Should Retail and Consumer Goods Brands Adopt Blockchain?

Introduction

The fast-moving consumer goods industry, or FMCG as it is called- stands in the list of the increasing number of sectors that are utilizing the latest technologies. Both the retail and FMCG sectors would be a lot different in the future than they are today, owing to the Blockchain technology.

Retail industries are still booming even after the pandemic hit the world. Although the majority companies are offering online purchasing facilities, the primary revenue still comes from their physical stores. Undoubtedly the pandemic has caused some serious trouble, retailers have faced issues such as maintaining the supply chain, opening stores, and keeping all the customers safe.

According to a report, the value of Blockchain in the retail market in 2020 was estimated to be at USD 1936.68 million, and it was forecasted to reach 60.4 percent over the period 2021–2026.

Here is how the retail industry is perceiving growth with Blockchain- (region-wise):

Now as we know that the demand for Blockchain tech is increasing in the retail and consumer goods industry, we might as well look behind the reasons for the same:

  • The demand for transparency, as well as for improved customer service, in the retail supply chain is driving the market growth.
  • Consumer demand for fast, frictionless transactions is leading to a sharp increase in mobile and e-commerce fraud, which is increasing demand for a safer and more reliable platform.
  • Scalability and interoperability are the necessary factors for Blockchain adoption, and this is only possible when industry standards are high enough.

So, it is high time that retail industries start focusing on blockchain implementation more seriously and start to integrate it into their legacy systems. This blog post would help you understand how blockchain can help in the retail and consumer goods industry.

Reinventing the consumer experience with Blockchain

Although the retail & consumer industry is doing quite well compared to other industries, the internal issues need to be addressed sooner or later.

According to a report by IBM, 7 in 10 consumer industry executives surveyed expect to have a blockchain production network in next three years.

Wonder why? Here are a few benefits Blockchain technology render:

The success of the FMCG industry relies majorly on two factors- accuracy and speed; accuracy to make the right decision, and speed to make this decision at the right time.

Here are some of the realistic benefits of Blockchain in consumer goods and its retailers:

1. Better data security

The blockchain is built with secure blocks. These blocks act as nodes containing documents that are controlled by all the stakeholders in the network. These nodes completely exclude the chances of stored data being hacked.

In the retail and consumer industry, companies can be sure of protecting their identity and important data with a proper Blockchain-powered platform in place. This enables a system of sorted information with high security.

2. Better consumer identity management

As you know many retail companies work on a typical client-server networking model, which is vulnerable to cyber-attacks. These days it is quite easy for unethical hackers to manipulate data and access the customer’s credit card or bank information. This leads to a breach of privacy for companies as well as for consumers.

To overcome this issue, organizations are deploying blockchain in the retail market to secure the data related to the consumers. In the real scenario, blockchain offers an authentication process in the system and stores all the information on the immutable ledger. This way only the consumer can have access to the information, making the entire process transparent.

3. Streamline retail tax

Another benefit of Blockchain in the retail and consumer industry is the process of streamlining sales tax. In reality, every year companies have to pay taxes based on their sales. However, many tend to avoid paying taxes based on their sales which amounts to $14.5 billion! This tax avoidance majorly is done by online retailers. If this keeps on going, organizations can get serious charges against them.

Therefore, to solve this issue, Blockchain-based automated sales tax collection helps collect taxes on the account of profit they made. More so, retailers can easily upload their documents for proper verification on the network. This is indeed a great way to pay the taxes on time and avoid any further legal issues.

4. Reducing cyber crimes

Another benefit of Blockchain in the retail and consumer industry is the prevention of fraud and counterfeit products. According to a report, the retail industry loses up to $62 billion in 2019 owing to fraudulent activities. Even more, high-end retail organizations lost more than 30 percent of the profit due to poor return policies and high margins.

The main issue is not a loss but the damage that the brand faces by keeping counterfeit products for the sale. By deploying Blockchain technology, the retailers can track the goods from the manufacturers and ensure the authenticity of the products.

5. Offering Product Contracts

The lack of proper maintenance from the supplier supply chain affects the industry from growing. In a real-time scenario, the payment process for a shipment is time-consuming. From verification to payment processing, this process takes up a lot of time. This accounts for huge losses for retailers.

However, one of the best use-cases of Blockchain in the retail sector is smart contracts, which offer a guarantee of payment to both consumers as well as retailers. A proper payment system also motivates the seller to complete the shipment on time.

6. Improved Inventory Management

Blockchain technology provides a transparent and permanent record of transactions that take place in the retail industry. In addition to this, Blockchain allows each party to interconnect in this immutable chain. This includes suppliers, manufacturers, distributors, and retailers.

The records that are stored on the Blockchain are accessed by only those who connect to the network. This leads to enhanced inventory management.

Making the most of the opportunity

After understanding all the benefits Blockchain has to offer to the retail and consumer industry, this would become a standard tool for solving all the strategic challenges. But this tech would serve more than what we would have initially estimated. Here’s how Blockchain technology helps the retail supply chain-

Despite the number of opportunities, Blockchain presents for the retail industry to find efficiency, improve product quality and improve the overall consumer experience. The growth of Blockchain also comes with a lot of challenges to the retailers and all the FMCG businesses that would need to be met head-on.

So, if you are looking for a reliable Blockchain app development organization that would help you overcome these challenges, then we have all the tools you might need. Know more or sign up for a free consultation on Blockchain retail app development.

The fast-moving consumer goods industry, or FMCG as it is called- stands in the list of the increasing number of sectors that are utilizing the latest technologies. Both the retail and FMCG sectors would be a lot different in the future than they are today, owing to the Blockchain technology.

Retail industries are still booming even after the pandemic hit the world. Although the majority companies are offering online purchasing facilities, the primary revenue still comes from their physical stores. Undoubtedly the pandemic has caused some serious trouble, retailers have faced issues such as maintaining the supply chain, opening stores, and keeping all the customers safe.

According to a report, the value of Blockchain in the retail market in 2020 was estimated to be at USD 1936.68 million, and it was forecasted to reach 60.4 percent over the period 2021–2026.

Here is how the retail industry is perceiving growth with Blockchain- (region-wise):

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