Safety, credibility, trust, and confidence are the most important concepts when it comes to online shopping. In an era of the internet scams, phishing, hacking, and counterfeiting, blockchain technology might be an answer to all those threats that both retailers and buyers face. Originally intended for the purposes of the cryptocurrency, Bitcoin, this technology has evolved and shown its tremendous potential, not only for the retail industry, but also in establishing new, virtual economies and completely transforming the movement of goods, money, and even data. Even though we’re not yet there, certain aspects of the blockchain are already being used.
The blockchain is still rocket science to many people, but, basically, it’s a decentralized “digital ledger” that records economic transactions, thus preventing corruption of the information, and makes them transparent and practically unsusceptible to any illegal and unauthorized data alterations. This mechanism will help us eliminate system and human errors, as well as the possibility of exchanges performed without the authorization of one of the parties involved. Any kind of data manipulation is impossible with the blockchain because the information about transactions isn’t stored on a single computer but is shared across the network of computers, called nodes, and this database is checked and updated every 10 minutes, and it’s completely public. All this renders the traditional commerce and banking systems unnecessary and redundant, as the whole process is decentralized and conducted on a peer-to-peer basis.
Food for thought
In August 2017, Amazon finalized its $13.7 billion acquisition of Whole Foods, and it started operating like a traditional market. This shift poses a significant threat to retailers so that now they have to join forces with food producers by means of blockchain and find a way to outdo this online retail behemoth. Apart from maintaining a competitive edge, retailers will also be able to create a fully transparent and safe food system, meaning that every participant in it will be able to obtain access to all the relevant information about a certain item of food, including its origin. This tracking mechanism is critically important for identifying the sources of foodborne diseases and keeping them under control. If we bear in mind that according to WHO every year 1 out of 10 people gets ill from eating contaminated food, while 420,000 die, it’s clear why this system should be put to use as soon as possible.
The synergy of new technologies
AI, machine learning, cloud, blockchain, VR, and AR are all disruptive technologies that are transforming the world of retail as we know it. Some of them have already been more than successfully deployed so that now companies can improve customer experience, predict demand, and forecast customer behavior with the help of sophisticated retail business intelligence software that can collect and analyze large quantities of data. On the other hand, when VR and AR are mentioned, most people instantly think about the gaming and entertainment industry, but these two technologies can be the future of retail, and when paired with all the benefits of the blockchain, they will allow users to bypass both traditional banks and retail stores as well as other intermediaries, at the same time providing protection from frauds, counterfeit goods, scams, and other kinds of cheating.
For example, VR can significantly help sellers show their goods and assist customers in picking exactly the thing they want. Imagine an AR-powered furniture or fashion showroom, which would enable you to see the items you’re interested in as if you were physically present there, or even visualize how a certain sofa fits into your living room. To cut the long story short, both sellers and buyers could profit from this new, online marketplace, where the goods and services are exchanged directly by means of a user-to-user-based network. The best part is that this way, the whole process becomes cheaper and faster, but not at the expense of transparency and safety.
The question of loyalty and trust
It goes without saying that trust is of paramount importance for financial transactions, which is why blockchain operates by creating a digital signature of each transaction and instantly sharing it with the network of node computers. However, certain blockchain platforms also rely on building social capital and rewarding users with cryptocurrencies to be active and participate in the marketplace by posting their products and services online, reviewing other users, commenting products, or upvoting and downvoting, all of which can build trust and help eliminate unwanted and irresponsible behaviors, establish confidence between buyers and sellers, as well as ensure better value for all parties involved without having to include redundant intermediaries that only increase prices without adding any value. Stolen goods can also be easily recorded and identified by blockchain solutions, and this, together with anti-counterfeiting mechanisms make this technology perfect for trading luxury items, electronics, jewelry, and other high-priced goods.
Even though it’s still a long way from being completely implemented, the blockchain has the potential to introduce and establish a full-blown freedom of trade, and the retail industry will have to adapt to the new rules in order to survive this groundbreaking new technology and stay in business.