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2022/02/03

Blockchain In Retail Supply Chain

By Rupesh Ghimire

Introduction 

Today's retail shoppers are deeply concerned about fair trade practises and the veracity of statements made by retailers regarding their products. This new era of multi-channel clients, empowered by social media, is more mindful and informed. They demand authentic and ethically sourced products . This forces retailers to increase visibility into the transit of produce from farm to fork or products from factory to home. It's no surprise that developing client trust is one of the top three priorities for leaders of the world's leading consumer companies.From the consumers perspective , they frequently express concerns about the quality and origin of retail products they purchase.Blockchain assists shops in resolving this client dilemma and establishing trust. How? By assigning a 'digital ID' to each product, all information about it is secured throughout the product's lifecycle - from origin to retail outlet. At its core, blockchain is a distributed database ledger functioning across a network of nodes while adhering to cryptographic procedures for data transfer, validation, and authentication.The network maintains an immutable chain of data, allowing trustless parties to agree on the existence and state of information stored on the network.

Impact of blockchain in retail supply chain 

Whether it's the problems with tainted Chinese materials, the European horse meat scandal, or the Egyptian cotton scandal, retailers bear the brun of it when low-quality products are released in the market. Retailers make transactions with their supply chain partners using a variety of paperwork, contracts, and asset transfer slips. Institutions such as banks operate as intermediaries in these transactions. Such methods are frequently characterised by mistrust and inefficiency. Blockchain technology addresses these issues by ensuring the supply chain's validity. The potential of blockchain to solve retail supply chain problems reveals itself in three ways.

Provenance: The retailer and the customer can both follow the complete product life cycle as it moves through the supply chain.

Smart contracts: For greater efficiency, transactions between different partners that are prone to inaccuracy can be automated.

IoT backbone: Supports low-powered mesh networks for IoT devices, minimising the requirement for a central server and improving sensor data dependability.

Benefits of Blockchain in Retail 

The use of blockchain in retail has various advantages. Some of these advantages are exclusive and only possible in the retail industry. Blockchain can also help retail industry overcome many of its obstacles. Let's look at the benefits.

Efficient Inventory management

As you already know, if retail firms want to boost their total efficiency they need proper inventory management so that there is no downfall.Blockchain not only takes care of the customer interest but it also helps the firms monitor the products and their expiry dates .

Crypto as a method of payment

Crypto payment mechanisms are another major use of blockchain in the retail business. As you know, there is now a rise in crypto-currency and  some countries seem keen to work on digital currencies in central banks, which is almost a cryptographic form of fiat.So, it appears that the future is gradually moving towards cryptocurrency. Retail firms are taking  a step ahead by making official payments for the products with the existing cryptography. It is a smart strategy to encourage and support consumers to pay for the product in a transparent way using safe digital money.

Better Management Customer Identity

As you already know, most retail firms use a conventional, rather susceptible client-server networking approach. So manipulating this data is quite simple and accessing information on the customer credit card or bank account. This is a significant violation of the laws of the state and the protection of personal data.In order to address this challenge, organisations can safeguard customer-related information with blockchain in the retail industry. In fact, they can give system authentication methods and save all information in unchanging storage. The consumer is therefore allowed to view only their data and no third party can break the network or misuse that.

Strengthening weak connections for the retail supply chain

Blockchain is straightforward to authenticate with digital financial items like bitcoin. The physical world of retail supply chains doesn't have the same advantages. Blockchain technology is accompanied by other measures, technological features and process innovations to provide the same level of security to real retail products.Below mentioned are some points where blockchain can strengthen the physical retail supply chain:

Address low level maturity of technology providers blockchain:

Several actors in technology have developed an unclear market with different maturities and strengths. To get benefits, it is important to carefully select and configure the suitable platform for the unique needs of business.

Balancing Control with Transparency:

Retailers need to discover the best balance between the blockchain kind (public/private/permitted) and multiple consensus and security methods. Selective techniques for transparency, such as zero evidence of knowledge, must also transfer from the field of theory into production.

Complimentary technology investment:

Complimentary technology infrastructure investments will be unavoidable. Many retailers are looking to improve their legitimacy with 'digital manipulation detectable' or invisible barcodes.

Changes in operational culture instituted:

Blockchain demands the integration of other supply chain participants as a collaborative, consensus-based approach. A stakeholder investment ecosystem is essential if its true potential is to be achieved.

Adaptation to changes of regulations:

In blockchain enabled processes, complex sets of trade regulations and laws must be integrated and codified, in particular for the smart contracts and global trades in question. One way to address these requirements is to have a modular framework with interchangeable and adaptable consensus and safety mechanisms. No matter what choices a business makes, the business processes that follow in the retail supply must be married

Conclusion 

A large number of characteristics in this sector may alter in the retail blockchain. While this sector is already strong, it still addresses a number of difficulties that can cause problems in the future. However, the retail supply chain can overcome any deficiencies by means of blockchain and provide more customer services.Blockchain is evolving and  its ability to contribute to better cooperation and greater openness amongst stakeholders in the supply chain is little in question. Retailers who are opening their supply chains to blockchain , have the opportunity to improve operational efficiency, show higher brand value and deliver a considerably improved customer experience.