The advent of the digital age has pushed the service providers to reinvent new ways to serve the consumers. The digital tsunami is poised to fundamentally alter the ways of doing business and create immediate opportunities for new innovations to flourish. The Blockchain is so much more than just a technology. It is a revolution enveloping the financial sector and quietly making inroads into every vital sector of the economy. From logistics to public service to voting, Blockchain wave is already heading towards transforming every part of our economy including the Consumer Package Goods (CPG) and retail industry.
Blockchain integration across Consumer Packaged Goods (CPG) and retail industry would impact on the consumer, the retail supply chain, payments and contracts. Though the developments are still in their early phase, Blockchain appears destined to restructure operating models across the CPG and retail industry. This technology promises the emergence of consolidate and optimal retail application of tomorrow, guaranteeing a more transparent and trustworthy scenario. Steve Lark, the technology consulting partner at Deloitte, stated in the report by Deloitte, “Blockchain has the ability to track, trace, and authenticate products, record contracts, and transactions and guarantee the movement of information.” The Deloitte report adds to the evidence that the ‘age of Blockchain’ in the CPG and retail industry is not much far. Let us see what all problems can Blockchain solve in the CPG and retail industry:
The impact of Blockchain on CPG and retail industry
Blockchain being a digital, decentralized, distributed ledger offers many promising applications across the retail and CPG value chains. These applications would ultimately resolve a number of business issues.
Improved supply chain efficiency: A Blockchain-enabled supply chain would be fully integrated. It will enable merchants to order and trace shipments of goods in real-time and also monitor the parties involved. A Blockchain-based ledger is a verifiable record in real-time which makes it easier to prove the authenticity, provenance, and history of the goods. Therefore, it will be restoring trust in the CPG and retail industry which is presently plagued by counterfeiting of goods.
Smarter Blockchain-based transactions: The integration of Blockchain in CPG and retail industry would make consumer payments much faster and cost-efficient. It is because it eliminates the involvement of Banks and intermediaries. Coinbase, a Bitcoin exchange, deployed a fully-functional WooCommerce plugin that enables merchants to accept cryptocurrency transactions online.
B2B payments and securing supply chain data: Blockchain enables B2B agreement between parties through the use of smart contracts which increases transparency into the system, improves the speed of payment processing and reduces intermediary expenses. A cryptographically-secured Blockchain ledger is the most secure record maintaining technology of the present time. Any record like purchases, warranties, ownership status etc can be safely verified and transferred on a Blockchain network, thus improving supply chain visibility.
Increasing customer participation: Blockchain can act as a key for improving and protecting the user experience. A secure and transparent Blockchain-enabled voting system for consumer surveys and competitions would engage customers and help industries to establish trust in their brands. Blockchain can also be used in recording and storing consumer behavior data which can be used by companies for improved market targeting and incentivizing customers for loyalty.
Transparent digital advertising via Blockchain: Over the years, we have witnessed several allegations like lack of transparency and the prevalence of bots to influence audience behavior against digital advertising space. Blockchain with its inherent features can protect sensitive audience data through a decentralized database and achieve trust and transparency by keeping a verifiable and immutable record of advertising data. Blockchain can be handy in reducing ad fraud in the CPG and retail industry by creating and storing an audit trail between brands and consumers.
A Blockchain-enabled sharing economy: The future holds a sharing economy where industries optimize cost and efficiency by sharing manufacturing resources and hiring capacity rather than purchasing expensive resources. A Blockchain-enabled platform would help companies to create a decentralized database to track their goods, equipment, and materials being shared.
Though in its nascent stage, Blockchain promises a brighter and accountable future for CPG and retail industry. Retailers have to step up and figure out how Blockchain can benefit their organization to stay relevant and in competition. After all the CPG and retail industry is all about evolving according to consumer behavior!