Brick-and-mortar stores are still lagging in adopting Blockchain technology. Additionally, Blockchain technology has been the foundation of cryptocurrencies like Bitcoin. However, over the past few years, there has been a change in perspective as more and more businesses have begun to see the potential of this technology.
This shift results from the more significant digital revolution that is occurring throughout the retail industry. Therefore, you can say that Blockchain is essential to the future of retail as it quietly works away in the background.
Blockchain offers a mechanism to establish trust between merchants, payment gateways, and customers while enhancing transparency, credibility, and confidence in various business activities. As more consumer transactions are being conducted online, increased trust can only help the retail sector.
In this article, let’s have a look at the impact of Blockchain technology on the retail industry.
Before we delve into the advantages of Blockchain in the retail industry, let’s have a quick overview of Blockchain.
Blockchain: An overview
Blockchain fundamentally functions as a distributed database that a network of computers can access (distributed ledger). Once a record is added to the block, it becomes immutable (ledger). The network nodes routinely check for the most recent release of the Blockchain To ensure that every copy of the database is the exact same.
Blockchain focuses on decentralized Peer-to-Peer (P2P) transactions (including money or digital assets) that are not under the authority of a single centralized organization. The database is transparent and maintains a thorough record of every transaction. Complex cryptographic protocols are used to safeguard Blockchains, and only public and private keys may be used to access them.
Impact of Blockchain technology on the retail industry
- Maintaining product quality
The use of Blockchain technology has clear implications for determining a product’s origin, authenticity, and state. Let’s take an example, the Internet of Things (IoT) enables sensors to monitor perishable items and store temperature data on a secure digital ledger.
This technology allows retailers to recall items and address supply chain problems.
The annual cost of fraud to the world economy is estimated to be $5.38 trillion. The advantages of an impermeable digital information ledger are clear in this situation. For instance, businesses may use the Blockchain to ensure that invoices don’t change hands between suppliers and buyers to prevent procurement fraud. In addition, fraud is partially reduced because all parties must confirm transactions.
Retailers can ensure the authenticity of products when they are monitored on the Blockchain since counterfeit goods would not have this history of verification. But, of course, for Blockchain to perform this function, maintaining the accuracy of the data recorded into the ledger is necessary.
As organizations continue to gather customer data in more significant quantities than before, they are required to manage them properly.
Decentralized Identity (DID), which allows people to maintain their personal information outside of corporate systems, is made possible by Blockchain technology. DID enables the data to be saved on the Blockchain along with any links pointing to it, making it possible to verify user identification and data as necessary.
Using a DID instead of an email address makes it less likely that someone would trace a user’s web behavior and put together the information entered on several websites to create a comprehensive picture of the person.
- More effective payment systems
Since the mainstream has formally embraced cryptocurrencies, retailers who do not accept them might profit from changing their payment methods. The organizations that are payment service providers let their customers purchase and send money using a variety of digital currencies, while other firms are also enabling similar transactions through their platforms.
Blockchain, however, is relevant to payments in areas more than only cryptocurrency. For example, it can reduce the cost of maintaining the infrastructure for financial services by eliminating the requirement for authentication overheads.
In the retail sector, efficient inventory management is essential. Among other advantages, better control lowers inventory costs, enhances order fulfillment and customer happiness, simplifies supply chain management, and boosts forecasts and profit margins.
Giving inventory units, orders, and bills of lading—as well as the supply chain stakeholders that work with those assets—individual Blockchain identifiers provide unalterable visibility into every stage of the supply chain.
Many parts of the retail industry might be altered by Blockchain technology. This industry still deals with a number of concerns that have the potential to become problems in the future, even though it is now highly potent on its own. However, this sector can address all its issues and add additional customer advantages by employing Blockchain.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn’t represent any investment advice or WazirX’s official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.