Why Retailers Need to Embrace Blockchain to Survive and Own Their Future
The jury may still be out on whether or not physical retail stores are “dead” or “dying” because of the world’s digital transformation. It’s clear, on the whole, they’re struggling. Brands are well aware they need to get the most out of their online presence to survive in today’s world.
Consumers love shopping online, which Amazon capitalized on early and has made brilliant move after brilliant move to carve out an empire. Seemingly every product imaginable, from every possible brand, lives on Amazon’s marketplace. Amazon makes a fortune in the process, by charging brands a fee on every item sold (which inherently raises costs for consumers), and by gathering users’ data to sell to whomever is willing to pay. This is a model that primarily serves the middleman’s needs, and not those of retailers or consumers. So why do we put up with it? For one, there hasn’t been much of an alternative. But now, thanks to blockchain technology, it is finally becoming possible for retailers and consumers to deal with each other directly and efficiently.
Blockchain’s ability to create a decentralized, immutable ledger for information means that consumers will have the opportunity to own all of their data across the entire web and will decide who gets to interact with them. It will be like an online ID, unique to the user and totally under their control. The internet will change because of this, with data collection and sharing becoming a totally consensual process. If consumers own their own data, once they choose to share it, it’ll be easy for retailers to find the people who are genuinely interested in what they have to offer. No need to pay an ad-targeting middleman with an incomplete set of data to dredge up a segment that may be interested. Instead, retailers using blockchain will be able to use consumers’ purchase history to quickly verify and serve their audiences all on their own.
Blockchain should also be a catalyst for a deeper relationship between consumer and retailer in other ways. Brands can use blockchain technology to track exactly where their products are coming from. Consumers won’t need to worry about buying counterfeit goods because there will be a blockchain-backed log proving that the item is legitimate. And by the same token, brands can use blockchain to prove that their products are made with the correct materials. That could be big for, say, a coffee company claiming that their beans were only taken from ethical farms. With blockchain, it will be simple to check.
The sooner the retail world adopts blockchain, the sooner they’ll be able to cut out the budget being spent on services like Amazon and ineffective ad campaigns. Many of those brands will reinvest that money back into their products, which can only be a good thing for the consumer.
