The blockchain market demand continues to soar high with its stakes expected to rise to US $ 2 trillion in the next decade. It has enabled the existence of cryptocurrency which has gained a huge consumer base in the recent two years despite criticisms related to its high volatile nature, lack of security, unreliability, inconvenience faced during transactions, inadequate regulation of liquidity, modelling and valuation.
According to Forbes, blockchain is now at a stage where large corporations and Governments, not just a tiny hyper-technical community of IT experts, are starting to comprehend its potential in terms of improving people’s lives and building more resilient organisations. In fact, businesses now need blockchain experts who can assist them in applying blockchain technology to meet their business goals.
Blockchain offers incredibly diverse benefits as it can be applied in almost any business industry today such as banking, healthcare, e-commerce, mining, logistics and transport. This is the reason China continues to show unwavering support for the growth of blockchain technology. There is also a thriving market in the US for blockchain start-up companies like Boston Consulting Group, ConsenSys, DataArt, EPAM, Mphasis, Virtusa, etc. Switzerland boasts of 450 blockchain-based organisations and is widely popular in the blockchain world for encouraging newly developed businesses owing to its liberal duty treatment and favourable policies. Germany, Japan, Estonia, UK, South Africa and Singapore are the other countries leading in the advancement of blockchain technology.
In this feature, we delve into details about blockchain’s emergence as a concept, how the technology functions and the renowned technology suppliers which are assisting brands and retailers through its implementation.
Evolution of blockchain
Blockchain is a growing list of records called ‘blocks’ that are linked using cryptography (a method of protecting information and communication through the use of codes, so that only those for whom the information is intended can read and process it). Each block contains a cryptographic hash of the previous block, a timestamp and transaction data. Being based on Distributed Ledger Technology (DLT), blockchain makes the history of any digital asset unalterable and transparent to only the one who is allowed. The initial idea of developing blockchain was to allow digital information to be recorded and distributed but not to be tampered with.
The same concept is being used by the fashion retailers for several applications including sustainability, supply chain transparency and combating counterfeit. Once the information is stored in the chips and tags in garments and products, these cannot be altered or changed and can only be retrieved through special apps and scanners.
How the technology works
The technology works with QR code or near-field communication chip (NFC) attached to products or product tags or care label. These QR codes or NFC chips can be easily scanned by customers through their mobile phones. On scanning, the app will determine whether the item is registered on the brand’s blockchain. If yes, then that defines the authenticity of the product. Today there are other benefits too associated with the solution like product ownership which helps the customers claim the ownership of the product in case of theft.
LVMH, Louis Vuitton SE, the French luxury goods company, collaborated with Microsoft and ConsenSys to create Aura, a solution that uses blockchain technology to provide both consumers and LVMH product information on the group’s product. The technology requires customers to scan the product label and check for the authenticity of the product. On scanning, the entire product information is retrieved on their mobile phones. This ensures the customers of the product originality and gives them satisfaction about the quality and investment they are making.
Blockchain solutions for the retail sector
Retailers across the globe are integrating blockchain technologies into their supply chain to streamline and maximise their operational efficiency. Allied Market Research confirms that the blockchain-enabled supply chain solutions market is expected to grow at a CAGR of 80 per cent till 2025 to reach projected US $ 9,852.9 million.
Blockchain technologies not only improve automation of supply chain and reduce human interference to the minimum, but they also offer high traceability with the help of which, one can track supplies in real-time through all the stages of the supply chain and save all the essential information on a decentralised ledger. Vendor disputes which are most common in retail businesses can be solved in no time with blockchain’s high traceability feature as all the information related to the cause of disputes will be easily available for all to access.
Predictive maintenance techniques with the support of blockchain can help to resolve disruptions in fleet management operations and machinery which might lead to delayed shipping or unnecessary repair costs. Storing information in a decentralised manner on the condition of vehicles in fleet and equipment used in retail can help one track the maintenance works done in the past. This will help to determine the further repair works that need be done to avert breakdown.
Fashion and luxury products often face a huge challenge of counterfeit items that are hampering their brand value and trust. Today the products are made so real that it is often difficult for buyers to authenticate the original ones. Retailers are under peril of losing customers in case counterfeit products are delivered to them. It is here that blockchain technologies come to their rescueby verifying the authenticity of the products with greater precision.
Tackling counterfeiting by Blockchain involves identifying a product’s proof of origin, or provenance. By combining this with blockchain’s end-to-end tracking mechanism, companies can ensure quality checks at every level, from production to delivery. Smart tags are integral to a blockchain-powered solution for fighting counterfeiting. When attached to products, smart tags help to identify the place of manufacture, track real-time location and allot specific information at all the different stages.
Walmart utilised Blockchain technology to digitise the entire food supply chain process and make the food supply ecosystem highly transparent. It takes the help of Hyperledger fabric which makes the process transparent, reliable and traceable. Its employees can track origin of products and ascertain from where the products came and where they are currently stored.
FedEX, one of largest global shipping organisations, guards its chain of custody and tracks shipments through blockchain. It has joined BiTA and launched a blockchain-powered programme to ensure the type of data that should be stored in order to solve customer disputes. Even Ford Motor company uses blockchain to ensure that it is getting authentic products. When cobalt, one of the essential ingredients of electric car batteries, is mined, Ford will get informed about it on the ledger and then the company can track its further whereabouts.
Babyghost, a fashion brand collaborated with BitSE, a blockchain company and VeChain, a product management solution that is integrated with blockchain technology. The brand integrated its product from Spring/Summer ’17 collection with VeChain Chips that contained unique identity codes stored on blockchain. The customers could scan these chips to retrieve the entire story behind the garment with proof of product authenticity.
Leading blockchain technology suppliers
Seal, a blockchain-powered product authenticity and service platform, provides a blockchain solution to help brands and retailers lock their authenticity. The technology works as each of the products are embedded with a sealed chip which is linked to information on the seal network, a completely secure network that leverages the use of a decentralised blockchain database. Consumers buying the products can easily scan the chip with a Seal app to verify authenticity and product information. The dynamic NFC chip provides unique code with every interaction, which makes it impossible to duplicate. Moreover, through the app, consumers can also claim the ownership of the products and when consumers buy a product with Seal tokens (currency of the seal network), they directly claim ownership of products as well. This helps in theft prevention and insurance processing.
Furthermore, it also rewards the brands on second-hand purchases. Once the product changes owner, a small fee is paid to the brand. This allows brands to earn money from second-hand trades, thus contributing towards sustainability.
LeewayHertz, a US-based leader in blockchain solutions, provides end-to-end blockchain solutions, ranging from blockchain consulting to user experience and design, blockchain development, deployment, maintenance and upgrades. The company boasts of blockchain experts who have handled more than 80 smart contracts and developed more than ten blockchain applications. Established in 2007, this software development company has produced several digital platforms on cloud, mobile, blockchain and IoT.
Amazon Web Service Inc. (AWS), a subsidiary of Amazon, is a blockchain network that allows retailers to communicate and authenticate rewards information faster and transparently without the need of a central authority to manage transactions related to rewards amongst retailers. AWS provides a highly reliable, scalable, low-cost infrastructure cloud platform, empowering hundreds of thousands of businesses in 190 countries around the world. Popular retailers and brands are taking advantage of AWS’s open and flexible, secure solution to access resources as per their business needs, to get faster, efficient results and at affordable price.
With blockchain technology foraying fast into the global retail industry, businesses need to plan carefully to reap maximum benefits from the potential of this technology and achieve credible success in a transient, wavering market dictated by consumer’s rapidly changing expectations.