CONSUMER GOODSTHE APPLICATION OF BLOCKCHAIN TECHNOLOGY (Includes Retail, Wholesale & Supply Chain)
ISSUES WHICH CAN BE SOLVED WITH BLOCKCHAIN TECHNOLOGY
Among the first industries to embrace the use of Blockchain technology, the retail sector has already discovered several practical applications of recording transactions in a Blockchain system. These include everything from ensuring the authenticity of high-value products such as diamonds and art to locating stolen goods and protecting both customers and sellers from fraudulent transactions.
Blockchain can be utilised as a public ledger for the registration of all new products and any transactions concerning them. As it can be used to track who currently owns what product, should a duplicate appear on the Blockchain without proper authorisation, it can easily be identified as counterfeit. This is especially relevant to the purchase of rare or high-value goods as, using Blockchain, customers can easily determine whether the product already exists on the system and whether it has been sold.
Locate Stolen Merchandise
Blockchain-supported technology like Blockverify can be used to tag products, so that whenever a consumer makes a purchase, they are able to verify its authenticity and activate it within the system. As such, should a product be stolen or go missing, it will be incredibly easy to trace as any subsequent transaction will be recorded in the Blockchain, instantly notifying the legitimate owner of its whereabouts. Naturally, this helps to prevent both sale and possession of stolen goods.
Verification of Provenance
Any retailer needs consumers to have trust in its brand if it is to be successful, and the transparency of the Blockchain can help retailers build and maintain this trust. Building a network of ‘trustable facts’ ensures a better buying experience for customers and should, theoretically, raise retailers’ standards. Provenance, for example, has developed a Blockchain project that tracks fish supplies from sea to plate, documenting where and when the fish were caught and monitoring the catch. This ensures that any claims of a fish being organic can be verified – essential for an increasingly discerning buying public.
While e-wallets offer a certain degree of protection when purchasing products or services online, when a consumer willingly makes a payment by bank transfer the money is often very difficult to recover in the case of fraud. By using Blockchain, however, an escrow system can be created to protect both buyer and seller by not releasing any funds until both parties have confirmed they are satisfied. This process can be confirmed by smart contracts and removes the need for third-party moderation.
What opportunities might Blockchain create for the retail sector in the future?
The creators of Ascribe have a bigger vision than the one initially set out by the company. This vision is called Bigchain, and instead of just recording the timestamp like the Blockchains does, the metadata of the creative works would also be recorded into the Blockchain, including the artist’s name, the title of the piece, and the type of file (e.g., .png). As all this data would be publicly available, it could be used by libraries and museums and those keeping an archive of the internet (such as archive.org).
Market for used Luxury Goods
The second-hand market for luxury and designer goods is very small. People purchasing used items are not buying them from the original retailer, and paper certification can easily be forged, so it can be difficult to be certain that goods are the real deal. While there are still only a minority of retailers using Blockchain technology as a means of authenticating their products, mass adoption could pave the way for a thriving second-hand market for luxury items. When a vendor wishes to sell on a designer bag all they need to do is produce their cryptographically-signed digital asset issued by the original retailer. The resulting benefits for the luxury market will include a reduction in counterfeit items and a higher degree of consumer trust.
Eradication of Blood Diamonds
Diamonds that are traded in areas of conflict, and whose proceeds fund war, illegitimate governments, and violence, account for about four per cent of the global diamond trade. Should Blockchain technology become mainstream in this sector, the ability to sell blood diamonds will diminish until it disappears completely – who is going to want to trade in illegal stones? While the recipients of blood diamond funds may look to other insalubrious methods to source their money, Blockchain technology could ultimately be responsible for the downfall of their unwanted regimes.
Understanding where the goods they have bought have come from is empowering to the consumer. It allows conscientious consumers to make decisions about what they purchase based on the supply chain transparency that Blockchain technology provides. Knowing what the consumer wants and the demand for a product will allow businesses to better manage their supply chain. For example, preventing the over-ordering of resources that results in unnecessary wastage. Controlling and managing resources is also one way in which the retail industry could start reducing the impact it’s their processes have on the environment.
CASE STUDIES ON THE USE OF BLOCKCHAIN FOR THE CONSUMER GOODS SECTOR
How has Blockchain technology assisted businesses that are involved in selling consumer goods and services?
The provenance of diamonds is verified using a paper based certification system. But now Blockchain technology is being used to give each stone an additional uniquer identifier, calculated using 40 data points in addition to the traditional ‘Four Cs’ of diamond classification – cut, colour, clarity, and carat. Diamonds over 0.16 carats also have a serial number inscribed on their girdles during the grading process. The platform is partially public – all diamond certificates can be cross-referenced on Bitcoin’s Blockchain – and partially private, with sensitive data (such as police reports and policy information) kept on the company’s Eris-run platform.
Ownership and Attribution
The internet can provide a great platform for artists and other content creators to publicise their work. But its openness also leaves them at risk of having their work plagiarised or used without permission or appropriate credit, resulting in a loss of income. A digital timestamp recorded using Blockchain technology allows artists and creators to establish ownership of their work on a decentralised database.
Supply Chain Transparency
Consumers are increasingly concerned with ensuring that the food they buy comes from responsibly-managed sources. They want to know, for example, that the fish in their fish and chips was sustainable caught. Blockchain technology allows for the transparent recording not only of how fish was caught (e.g., pole and line), but also its freshness, and whether it has been handled in compliance with social and environmental rules and regulations throughout the supply chain. This is obviously not just applicable to fish, but other consumables too, for instance organic fruit and vegetables. Provenance is one company spearheading such a system, helping to promote environmentally sustainable production and social good.
Any retailer needs consumers to have trust in its brand if it is to be successful, and the transparency of the Blockchain can help retailers build and maintain this trust. Building a network of ‘trustable facts’ ensures a better buying experience for customers and should, theoretically, raise the retailers’ standards. Provenance, for example, has developed a Blockchain project that tracks fish supplies from sea to plate, documenting where and when the fish were caught and monitoring the catch. This ensures that any claims of a fish being organic can be verified – essential for an increasingly discerning buying public.
LEADING PROVIDERS OF BLOCKCHAIN SOLUTIONS FOR THE CONSUMER GOODS SECTOR
Which retail businesses and brands have been at the forefront of Blockchain technology implementation in their sector?
Digital Asset combines unparalleled financial markets leadership with world-class technologists across multiple fields in one of the fastest growing fintech companies in the world. The Digital Asset Platform is the only Distributed Ledger platform to have been developed according to the production requirements of the world’s largest financial institutions.