The future of retail is digital, traceable, and designed to protect shopper data. The blockchain will make all of these goals more realistic.
Improving customer loyalty programs is a compelling a use case. Young shoppers are moths, with effective discounts and savings programs playing the role of the flame. Yet most retailers still haven’t mastered the art of the effective rewards programs.
Consolidating multiple loyalty programs among corporate partners and better tracking a shopper’s rewards on a decentralized platform would be a distinct competitive advantage for those adopting the blockchain.
Retailers increasingly value provenance and ethical business practices. Blockchain-powered provenance will extend to the point-of-sale (likely somewhere on the shelf or display), appeasing customers who want to know where their goods come from.
It’s likely that companies who invest in blockchain will become more valuable. Even if the technology is a financial loser, investment in blockchain will force the hand of those who consider it a luxury. Then, the technology won’t be a luxury — it will instead become a direct means to businesses operating longer and becoming more valuable.
Here’s what the experts have to say.
1. Michael Dobak, CMO of BLOCKv
“As 2019 dawns, blockchain’s dynamic, purpose/destination-driven nature feels less like a ledger, more like a powerful technology that will drive the future of digital engagement.
On a blockchain, data associated with each interaction is recorded chronologically, time-stamped, and linked to an individual’s identity. This data is available to all authorized stakeholders, functioning as a verifiable source of truth. To put blockchain technology in promotional marketing terms, here’s how this might play out: every time your customer redeems a gift card, interacts with a digital marketing campaign, uses a coupon, or makes a purchase, there is a chronological ledger showing exactly when and how these actions took place. This transparent path to purchase allows retail marketers to engage shoppers throughout the path to purchase and more effectively measure performance.”
2. Carol Spieckerman, President of Spieckerman Retail
“From a consumer perspective, so many retail technologies and innovations, from the Internet of Things to artificial intelligence, have an overriding threatening edge to them. The benefits of blockchain are arguably skewed more toward consumer-centricity and consumer empowerment and that alone may accelerate adoption. The potential to realize the so-far elusive vision of a fully-traceable and transparent supply chain and to enhance personalization without compromising security, for example. Retailers can harness blockchain as a trust and loyalty builder rather than taking a defensive posture.”
3. Brendan Miller, Principal Analyst at Forrester Research, Inc.
“Coalition loyalty programs have struggled to gain traction in the US (remember Plenti). The main challenges are the point of acceptance integration, the back-end accounting, and the fact that each retailer has their own program to promote. Down the road I see blockchain helping to relieve some of these pain points by better enabling scenarios like utilizing airline miles for everyday purchases such as fuel, or using a particular retailer’s rewards program at a complimentary retail partner.
On the supply chain front: better tracking the origin (provenance) of goods is critical to maintaining brand trust. A component more consumers are scrutinizing when they are making product decisions. It is early days, but distributed ledger could be leveraged to help with this process of tracking goods or ingredients especially when they are being transferred between third-parties.”
4. Dr. Lucas Lu, Founder of CyberMiles
“Marketplace functions that are currently centralized (like dispute resolutions) will be done in a decentralized manner powered by the communities’ own incentivized members. This will strengthen the participation and creativity of marketplace participants while at the same time allowing the network to become even more dynamic and scalable.”
5. Kristen Howell, Partner at Fox Rothschild
“We anticipate the retail industry will be one of the fastest to adopt blockchain. Other promising industries, like financial services, are heavily regulated and have entrenched systems that slow adoption. For retail, blockchain provides real world solutions to long-standing challenges like counterfeiting, without the regulatory hurdles of some other industries. Other applications in varying stages of development and deployment include decentralized shipping and handling processes to speed logistics, and applications to improve the ability of customers to use loyalty rewards within loyalty networks.
Many consumers will never “see” this blockchain adoption. Like so many technological improvements, we will enjoy the benefits and have no idea how they operate behind the scenes.”
6. Abhishek Biswas, Content Writer at Orderhive
“According to an estimate by IHS Markit, in the worst “downside” case scenario for the future of blockchain in retail, still sees this amount increasing to $49 Billion by 2030 which was only $38 million in 2017.
For all businesses that use blockchain tech, a report projected that this business value will increase from $2.5 billion in 2017 to $2 trillion in 2030. Put in context, 10% of the global gross domestic product will be stored on blockchains or similar technology by 2025.”
7. Paula Rosenblum, Co-founder and Managing Partner at RSR
“I think many of the use cases have been clearly identified already. It should make managing the supply chain a bit easier, definitely facilitate track and trace, and ultimately be used in other ways that face the consumer. The other feature it has that we should mention is because of its distributed nature, it’s quite hard to hack. That’s an aspect of it that is very important. Just as it’s hard to eliminate all associations between IP addresses and web site names (because there are so many domain name servers), it would be hard to really mess up a blockchain database because it is distributed.
There are definitely issues to be solved, especially around scale, but the future looks promising to me.”
8. Christian Beckner, Senior Director of Retail Technology at NRF
“Blockchain is likely to become a valuable technology enabler for the retail sector in the next few years, but first the technology needs to become seamless – almost invisible – with companies’ broader technology, and not a separate system or application.”
9. Filiberto Amati, Partner at Amati & Associates
“Blockchain can play several roles in retail. For example, in a context where privacy is becoming a concern, and cashier-less shopping requires some forms of identification, blockchain can become the intermediate layer between personal identity and anonymity. Of course, blockchain can also be used as a form of payment in those cases. In addition to that, blockchain can create a more transparent market for store promotions: promo mechanics are often relying on screaming louder and louder to reach a wider group of shoppers. Smart contracts in retail can create a transparent matchmaking marketplace for consumers interested in certain promotions and brands interested in those consumers. Finally, blockchain can become a more transparent mechanism for retailers loyalty programs, by even making it easier to trade and exchange points for products and/ or money.”
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