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Why blockchain is important for retail industry
Blockchain was largely seen as the cryptocurrency bookkeeping technology, but it was in 2015 when it came out of shadows of cryptocurrency and found use in various mainstream business applications. Since then the technology of blockchain has come a long way, and the global blockchain market in retail is touted to reach $11.1 million by 2026. Blockchain is gaining popularity in the retail sector due to its various advantages such as transparency, real-time information, and tracking.
Why blockchain matters in retail?
Blockchain is also called Distributed Ledger Technology (DLT), which allows all the participants in a distributed network to each maintain a copy of the unchangeable ledger of transactions and this takes out the need for third-party monitoring. This gives retailers better control of inventory, what they are selling, the quality of it, and all this is based on the real-time tracking capability of the blockchain technology.
Following are the offerings of blockchain for the retail industry:
Supply Chain Transparency
The supply chain network is by nature disconnected due to the involvement of various departments such as ordering, manufacturing, warehousing, shipping, etc. Blockchain helps in establishing a single network through which all the departments can communicate. Blockchain can become the global supply chain communication tool because no single party owns and controls this communication channel. Retailers can keep a real time track of their inventory across their entire supply chain network, right from the manufacturing floor to the final delivery of the product. The blockchain database is tamper-proof because every entry has to match across time, and this is great power over the traditional databases which can be easily tampered and had the weak spot for foul plays at various levels.
Transparency has always been the precedence for financial transactions, and blockchain creates an ecosystem of transparent transactions and smart contracts. Blockchain takes out mediators from the process with secure digital records which are managed centrally and make all the transactions traceable over a unified network that everyone can access and watch. Moreover, blockchain is known for the cryptographic security it provides for its databases, and transactions. This makes blockchain a highly credible choice in controlling frauds and encourages wider usage.
Reducing Counterfeiting goods
The centralized database of blockchain helps in tracking of inter-company databases to prohibit counterfeit goods from entering into the system. If any fake or counterfeit item is slipped in, it won't match with the previous records, blockchain maintains a strict check-in and check-out of every record to ensure the integrity of records.
AURA is a blockchain network developed by LMHV in partnership with Microsoft. It allows consumers to trace the history and authenticity of luxury goods.
Users of Cryptocurrency will expand to retail
The usage of cryptocurrency is seeing a gradual surge as we can see more and more retailers are accepting cryptocurrency. The online travel agency Expedia has started accepting bitcoin as a form of payment. The reason cryptocurrency is gaining traction among retailers is because it cuts out the middleman which allows them to receive the payment instantly and with a little to no transaction fees. But many cryptocurrencies are circulating in the market, Bitcoin being the most popular and Ethereum, Monero, Ripple, etc are some of the lesser-known ones. Having the already established blockchain network lets the retailers safely and confidently incorporate the cryptocurrency into their daily business transactions.
Is blockchain going to disrupt the retail industry? If the signs are to be believed it is getting popular exponentially. The major players in the industry are right now investing in blockchain, and most probably will lead the way forward. And looking at what the technology has to offer it does hold the ability to become the norm in the coming years.