Consumer trust is hard earned and easily lost. In an era where more and more transactions are happening in the Internet ether, finding a way to further legitimize that trust is a godsend.
Blockchain offers promise in this area. A shared ledger where all financial transactions are recorded—eliminating the errors that can occur when each party participating in a transaction maintains its own data set for that transaction—blockchain has a growing following even in its nascency.
Despite the flurry of coverage around its implications for the financial industry, blockchain is not a one-trick pony. Providing the retail and consumer goods industries an opportunity for “trustless” transactions may sound counterintuitive, but in doing so it actually engenders consumer trust.
Read below for just a few of the areas in which blockchain is already moving the needle for retailers and manufacturers.
Transparency is of increasing importance to consumers. Provenance is a platform that helps brands provide that transparency by tracing the origins and histories of products. Consumers could trace the seafood they eat from boat to plate. Or, verify that the wool sweater they just bought came from sheep that are humanely treated. Blockchain underlies this transparency, allowing all parties—supplier, manufacturer, retailer and end consumer—to trace a product’s journey.
Reducing counterfeit goods
Counterfeit goods have plagued manufacturers and retailers for years. Block Verify is a blockchain-based anti-counterfeiting solution for pharmaceuticals, luxury items, diamonds, and electronics. Goods can be certified with blockchain’s digital ledger record, which mean that stolen merchandise can also be more easily recorded.
Think of the blockchain applications possible in emerging markets where customers may not bank or have access to reliable payment systems. A reliable payment and ledger system could help sales multiply exponentially.
A growing number of consumer-focused companies are already using Warranteer, a service that moves product warranties from paper onto the cloud via blockchain, keeping them up-to-date and easily transferable. Consumers are able to maintain a virtual warranty wallet, saving retailers and manufacturers administrative work.
Wave, still in testing, has targeted the global supply chain, hoping to modernize import Bills of Lading with blockchain. The company has created a peer-to-peer and completely decentralized network that connects all parties of the international trading supply chain. Using decentralized technologies, all communication between these parties will be direct, eliminating the need for them to pass through a specific central entity. Connecting all members of a supply chain to the decentralized blockchain allows for a direct exchange of documents between them, solving one of the shipping industry's largest problems.
The wave has not yet crested
Research firm Aite Group predicts that investment in new blockchain-enabled financial technologies will more than quintuple over the next four years, from an estimated US$75 million in 2015 to US$400 million by 2019.i
Whether engendering consumer trust or eliminating labor-intensive documentation, blockchain has huge implications for consumer goods and retail companies. The technology brings digital consensus, consistency and an accurate record to companies that have struggled to achieve just that using traditional technology methods.
Savvy competitors see the wave coming and have surfboard in hand.