There has been an affectation on the retail industry by a host of technological innovations. Some have helped reduce costs and increase efficiency, while others have created customer experience nightmares. The question, then, is: can blockchain make retailers’ lives easier or harder? In our view, it’s a resounding yes for both cases.

This is not to say that blockchain technology does not come with challenges or risks. However, as long as organizations do their homework and thoroughly evaluate whether blockchain makes sense for them, there are immense opportunities for reducing costs and improving customer loyalty programs. So let’s explore how blockchain could benefit retailers.

<img class="aligncenter" src="https://d540vms5r2s2d.cloudfront.net/mad/uploads/mad_blog_5cd93eeda531b1557741293.png" alt="Blockchain Retail Industry" width="589" height="373" />
<h2>Reliability</h2>
When you use traditional currency, such as dollars, you trust your government to ensure it’s authentic. You trust them so much that you probably won't accept a damaged or marked $20 bill. With blockchain, every user on that system must authenticate each transaction on the blockchain by digital signatures. This means no one can copy or fake transactions using blockchain technology. The process prevents fraud because digital signatures are virtually impossible to forge; even governments have trouble doing so! That’s why many people believe blockchain will revolutionize everything from banking and shipping to voter registration and crowdfunding.

The retail industry can use blockchain technology to improve customer identity management, inventory tracking, automated back-office operations, and product provenance. For example, a retailer can trace products from their origins to their destination, ensuring that they get their delivery without damage or missing pieces. It all adds up to greater efficiency when buying goods and services with cryptocurrency. It’s already happening: Virgin Galactic accepts <a href="https://www.cryptoknowmics.com/news/5-ways-how-bitcoin-can-be-a-hedge-against-inflation">Bitcoin</a> for space flights, while Overstock has sold thousands of furniture items worth over $25 million since 2014.
<h2>Transparency</h2>
Transparency in the retail industry is critical to consumers, and blockchain technology can help. By its very nature, blockchain is transparent. It allows consumers to see exactly where their information is going and what they use it for.

It’s difficult to calculate exactly how much profit the retail industry loses due to fraud and counterfeiting in retail. According to a global non-profit pioneering anti-counterfeiting efforts, roughly $450 billion worth of counterfeit products is sold every year. As these goods grow in complexity—and as manufacturing technologies like 3D printing become more affordable—fraud will only continue to cost retailers billions of dollars. But what if there was a way for retailers and consumers alike to have full transparency into all transactions on the supply chain? What if we could get the assurance that our shoes were real or that there's been no recall of our groceries? Blockchain seems to be the answer to these questions
<h2>Security</h2>
Security is of utmost importance in any retail business, and blockchain is no exception. Unfortunately, the retail industry is particularly susceptible to cyberattacks and information leaks, as almost all purchases require sensitive customer information. Blockchain helps prevent such leaks.

Major hacks at <a href="https://www.ft.com/content/1fcf4c82-287f-11e4-8bda-00144feabdc0">Target</a>, Home Depot, <a href="https://www.cryptoknowmics.com/news/jp-morgan-invests-in-blockchain-intelligence-startup-trm-labs">JP Morgan Chase</a>, and other large retailers in recent years have raised questions about whether retailers are doing enough to protect sensitive consumer data. In all these cases, hackers were able to gain access to retailer systems using easily compromised credentials from third-party vendors that handled sensitive payment card data.

In 2014, a <a href="https://www.ft.com/content/fb206340-28be-11e4-8bda-00144feabdc0">cyber attack on global shipping giant UPS</a> reportedly exposed the information of more than 100,000 customers. By leveraging blockchain technology and unique digital identifiers for each transaction, a retailer could get control of its most important information assets. As a result, consumers would benefit from greater privacy (less likely to be hacked), enhanced security, and even lower costs. Unfortunately, current security measures are obsolete and at risk of exploitation by malware.

Smart contracts can guarantee safe storage of personal information, providing a seamless shopping experience while protecting customer privacy and reducing credit card fraud through usage history verification (i.e., checking that your payment information has been used by you before). One analysis found using blockchain technology can reduce retail losses due to fraud from 4% to 2% .
<h2>Cost</h2>
As the adoption of blockchain technology continues, there is a growing market for applications in the retail industry. <a href="https://www.retaildive.com/news/blockchain-to-drive-164b-in-efficiencies-for-retail-by-2030/529191/">IHS Markit estimates</a> that by 2030, retailers and e-commerce companies will realize a “probable business value” of $164 billion.

While these numbers are conservative, they show how much a boost the new technology will provide in cost savings and efficiencies. The cost of adopting blockchain technology in the retail industry will ultimately depend on whether or not the benefits are worth it. However, the cost of adopting blockchain is prohibitive for smaller retailers and brands. Also, these companies should not be put off by the initial cost.
<h2>Major Blockchain Retailing Adopters</h2>
Several companies in the retail industry are starting to implement blockchain technology. Companies such as IBM Corporation, Microsoft Corp., and Amazon Web Services Inc are among the major players in this industry.

Walmart has tested the technology extensively in various pilot projects, including a food safety partnership with IBM. In addition, Walmart will require leafy green vegetable suppliers to upload data into the blockchain by September 2019.

IBM is already working on a food safety blockchain solution that uses a blockchain to ensure food safety. Another company working on blockchain retail technology is Scytale Ventures, a Mark Cachia investment firm. Cachia believes in the Web 3 vision: a secure, decentralized, and verifiable internet.

The Retail Industry Should Adopt Blockchain Technology

The retail industry has faced major issues in recent years as online shopping and changing consumer trends have made it difficult to maintain profitability

Oluwademilade Afolabi is a freelance writer and editor passionate about blockchain technology and the health industry. He is a 6th year medical student, and has worked with various companies and blogs since the blockchain revolution began.

The Retail Industry Should Adopt Blockchain Technology

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