According to the World Economic Forum, 10% of global GDP will be accounted for by blockchain technology by 2027. Could the time be ripe for our retail sector to embrace this technology?
After researching the topic and collating links to interesting articles, I’ve found there could be five major benefits to adopting blockchain technology in New Zealand’s retail sector. I’m well aware of the “hype,” and much is to be proven, but if executed well, these benefits could include the following:
1. Reduced transaction costs
Cryptocurrency is one of the recent visible benefits of blockchain, and it should be of special interest to New Zealand retailers. After all, Kiwi consumers have been paying close to $200 million in processing fees each year in recent years.
Because payments made through blockchain do not require a central authority to verify them, retailers can offer consumers lower prices. On top of that, retailers who accept blockchain-based cryptocurrency open themselves up to New Zealand’s many early adopters.
2. Improved logistical supply chain
Our current retail supply chain model is extremely inefficient. Unnecessary middlemen and data silos slow the supply chain down at almost every stage. To make things worse, New Zealand is currently suffering a chronic shortage of the procurement professionals who prop this system up.
The simple fact is, there is no need for supply chain managers to waste time tracking shipments across separate data silos. Instead, they could track progress across the entire supply chain by accessing a single secure blockchain.
This would improve supply chains in many ways. Companies, in particular, could track exactly where items are lost in the chain. Shippers could also estimate delivery times more accurately, as they would know exactly when goods would arrive.
3. Empowered customers and new shopping experiences
In the era of the empowered consumer, companies must offer their customers unique incentives to stay loyal. Blockchain exacerbates this by enabling consumers to control our access to their data. To retain loyalty and data, retailers must offer customers innovative incentives.
Traceability and product “stories” are becoming more important to customers and Blockchain could be a way of creating new experiences for them.
4. Fewer counterfeit goods
With the rise of online shopping, the number of counterfeit goods being shipped to New Zealand has increased. This is particularly worrying for our booming high-end retail sector, which can lose millions to unlicensed imitations.
A secure blockchain would give licensed products a verifiable identity. To verify the authenticity of certain products, consumers and shipping companies could simply access that product’s official blockchain.
5. More consumer trust
Despite numerous advances in mobile retail, only 22% of New Zealanders are willing to pay through mobile platforms. Our apprehension is understandable. After all, numerous payment platforms have been breached in recent years. The simple fact is, centralized platforms with single entry points are particularly vulnerable to hacking.
Thankfully, blockchain solutions distribute consumer data across numerous decentralized nodes. If a hacker cracks one of these nodes, they will only find a small, encrypted piece of the data they seek. By investing in such safe solutions, retailers can earn the trust of consumers. In turn, this can earn them more online sales than their competitors.