How Can Retailers Use Blockchain? New Deloitte Report Outlines 16 Use Cases

Last year, the value of the global counterfeit goods market was estimated to exceed $450 billion, an issue that blockchain solution providers such as Everledger and Blockverify have begun to tackle.

Everledger, for example, has been applying blockchain technology to the diamond and fine wine industries. In the past three years, more than two million diamonds have been placed on the blockchain, each with an entry on attributes like color and carat.

The retail and consumer packaged goods industries particularly stand to benefit from implementing blockchain, a new Deloitte report argues. Blockchain would be able to tackle a number of supply chain challenges that these two industries face, from traceability and compliance to stakeholder management and flexibility in the face of risks and unexpected events.

In their analysis of more than 50 blockchain use cases in the two industries, Deloitte researchers categorized them into three broad groups: consumer, supply chain, and payments and contracts.

The “consumer” category covers the following types of blockchain use cases:

• Smart loyalty programs — capturing and storing customer details for personalized targeting, incentivizing behavior and rewarding loyalty
• Consumer participation — guaranteeing secure customer surveys and research
• Locating stolen products — tagging products to allow customers to verify the authenticity of what they purchased and to allow for tracing of stolen goods
• Connected services — enabling businesses to guarantee after-care services and warranties
• Targeted recall — allowing for easier identification of unsafe or defective products and the tracking of the status of any product recalls
• Sharing economy — allowing for the cooperative purchase of expensive consumer goods

Next, the “supply chain” category covers the following types of blockchain use cases:

• Connected supply chain — supporting an end-to-end supply chain solution, including tracking, documentation and payments
• Authenticity and provenance — verifying where products came from and their movement throughout the supply chain
• Delivery — enabling more secure manufacturing and consumer deliveries via improved tracking
• Know your supplier — using external information to store and verify supplier details
• Connected store — analyzing supply chain and product data in order to improve the retailer’s fulfillment process
• Fraudulent transactions — protecting all parties by not releasing funds until mutually agreed upon

Lastly, the “payments and contracts” category covers the following types of blockchain use cases:

• Consumer payments— enabling people to save time on payments, whether through cryptocurrencies or more expedient approval of credit payments
• B2B payments — simplifying transactional processes and reducing costs and risk
• Digital advertising — supporting transparency in ad campaign execution and engagement targets by providing a data trail
• Consumer protection — maintaining digital records of purchases and keeping track of product warranties, thus reducing administrative work

Tackling Next Steps

If your organization has been facing a number of blockchain opportunities and is uncertain as to where to start, evaluate them both on the value they promise and the complexity of implementation, the report suggests.

The report authors suggest taking a “wait and see” approach to opportunities that would involve a complex implementation while offering less value, such as using blockchain for locating stolen products or improving the recall process.

In contrast are the use cases that promise relatively high value and low complexity, which businesses should go ahead and explore. These include smart loyalty and “know your supplier” programs. “Businesses that are exploring blockchain opportunities should consider these as a starting point, if relevant to their organization,” the report suggests.

Another good starting point would be opportunities that, although offering less immediate value, are relatively simple to implement. These include keeping a digital record of consumer purchases and warranties or using blockchain to make the delivery process more secure and transparent.

While many businesses have been reluctant to adopt blockchain beyond test cases, Deloitte is optimistic that the technology will become mainstream. According to their estimates, blockchain will move beyond its reputation as a “fringe technology” and become standard across different industries in the next five years.

Check out the full report here.