Blockchain – Is It The Future Of Retail?br>
Over the past 20 years, the Internet revolutionized shopping. It changed almost everything about the experience — how we shop, when we shop, the feeling we get while shopping. According to recent research, approximately 56% of retail sales start online.
So it may be surprising to hear that physical sales still represent 90% of sales worldwide. Even though online shopping has become a ubiquitous common experience — one that has perhaps forever altered the idea of shopping itself — there’s still a ton of room for innovation in the retail sector. If brick-and-mortar stores still account for the majority of retail sales made, how can the digital shopping experience improve to the point where there’s a much more desirable balance?
The breakdown right now, as I see it, is communication. Generally, brick and mortar could be better leveraged by enhancing their digital communication with customers. The challenge is to create a digital conversation that builds a more personal relationship.
The fact of the matter is, sales at retail stores are declining. A new customer must emerge for these businesses to keep thriving. Retailers should be poring through consumer data — when a customer visited the store for the first time, when the customer visited the website, or what kind of customer engaged with a post on their brand’s social media. By sifting through this high-level data, retailers should be able to take away KPIs for their business, and armed with the information they’ve collected, build educated strategies on how to execute them.
But that’s only one side of the successful reinvention of online shopping. As always when it comes to shopping, the customer is always right. With privacy on everyone’s minds this year, customers have shown great demand for a more personalized shopping experience, but without having to give up their own personal data.
THE MISSING PIECE
The solution here is one you’ve probably been hearing a lot about lately — blockchain.
By using blockchain technology and its revolutionary peer-to-peer verification network concept, customers will be able to share some, but not all, of their personal information. Shoppers can be rewarded for sharing with a retailer a certain piece of information and don’t have to worry about other information being accessed.
But blockchain isn’t just an asset when it comes to privacy. In a blockchain-based rewards program, shoppers can be rewarded not just for purchases, but for any type of shopping behavior, online and offline, for example any action they take while on retailers’ websites. This leads to the development of a personal relationship akin to what you might get by walking into a store, and also gives the customer more freedom in their shopping behavior. Though blockchain technology is just now starting to catch on in big consumer environments, its application to shopping presents a markedly win-win scenario.
Customers want privacy and freedom to shop wherever they want. Retailers want more information on how best to serve the customer, and how to build a relationship that will possibly never require physical contact with a store. The proof-of-behavior info that is shared — and protected by the blockchain’s security properties — encompasses in-store activity, purchases made and social media analyses made in order to pinpoint brand influencers and reward them.
Retail is entering a new age, and for a business model to succeed and scale, it’s going to require a new sort of discerning customer. By using blockchain technology in the retail space, a retailer can collect information that can help build a relationship with a customer, and the customer is only giving them information they’re comfortable sharing.
I expect that blockchain will make its way into many aspects of our daily lives — currency, lending and borrowing, diversification of investments, and even sports gambling. Retail is the space that could benefit the fastest by savvy retailers using blockchain’s encryption. History, and thriving business, awaits.