer network will be notified, early notification is crucial to preventing further damage. With these capabilities, your blockchain network will have the added protection it needs to prevent attacks. However blockchain is still as vulnerable as traditional networks to the actions of the people that use it, if a user loses or has their password stolen then the blockchain could become compromised.
Let’s embrace blockchain for shaping the future of retail and invest some time and resources to explore opportunities and scenarios for your organisation.